‘Challenging’ Q1 2014 for SL food and beverages sector : Nielsen
View(s):The Sri Lankan food and beverages sector had a “challenging” first quarter of 2014, revealed market research agency Nielsen recently. This is despite this category featuring the highest, consumer spend within the larger Fast Moving Consumer Goods (FMCG) super’ category. According to the Nielsen Q1 2014 Dashboard update, issued at the beginning of June; “Of the 40 or so FMCG categories tracked by Nielsen’s Retail Audit, about two thirds of spend is on Food and Beverages”.
At the same time, it also emerged that general trade (grocery store) FMCG purchase volumes had also “stabilised” following a 17 per cent decline that was initially witnessed in the first quarter of 2013. Nielsen also opined that this initial fall was a result of double digit price increases due to the February 2013 Sri Lankan rupee devaluation and, since then, prices have “aligned” with inflation of about 8 per cent and purchase volumes having stablised over the last four quarters.
Commenting further, the Nielsen update also stated; “On MAT (Moving Annual Total) basis, Personal Care has shown high double digit value growth, on the back of strong demand for cosmetic and personal hygiene products, with Food and Beverages growing at just under the annual inflation rate. However during the first three months of 2014, while Personal and Household Care have shown robust value increases, Food and Beverage had grown at just 1.9 per cent”. The report also estimated Personal Care’s and Household Care’s value contribution to the overall FMCG ‘super’ category as being approximately 25 per cent and 11 per cent, respectively.
Meanwhile, Nielsen also said that Sri Lanka’s agriculture sector had “hardly” contributed to overall GDP growth in 2013, while manufacturing, including apparel, was shown to be on the rise and now equalling the same levels of increases as construction. Transportation in the services sector, which also encompassed shipping and other freight, was also identified as the biggest growth driver.
Elaborating, Nielsen also signalled that agriculture’s contribution to overall GDP growth had fallen to 0.5 per cent in 2013, from 0.6 per cent in 2012, while the industrial sector stagnated at 3.0 per cent, and services grew to 3.7 per cent, compared to 2.7 per cent the year before. Overall GDP growth was also recorded as 7.3 per cent in 2013, up from 6.4 per cent previously. (JH)