Food beverage: a natural growth industry
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A Natural Growth Industry
Food & Beverage
January 2011
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Table of Contents
Food & Beverage in Greece: A growth industry sector
Advantages and key business drivers
Areas of potential growth and business expansion
Success stories in trade and investment
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Food & Beverage in Greece: A growth industry sector
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F&B is the most dynamic and high-growth sector of Greek manufacturing…
Number of companies in the Greek F&B sector
Source: Foundation for Economic and Industrial Research (IOBE) - F&B Sector Annual Report 2009, Eurostat
13,500
14,000
14,500
15,000
15,500
16,000
16,500
14,490
15,195
15,715
16.255
20042005
20062007
Key
Fig
ure
s
F&B enterprises represent 17.1% of total manufacturing enterprises
1,270 are industrial companies with prominent domestic and international
presence. The rest are SMEs
Sales account for 12 billion Euro covering 21% of total manufacturing
Employs 120,000 people covering 22% of total employment in manufacturing
Pastries, snacks, confectionery and pasta represent 2/3 of the enterprises, 1/3 of the
total turnover and absorb half of total employment
Almost 16,300 enterprises at industrial and artisanship level
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…contributing decisively and steadily to the country’s exports and EU diet
Source: Foundation for Economic and Industrial Research (IOBE) - F&B Sector Annual Report 2009, Eurostat
Share of the F&B industry exports in Greece’s total foreign trade
74%
26%
EU-27
Rest of the world
EU is the major export destination for the Greek F&B products (2008)
12.00%
12.20%
12.40%
12.60%
12.80%
13.00%
2005 2006 2007 2008
12.30%12.20%
12.30%
12.10%
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Outward looking by nature…High rating of Greek F&B investments abroad
and prominent presence in international markets
Source: Invest in Greece, Policy & Planning Unit: Latest version survey entitled “Greek Investors in Foreign Markets 2001-2007”
28%
28%8%
8%
5%
4%
4%
3%
2% 10%
Food & Beverage
Financial Services
Information & Communications Technology
Retail & Wholesale Trade
Construction & Real Estate
Pacaging Materials & Machinery
Mining
Building Materials
Tourism, Travel, Leisure & Entertainment
Other
Greek investments in developed regions by sector (2007)
55%
19%
9%
4%
2%2%
2%
2%1%
4%
Financial Services
Information & Communications Technology
Food & Beverage
Construction & Real Estate
Building Materials
Energy & Environment
Retail & Wholesale Trade
Basic Metals
Machinery & Equipment
Other
Greek investments in developing regions by sector (2007)
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Strong receiver of FDI…Second strongest sector in Greek manufacturing
after chemicals
Source: Bank of Greece, 2010
Foreign Direct Investments in the Greek manufacturing sector (2003-2009) – Gross figures
17%
8%
29%15%
16%
2%13%
Food & beverage
Refineries
Chemicals
Metals
Machinery
Transport means
Rest
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…resistant and adaptive to the current financial crisis
• 5.5% increase in workforce in the first half of 2009 contributing to the alleviation of the crisis’s consequences
Employment
• Despite the decrease in 2009 production (2.6% in food and 6.7% in drinks), F&B experienced milder losses than those of the total manufacturing sector (10.6%)
Industry Production
Source: Foundation for Economic and Industrial Research (IOBE) - F&B Sector Annual Report 2009
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Bakery, snacks, confectionery and pasta is the largest subsector in terms of turnover
and employment
7.00%
1.60%
10.40%
8.60%
16.80%
4.30%2.70%
32.10%
16.50%
Meat Production & Processing
Fishery products
Vegetable & Fruit Processing
Vegetable & Animal Oils & Fats
Dairy Products
Flour Products
Prepared Animal Feed
Bakery, Snack, Confectionery & Pasta ProductsDrinks
Turnover by subsector (% classification)
6.90%
1.70%
10.00%
6.40%
12.10%
3.00%
1.60%
46.30%
11.80%
Meat Production & Processing
Fishery products
Vegetable & Fruit Processing
Vegetable & Animal Oils & Fats
Dairy Products
Flour Products
Prepared Animal Feed
Bakery, Snack, Confectionery & Pasta ProductsDrinks
Employment by subsector (% classification)
Source: Foundation for Economic and Industrial Research (IOBE) - F&B Sector Annual Report 2009, Eurostat
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Advantages and key business drivers
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A privileged sector environment…
• Low operating costs
• Abundant raw materials of high quality
• Access to the emerging growth markets of Southeast Europe and Eastern Mediterranean through the established productionand sales network of Greek enterprises
• Shift towards a low calorie, cholesterol free and vitamin-rich dietthroughout the western world favoring the Greek Mediterraneandiet
• Highly experienced and well-educated labor force
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…offering plenty of benefits to international entrepreneurs…
• A well-developed domestic retail / supermarket network thatguarantees timely distribution and has already attracted keyforeign players (Carrefour, Delhaize, Lidl)
• Strong focus on R&D. Innovative manufacturers and highly specialized research centers develop new up-market and highquality products.
