Food and consumer goods research firm IGD forecasts that China will retain its position as the largest grocery market over the next five years.
The growth is predicted to come from the small to medium-sized cities, labelled tier three and four, which are growing in population.
Joanne Denney-Finch, IGD chief executive, said: “China will maintain its position as the world’s biggest grocery market for the foreseeable future. Although the Chinese growth rate is slowing, it’s still very impressive, particularly in ‘tier three and four cities’.
Western brands
“These are regional, medium-income cities, undergoing rapid development. There are many more opportunities for retailers and Western brands. For example, online grocery will enjoy explosive growth in China, though from a modest base, tripling in size between now and 2020. This will be powered by more Chinese having access to the internet through smartphones and other devices.”
Despite this predicted growth, pork production in China is predicted to decrease this year, presenting an opportunity for pork producers to take advantage of a growing market and a shrinking supply. According to Rabobank’s recent ‘China’s Incredible Shrinking Hog Herd’ report, Chinese pork production is forecast to drop by 3.7 million tonnes (6.5%), to 53m tonnes in 2015.
IGD also predicts that the grocery sector in India will grow by 79% over the next five years, growing from US$503bn to US$901bn by 2020.
2020 Vision
Mexico: Market expected to grow by 39%
Indonesia: Expected to grow by 63%
Nigeria: 85% growth predicted over the next five years
Turkey: 61% market growth estimated
MINT opportunities
Denney-Finch believes MINT countries (Mexico, Indonesia, Nigeria and Turkey) could become key export markets if they improve their infrastructure. According to the IGD research, Nigeria’s grocery market will increase in value by 85% to reach US$300bn by 2020.
“Although growth prospects appear limited in Europe at the moment, this is a time of tremendous opportunity for grocery companies further afield. The vast majority of global grocery growth will come from Asia, Africa and the Middle East, supported by increasing affluence, urbanisation and rising populations. With many European products and brands highly regarded in these regions, this will be a boom time for companies with export skills.
“Nigeria is the fastest-growing of all large-scale grocery markets with a rapidly expanding economy, population and middle class. It does, however, face significant challenges such as the need to improve security and limited infrastructure in some regions.
“The other ‘MINT’ markets will also expand rapidly. Indonesia, in particular, benefits from a fast-growing and youthful population and there is a lot of focus on convenience stores to make the most of how this group shops.”
Top 15 global grocery markets
(Source: IGD)