Market Overview
Sweden
Food & Drinks Industry Day
Thursday 27th November 2008
Market Overview
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Population 9.1 million and increasing [immigration]
Outside Eurozone - exchange rate €1 = 9.2 SEK
Largest economy in the Nordic region
GDP €300 billion = €33,000 per capita
Unemployment rate of 7%
Inflation overall is 3% but zero for Food & Drink
Small average household size of 1.9 v EU 2.5 v Irl 3.
Sweden
Low Population Density
20 people /sq km
Ireland = 53 / sq km
Denmark 124 / sq km
Food & Drink Market
• Food & Drink grocery market - €24.2 billion in 2007
• % private consumer spending on Food & Drink is just 13.3%
• Main trading partners
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Germany
UK
Denmark
Finland
Norway
France
• High taxation & social welfare regime
• VAT rates
– Services 25%
– Food
12%
– Alcohol 25%
Market Dynamics
• Swedish consumers display a high loyalty to domestic food
– influx of ‘cheap’ food imports after EU Entry.
• Self Sufficiency in beef is declining - now just 60%
• Imported meat has had a ‘cheap’ image but this may be
changing of late:
– There seems to be an increasing consumer acceptance for
imports
• Authorities place stringent requirements on overseas suppliers
vis-à-vis hygiene and food security – salmonella testing.
• High consumer awareness of environmental issues, organic
food production and animal welfare
• Consumers are very price-sensitive regarding food purchases
Irish F&D Exports to Sweden - €m
Year 2006
Jan – Aug
2007
Change JanAug 07/06
Beef
80.0
49.6
-0.8%
Lamb
7.1
4.0
-28.5%
Pigmeat
2.7
1.4
+28.5%
Other Food &
Drinks
27.6
17.4
-1.1%
Total
117.4
72.4
-3.8%
Source: CSO Stats
Meat Imports
• Increasing due to the decline in domestic beef
production and increased consumption.
• Beef imports are circa 94,000 t cwe
• Lamb imports 7,000 t cwe and increasing also
• Major import suppliers of beef are :
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Ireland
Germany
Denmark
Holland
Brazil, (Arg. Uruguay)
• Lamb: Major suppliers are NZ & IRL
-Poland
-Belgium
-Finland
The Swedish Retail Market
• Highly concentrated - top 3 retailers have 85-90%
share
• Many franchised stores within these retail groups
– independent purchasing alongside central purchasing
• Big country - excellent logistics & dedicated
CPU’s
• Hypermarkets growing faster than supermarkets
• Food prices higher than in other EU markets
– Some say it is due to the high level of concentration !
– High cost economy - labour costs, Quality controls, VAT, etc.
ICA
• Trend setter & market leader with 45-49% of retail market
– ICA Maxi
– ICA Supermarket, ICA Kvantum
– Netto, Nara, Etos
• Hakon Invest AB (40%) + Royal Ahold (60%)
• All 1,500 stores have independent purchasing power
Axfood
• Axfood - part owned by Axel Johnson AB (45% of shares)
– retail market share of 18-20%.
– Willy’s & Willy’s Hemma
– Hemkop
– Tempo, Narliys
• Grocery supplies – logistics routed through DAGAB
Co-op
• Second largest retailer with 21-23% market share
– Co-op - Forum, Konsum, Extra and Nara stores
Other retailers
• Bergendahls – upmarket chain with 3-4% market
share
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Strong pro-Swedish policy for food purchasing
Hypermarkets, City Gros (15)
Supermarkets, AG (16)
Convenience, Mat Oppet
Discount, Ekohallen
• Lidl (80)
• Reitan
– Convenience stores, 7 Eleven, Pressbyran (330)
Foodservice & Manufacturing
• Foodservice is a growing sector in Sweden
• Leading players provide a full assortment / delivery service
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Servera
Menigo
Martin Olsson
Svensk Snabbmat
Axfood Snabbgro
• Manufacturers – Esca, SCAN, Dafgard, Procordia, Findus
– purchase manufacturing beef for processing
– directly or via specialist importers
– Northtrade & Annerstedt
Alcoholic Beverages
Systembolaget
• Systembolaget is a State-owned company with the exclusive right to
retail wine, spirits and beer (>3.5%).
• It has 411 stores, 540 agents and 330 suppliers
• Total Sales in 2007 were €2.6 billion
• Sales Volume: 160 million litres of wine, 207 million litres of beer and
19 million litres of spirits
• Approved suppliers can be viewed on
http://www.spritochvinleverantorerna.se
Reasons for Targeting the
Swedish Market
• Sweden is the largest of the Nordic markets and has one of the
highest per capita income levels in the world
• Since EU entry farm production has declined and there is a
growing structural deficit in meat, food ingredients and other
foods.
• Swedes have a favourable image of Irish food and drink
• There is a concentrated retail sector with well developed
logistics – this makes it very accessible for Irish exporters
• It has strategic links into the other Scandinavian markets
Barriers & Challenges
• Nationalism and domestic preference – Swedes feel that their
own food is nearly always better than imported food.
• Salmonella and other veterinary regulations tend to be used to
the disadvantage of food imports.
• The Swedish Kroner is a small vulnerable currency that is now
suffering from the economic turmoil across the world.
• Regulation – for example, the off-trade sale of alcohol is
regulated for alcohol over 3.5% proof.
• Transport Costs and internal distribution are expensive
• It is difficult for foreign suppliers to set up a base there
Bord Bia Services
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Retail Promotion of Quality Assured products
Market Information & Trade Contacts
Research tailored to company requirements
Mentoring Service to enter and grow the market
Contact Bord Bia Head Office:
– frank.murray@bordbia.ie
– Mobile + 353 87 7680567