Leaders in R&D, innovation and food technology are:
The Food Industrial Research & Technological DevelopmentCompany (ETAT)The Institute of AgrobiotechnologyThe Institute of AquacultureThe University of Thessaly
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…and a promising future as will continue to bethe steam-engine of Greek manufacturing
• Further development of small local production and reinforcementof competitiveness
• Further reinforcement of R&D and innovation at industry level tocover new consumer needs and preferences (i.e. demand forconvenience and specialized products based on safe, healthy andhigh quality ingredients)
• Increasing demand and new consumer habits lead the way for branded products
• Strategic alliances and further human resource exploitation arekey industry priorities in the immediate future
Source: Foundation for Economic and Industrial Research (IOBE) - F&B Sector Annual Report 2009, The Greek Economy in 2008 – Taseis Journal
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The Greek F&B industry is supported by a potent agricultural sector
• Agriculture accounts for 5-6% of GDP in Greece as compared to1.5% of EU-15. Although the share of agriculture in total economydiminished in the previous decade, continues to be at muchhigher levels in comparison with other EU members
• Greek agriculture continues to provide jobs to a considerableamount of people in Greece. Its share in total employment (17%)is much higher than that of EU-15 (4.3%)
• 35 to 40% of the total agricultural land is cultivated with arablecrops, 20% with olive trees, 11% with cotton, 8% with fruits andvegetables, 3.5% with vines and 1.5% with tobacco
Source: “A Brief Overview of Agriculture in Greece”, Pavlos D. Pezaros, Director of Agricultural Policy, Ministry of Rural Development & Food
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The Greek F&B industry is supported by a potent agricultural sector (2)…
• Fertile semi-mountainous and mountainous areas: 50-55% of thecereals, 60-65% of olive trees, 70% of sheep and goat herds and40-50% of bovine animals are cultivated or raised in these areas
• A big size of holdings: Statistically, about 800,000 of family-typeholdings appear to still be active in Greece
Source: “A Brief Overview of Agriculture in Greece”, Pavlos D. Pezaros, Director of Agricultural Policy, Ministry of Rural Development & Food
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… characterized by a developing and very promising organic segment
• The sector of organic products mainlyconsists of small, family-owned businesses
• Producers and processors of organicproducts in Greece account approximatelyfor 7,810
• Latest available figures suggest that cerealscome first (38.3%) in organic cultivationfollowed by olive trees (38.2%) and vines (3.8%)
Source: ICAP Organic Farming & Products sector study (April 2009), ΔΗΩ (Organization for the Inspection and Certification of Organic Products)
35%
65%
Production of organic foodstuffs
Imports of organic foodstuffs
Reliance on organic food imports offers space for business expansion to cultivators, producers and processors
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Fish farming holds a discrete position in Greece’s F&B industry
• Greece is the largest producer of sea bream and sea bass in the Mediterranean(370,000,000 fry & 150,000 tons of fish) and akey supplier of European markets (85% of theproduced fish is exported
• Greek farmed sea bream & sea bass constituteone of the four most important agricultureproducts of Greece (together with oliveoil, tobacco and cotton), occupying thesecond place in the Greek agricultural exports
• Approximately 100 companies, are engaged inthe Mediterranean Aquaculture in Greece, thevast majority of which are small family businesses
Source: Sector data and statistics presented by Dias, Nireus and Selonda Aquaculture Groups
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Fish farming holds a discrete position in Greece’s F&B industry (2)
48%
23.80%
12.40%
6.30%
3.20% 1.80% 4.40%Greece
Turkey
Spain
Italy
France
Egypt, Morocco, Tunis
Other
Key European Producers (2009)
193175 167
12598
70
229
260
302315 318
330
0
50
100
150
200
250
300
350
1997 2000 2003 2006 2008 2010
Companies
Licenses
Consolidation Over Time
• 5 listed groups in the Athens Stock Exchange control over 70% ofdomestic production
• Strong consolidation through mergers and acquisitions into largergroups opting to become more powerful in the market
Source: Sector data and statistics presented by Dias, Nireus and Selonda Aquaculture Groups
*
* Estimate
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Areas of potential growth and business expansion
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Abundant niche markets…
There is abundant opportunity to create value added in many product categories in the Greek F&B sector, especially as the global interest in healthful foods continues to expand:
Honey and nut based snacks
Macaroni products
Marmalades and pickled goods
Ready made meals and frozen food
Seafood
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…offer great potential…
Meat and delicatessen products based on olive oil and otherhealthy Mediterranean ingredients
Boutique and niche market goods including:
sprirulina and saffron, both widely known for their therapeutic attributes
mastiha and other herb products
unique sauces
baby foods
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…for investment and business expansion
chocolates and confectionery
cheeses
specialty herb mixes
traditional spoon sweets
Liqueurs and fruit juices
herbal beverage products
organic products
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Simple steps to Establish a F&B manufacturing activity in Greece
Decide on geographical area, focusing on target market, availability of raw materials, transportation and infrastructure
Explore space availability within Industrial Areas where set-up is easier and faster
Issue licenses if the investment is to be located outside an Industrial Area
Use our free support services for guidance and assistance, saving valuable time
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Success stories in trade and investment
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Greece is the base of famous F&B brands
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