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Within the Caribbean there are several markets, including the Dominican Republic and Trinidad and Tobago, which have bounced back swiftly from the global economic downturn. In the Dominican Republic, the economy is being boosted by a number of major mining projects that are set to boost exports and should eventually have a significantly wider impact on affluence throughout the country. The strength of the consumer in the Dominican Republic, linked to increasing personal wealth across the country, is likely to attract considerable investment into retail-focused sectors, including food and drink and financial services. Another market with a favourable outlook in the region is Trinidad and Tobago, which has also managed to move beyond tourism thanks to its energy reserves. High international energy prices, as well as strong regional and US demand for the countrys main energy exports, liquefied natural gas and oil are expected to keep a floor under growth and drive up local income and consumption.

Headline Industry Data

2011 food consumption per capita/forecast 2012 growth/forecast compound annual growth rate (CAGR) to 2016 (all in US dollar terms):

- Bahamas: US$1,831/+2.3%/2.4%
- Barbados: US$1,174/+2.8%/+3.0%
- Dominican Republic: US$249/+14.9%/+8.2%
- Jamaica: US$292/+3.7%/+6.3%
- Puerto Rico: US$954/+3.0%/+5.6%
- Trinidad and Tobago: US$1,111/4.3%/+5.0%

Key Company Trends

Heineken Goes After Frontier Markets With Investment In Haiti

- In December 2011, Netherlands-based brewer Heineken again demonstrated its desire for emerging market expansion by boosting its stake in Haitian brewer Brasserie Nationale DHaiti (Brana) from 22.5% to 95%. Brana produces the beer brands Prestige and Malta H and also distributes Guinness under license and is a bottler for soft drinks from the PepsiCo stable. As well as highlighting Heinekens emerging market ambitions the move also fits with our core view that major multinationals will increasingly look for frontier market investments as the opportunities within traditional emerging markets become scarcer as competition increases.

McDonalds Enters Trinidad & Tobago

- In October 2011, McDonalds re-entered Trinidad & Tobago after having left in 2003 due to a drop in sales. The new restaurant opened in a shopping centre named The Falls at West Mall and is operated by Arcos Dorados, a key franchiser across Latin America. The move can be seen as a vote of confidence in the countrys consumer sector which fits with our analysis, with the country seeing an economic growth spurt thanks to the development of its energy reserves.

Key Risks To Outlook

Different Prospects for Individual Caribbean Markets

- Given that the Caribbean is not a homogenous food and drinks markets, risks are on both upside and downside in relation to individual countries surveyed. For example, given that tourism continues to account for a significant proportion of economic activity in Jamaica, improved international perceptions of the island are likely to bode well for real GDP growth and thus also for consumer outlook. Furthermore, on the domestic front, this is likely to encourage greater investment into both hotel and transport infrastructure from the private sector. On the other hand, in Puerto Rico, one of the largest regional food and drinks markets, while huge structural reforms have dramatically improved the islands fiscal outlook, growth is set to remain weak, especially as the authorities aim to rein in public sector spending.

Click for Report details:Caribbean Food and Drink Report Q2 2012