Strategic Company Market Profile
FOOD
FOR
T HOUGHT
November 2009
Kraft Foods and Cadbury
in Western Europe's Food & Drink Markets
From Food for Thought's International Food & Drink Database at www.fft.com
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Would an acquisition by Kraft Foods of Cadbury make sense from an end-market point of view ?
To what extent would market dominance in selected product and country markets result ?
Matching known product areas like Sweet and Chocolate Confectionery is one thing, but what about myriad other activities
Will later consolidation of the combined companies provoke further merger & acquisition activity?
Report Description
Drawing on FFT's extensive food & drink markets database, now in its 20th year, this report analyses several major aspects of
the proposed acquisition of Cadbury by Kraft Foods seen from the market end of the spectrum, an innovative approach:
1.
Market Dominance:
Product and country market shares.
2.
Sales Turnover:
Estimated final retail and foodservice values (see # note next page).
3.
Country Presence:
Geographic distribution and size among 16 West European countries.
These 3 strands are then draw together to provide an overall picture of the market strengths and weaknesses of the two
companies combined, as illustrated in the bubble chart below (actual abridged samples taken from report):
Western Europe (16 countries)
Market Dominance
34 More
Product
Markets
Sales Turnover
Kraft Foods
34 More
Product
Markets
Cadbury
Kraft Foods
Cadbury
Chocolate Countlines
Other Chocolate Confectionery
Other Chocolate Confectionery
Chewing Gum
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
West European market share
Source: Food for Thought
0
30.0%
1 000
Country Presence
2 000
3 000
4 000
5 000
West European Sales Turnover (Euro m.)
Source: Food for Thought
Company Market Strengths and Weaknesses
% share of product market
bubble size = sales turnover
KRAFT FOODS + CADBURY
Strengths and Weaknesses in West European Market
" Top 12 out of 44 product markets = 90%+ of sales turnover "
30.0%
Kraft Foods
Market Strength
16 Countries
in Western
Europe
altogether
Company Market Share by
Product in Western Europe
Cadbury
7: 1.02
25.0%
2: 2.57
1: 4.7
8: 0.89
20.0%
No. of Countries in
which Present #
3: 2.53
10: 0.61
4: 1.63
14
16
15.0%
0
2
4
6
8
10
12
18
20
5: 1.52
10.0%
6: 1.12
Ranked by
contribution to Co.
WE Sales Turnover
5.0%
11: 0.57
12: 0.26
Sweden
9: 0.64
Belgium/Luxemburg
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
0.0%
Bubbles: Sized to sales turnover. Top-12 Ranking and
Sales Turnover in Euro billions indicated (see table below).
Market Presence
# 16 countries covered in Western Europe.
Source: Food for Thought
Country Market Shares
Source: Food for Thought
Number of countries in which present
© Food for Thought (FFT) S.A., P.O. Box 1554, CH-1211 Geneva 1, Switzerland
Tel: +41-22-731 30 92, Fax: +41-22-738 49 50, Website: www.fft.com, Email: sales-service@fft.com
–2–
The four graphs above illustrate the analysis for Western Europe treated globally. The full report itself breaks down the market and
company data in exhaustive product and country detail.
Brief Summary of the potential impact on the West European Food & Drink Market
The West European food & drink market is estimated at Euros 1126 billion in 2008 *. Kraft Foods is estimated to have
a 1.298% and Cadbury a 0.472% of this total market, or respectively final market sales turnovers of Euros 14.6 billion
and Euros 5.3 billion respectively, for a combined total of nearly Euros 20 billion. Within their own product markets only,
the overall market shares come to 6.28% and 3.44% respectively, for a combined weighted average of just over 7%.
The two companies are analysed both as a combined entity and individually against the backdrop of the entire West European
food & drink market. Detailed company and market data by product and country are provided against the following framework:
Kraft Foods
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Cadbury
Combined
Number of product markets in which present:
41
17
44
Number of countries in which present:
16
16
16
Number of product & country value market shares quoted:
225
55
252
Company sales turnover (Euro billions at market prices): #
14.6
5.3
19.9
Overall share of the total West European food & drink market:
1.30%
0.47%
1.77%
Overall share regarding the 44 products in which they are present:
6.28%
3.44%
7.05%
The report demonstrates that just 12 product markets contribute 90% of total sales turnover in Western Europe, and
cover over half of the 252 country and product market shares identified. Thus while the combined companies perform well
in key markets, they are also present in a great many scattered and less rewarding product markets. This situation
naturally invites consolidation, and thus merger & acquisition opportunities.
Report Content
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90 pages (of which Main Report 50 pages and Detailed Data Table in Annex 29 pages).
The two companies, Kraft Foods and Cadbury, are analysed both individually and as a combined entity.
The report is a hard data compilation presented essentially in the form of commented charts and tables
(see Table of Contents for detail).
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All supporting data is supplied, including a 29-page table in the Annex presenting, for Kraft Foods and Cadbury
individually and combined:
By product and country:
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Key company subsidiaries
Company market shares
Company sales turnover
Country and product market values (Euro millions)
West European product market values (Euro millions)
Company country and product market share ranking
Major company brands
Notes:
* Key Market Definition: Market data refer to all products sold for final human consumption in retail, foodservice and artisanal
markets (own-produced for own sale), thus excluding industrial and intermediate consumption and auto-consumption. Value
markets are in retail prices (including VAT, excise and sales taxes and other charges) and foodservice market buy-in prices. Full
product definitions in six languages are available online at www.fft.com. For the purposes of this report, company sales turnover
by product and country are broadly estimated on the basis of "company market share * total market value".
# Company sales turnovers: These have been estimated on the basis of company country & product "market shares times
total market size by value", at retail and foodservice market buy-in prices *. While all due care has been applied, both these
data are themselves produced on a best efforts basis. Thus sales turnover by product and country given in this report are clearly
rough estimates. For the purpose of assessing the product and country market performance of these companies
on a comparative basis, this approach is here considered perfectly satisfactory.
© Food for Thought (FFT) S.A., P.O. Box 1554, CH-1211 Geneva 1, Switzerland
Tel: +41-22-731 30 92, Fax: +41-22-738 49 50, Website: www.fft.com, Email: sales-service@fft.com