What Is The Opportunity for UK Food &

Drink in Africa ?

London 10th December 2014

1

Why me to talk to you?

• 22 years experience

• 65 countries around the world – wide

range of products and supply chains

• Africa - off to Ethiopia tonight

• In the past – Tanzania, Uganda,

Kenya, Ghana, SA, Zambia, Egypt,

Tunisia, Cameroon, Ivory Coast,

Senegal, Lesotho, Swaziland

• Chair of the Food, Drink &

Agricultural Group of the CIM

• National Council, Institute of

Agricultural Management

2

The value chain consulting arm of

3

African headlines........

Pessimistic Optimistic Realistic – a

point of

opportunity ?

4

Where does Africa fit in ? (source: FDF)

148 +14%

174 +37%

190 -37%

196 -10%

198 +4%

204 -1%

210 +10%

212 -3%

215 +7%

217 +4%

221 +16%

276 +18%

332 +2%

409 -19%

577 +10%

951 -1%

1,071 +1%

1,348 -6%

1,560 +3%

2,489 -2%

Norway Taiwan

Singapore South Africa

Poland Sweden

Australia Canada

China Denmark

United Arab … Hong Kong

Italy Belgium

Spain Germany

Netherlands United States

France Ireland

5

What does the world buy from us ? (source: FDF)

0 500 1,000 1,500 2,000 2,500 3,000

Processed milk

Lamb

Beef

Breakfast cereals

Soft drinks

Cheese

Beer

Salmon

Chocolate

Whisky

£m

6

African GDP,1980 – 2016 (US$ billion)

Source: IMF

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

7

Global dairy demand predictions – OECD

forecast to 2017 (000 tonnes)

2008 2017 % Change

World 36, 710 42,505 15.8

OECD 20, 680 22,470 8.6

EU 27 11,960 12,690 6.1

United States 5,760 6,450 11.9

China 1,945 2,595 33.5

India 4,015 5,365 33.6

Australia 355 395 11.3

Sub Saharan

Africa

570 750 31.8

8

African livestock production index (2004 -2006 =

100)

Source: FAOStat

0

20

40

60

80

100

120

140

19

61

19

63

19

65

19

67

19

69

19

71

19

73

19

75

19

77

19

79

19

81

19

83

19

85

19

87

19

89

19

91

19

93

19

95

19

97

19

99

20

01

20

03

20

05

20

07

20

09

9

Diverse economies

10

Ethiopia

Dem. Rep. Congo

South Africa

Tanzania

KenyaUganda

Ghana

Côte d'Ivoire

Madagascar

Mozambique

Cameroon

AngolaBurkina Faso

Malawi

Niger

Zambia

Senegal

Zimbabwe

Guinea

Rwanda

Benin

0.00

2.00

4.00

6.00

8.00

10.00

12.00

0 10 20 30 40 50 60 70 80 90 100

GD

P g

row

th %

(la

st

3 y

ea

rs)

Population (million)

Nigeria

180

Selected city growth – 2015/2030

12

16

Lagos

4

6

Dar es Salam 11

16

Kinshasa

4 6

Nairobi

6 8

Luanda

5 6

Abidjan

4 5

Kano

3 5

Addis Ababa

Source: AfDB – Tracking Africa’s Progress

11

Rising middle class

4.6m 2000

2.4m 1990

15m 2014

40m 2030f

Middle Class Households (11 countries)

Standard Bank (2014)

14%

86%

African Development

Bank’s (AfDB) 2011

300 m ‘middle class’

Approx 1/3 of pop’n

0.2

0.4

0.9

0.6

4.1

0.4

1.1

2

2

12

0 5 10 15

Mozambique

Kenya

Angola

Ghana

Nigeria

High Middle Class Households (m)

2030

2015

Source: Standard Bank 12

African supermarkets

13

0 50 100

DR Congo

Rawanda

Ghana

Tanzania

Madagascar

Nigeria

Uganda

Mozambique

Angola

Zambia

Kenya

Zimbabwe

Botswana

Namibia

No of Stores

Shoprite

Choppies

Pick n Pay

Nakumatt

Mass Mart

Uchumi

Spar

Big in Africa

• Diageo 14% of net sales

• Olam 17% of group revenue

• SAB Miller 13% of group EBITDA

• SPX 5% of group revenue

• Nestle 6% of global sales (includes MENA)

• Unilever 10% of global sales

14

On the ground - specific challenges vary by

country, but common themes exist

• Size

• Disaggregation

• Undiscerning customers

• Weak standards

• Poor enforcement of standards

• Weak/inefficient market signals

• Low customer loyalty

• NGO’s pervasive

15

Global drying

16

Political stability

17

Strategy

• Local partners

invariably essential

• Tailor products to the market – pack size/specifications

• Work with NGO’s

• Modify plans to meet the market

• Be prepared for the long run

18

Summary

• Big market – UK footprint is small

• Africa’s people and resources make it unavoidable

• African growth and prosperity – not assured

• Significant challenges at all levels

• Pioneers are already establishing brands and market share

• Success requires commitment, flexibility, long-term view

19

20

© Promar International

Region 1 - Americas Region 2 - Afro-Europe Region 3 - Asia

Logical trading zones ?

21 21

More information

Please contact

John Giles

Divisional Director

Promar International

john.giles@genusplc.com

+44 7768 553298

Skype: j.giles.promar