Emerging markets are playing an increasing important role in the growth of Irish food and drink exports. During 2011 trade to China increased by 47%, South Africa by 43%, Nigeria by 38% and Russia by 30%. Key drivers of exports include increases in consumer purchasing power and urbanisation.
Emerging markets are playing an increasing important role in the growth of Irish food and drink exports. During 2011 trade to China increased by 47%, South Africa by 43%, Nigeria by 38% and Russia by 30%. Key drivers of exports include increases in consumer purchasing power and urbanisation. These trends stimulate investment from retailers as they seek to secure market share and first mover advantage in emerging markets. Key areas of investment for retailers include new store openings and storage and logistic solutions.
African markets in particular are attracting increased attention from leading international and regional retailers. KFC’s success in China and focus on Africa is an interesting example. For instance, Yum! Brands business development plans in Africa set out the objective of securing “major growth” in the continent from their base of over 650 stores in South Africa. In 2011 new markets for Yum! included Zambia, Ghana and Kenya with plans to roll out to 7 new markets this year. Yum! aim to have a presence in 20 African markets by the end of 2012. Yum! Brands view emerging markets as key to their future growth, but they are not alone.
Regional players such as Shoprite are also looking to expand from South Africa into other African markets. Shoprite recently opened their 6th outlet in Nigeria, and Africa’s largest retailer has a footprint in 17 African markets, with Zambia and Namibia currently the largest markets outside of South Africa. Shoprite have made significant investments in central distribution and new DCs are planned for 2013 in Cape Town, Durban and Port Elizabeth. The company is progressing plans to improve supply lines into other African markets to support “a faster rate of growth”.
A faster rate of growth is something many analysts believe Africa is delivering. Multinational food companies and retailers are moving swiftly to ensure they secure the new opportunities which emerging markets offer. This momentum will ensure emerging markets continue to play an important role in the growth of Irish food and drink exports.
Source: Bord Bia – New Opportunities in Emerging Markets – Bord Bia
