A Natural Growth Industry

Food & Beverage

January 2011

Table of Contents

Food & Beverage in Greece: A growth industry sector

Advantages and key business drivers

Areas of potential growth and business expansion

Success stories in trade and investment

Food & Beverage in Greece: A growth industry sector

F&B is the most dynamic and high-growth sector of Greek manufacturing…

Number of companies in the Greek F&B sector

Source: Foundation for Economic and Industrial Research (IOBE) - F&B Sector Annual Report 2009, Eurostat

13,500

14,000

14,500

15,000

15,500

16,000

16,500

14,490

15,195

15,715

16.255

20042005

20062007

Key

Fig

ure

s

F&B enterprises represent 17.1% of total manufacturing enterprises

1,270 are industrial companies with prominent domestic and international

presence. The rest are SMEs

Sales account for 12 billion Euro covering 21% of total manufacturing

Employs 120,000 people covering 22% of total employment in manufacturing

Pastries, snacks, confectionery and pasta represent 2/3 of the enterprises, 1/3 of the

total turnover and absorb half of total employment

Almost 16,300 enterprises at industrial and artisanship level

…contributing decisively and steadily to the country’s exports and EU diet

Source: Foundation for Economic and Industrial Research (IOBE) - F&B Sector Annual Report 2009, Eurostat

Share of the F&B industry exports in Greece’s total foreign trade

74%

26%

EU-27

Rest of the world

EU is the major export destination for the Greek F&B products (2008)

12.00%

12.20%

12.40%

12.60%

12.80%

13.00%

2005 2006 2007 2008

12.30%12.20%

12.30%

12.10%

Outward looking by nature…High rating of Greek F&B investments abroad

and prominent presence in international markets

Source: Invest in Greece, Policy & Planning Unit: Latest version survey entitled “Greek Investors in Foreign Markets 2001-2007”

28%

28%8%

8%

5%

4%

4%

3%

2% 10%

Food & Beverage

Financial Services

Information & Communications Technology

Retail & Wholesale Trade

Construction & Real Estate

Pacaging Materials & Machinery

Mining

Building Materials

Tourism, Travel, Leisure & Entertainment

Other

Greek investments in developed regions by sector (2007)

55%

19%

9%

4%

2%2%

2%

2%1%

4%

Financial Services

Information & Communications Technology

Food & Beverage

Construction & Real Estate

Building Materials

Energy & Environment

Retail & Wholesale Trade

Basic Metals

Machinery & Equipment

Other

Greek investments in developing regions by sector (2007)

Strong receiver of FDI…Second strongest sector in Greek manufacturing

after chemicals

Source: Bank of Greece, 2010

Foreign Direct Investments in the Greek manufacturing sector (2003-2009) – Gross figures

17%

8%

29%15%

16%

2%13%

Food & beverage

Refineries

Chemicals

Metals

Machinery

Transport means

Rest

…resistant and adaptive to the current financial crisis

• 5.5% increase in workforce in the first half of 2009 contributing to the alleviation of the crisis’s consequences

Employment

• Despite the decrease in 2009 production (2.6% in food and 6.7% in drinks), F&B experienced milder losses than those of the total manufacturing sector (10.6%)

Industry Production

Source: Foundation for Economic and Industrial Research (IOBE) - F&B Sector Annual Report 2009

Bakery, snacks, confectionery and pasta is the largest subsector in terms of turnover

and employment

7.00%

1.60%

10.40%

8.60%

16.80%

4.30%2.70%

32.10%

16.50%

Meat Production & Processing

Fishery products

Vegetable & Fruit Processing

Vegetable & Animal Oils & Fats

Dairy Products

Flour Products

Prepared Animal Feed

Bakery, Snack, Confectionery & Pasta ProductsDrinks

Turnover by subsector (% classification)

6.90%

1.70%

10.00%

6.40%

12.10%

3.00%

1.60%

46.30%

11.80%

Meat Production & Processing

Fishery products

Vegetable & Fruit Processing

Vegetable & Animal Oils & Fats

Dairy Products

Flour Products

Prepared Animal Feed

Bakery, Snack, Confectionery & Pasta ProductsDrinks

Employment by subsector (% classification)

Source: Foundation for Economic and Industrial Research (IOBE) - F&B Sector Annual Report 2009, Eurostat

Advantages and key business drivers

A privileged sector environment…

• Low operating costs

• Abundant raw materials of high quality

• Access to the emerging growth markets of Southeast Europe and Eastern Mediterranean through the established productionand sales network of Greek enterprises

• Shift towards a low calorie, cholesterol free and vitamin-rich dietthroughout the western world favoring the Greek Mediterraneandiet

• Highly experienced and well-educated labor force

…offering plenty of benefits to international entrepreneurs…

• A well-developed domestic retail / supermarket network thatguarantees timely distribution and has already attracted keyforeign players (Carrefour, Delhaize, Lidl)

• Strong focus on R&D. Innovative manufacturers and highly specialized research centers develop new up-market and highquality products.

Leaders in R&D, innovation and food technology are:

The Food Industrial Research & Technological DevelopmentCompany (ETAT)The Institute of AgrobiotechnologyThe Institute of AquacultureThe University of Thessaly

…and a promising future as will continue to bethe steam-engine of Greek manufacturing

• Further development of small local production and reinforcementof competitiveness

• Further reinforcement of R&D and innovation at industry level tocover new consumer needs and preferences (i.e. demand forconvenience and specialized products based on safe, healthy andhigh quality ingredients)

• Increasing demand and new consumer habits lead the way for branded products

• Strategic alliances and further human resource exploitation arekey industry priorities in the immediate future

Source: Foundation for Economic and Industrial Research (IOBE) - F&B Sector Annual Report 2009, The Greek Economy in 2008 – Taseis Journal

The Greek F&B industry is supported by a potent agricultural sector

• Agriculture accounts for 5-6% of GDP in Greece as compared to1.5% of EU-15. Although the share of agriculture in total economydiminished in the previous decade, continues to be at muchhigher levels in comparison with other EU members

• Greek agriculture continues to provide jobs to a considerableamount of people in Greece. Its share in total employment (17%)is much higher than that of EU-15 (4.3%)

• 35 to 40% of the total agricultural land is cultivated with arablecrops, 20% with olive trees, 11% with cotton, 8% with fruits andvegetables, 3.5% with vines and 1.5% with tobacco

Source: “A Brief Overview of Agriculture in Greece”, Pavlos D. Pezaros, Director of Agricultural Policy, Ministry of Rural Development & Food

The Greek F&B industry is supported by a potent agricultural sector (2)…

• Fertile semi-mountainous and mountainous areas: 50-55% of thecereals, 60-65% of olive trees, 70% of sheep and goat herds and40-50% of bovine animals are cultivated or raised in these areas

• A big size of holdings: Statistically, about 800,000 of family-typeholdings appear to still be active in Greece

Source: “A Brief Overview of Agriculture in Greece”, Pavlos D. Pezaros, Director of Agricultural Policy, Ministry of Rural Development & Food

… characterized by a developing and very promising organic segment

• The sector of organic products mainlyconsists of small, family-owned businesses

• Producers and processors of organicproducts in Greece account approximatelyfor 7,810

• Latest available figures suggest that cerealscome first (38.3%) in organic cultivationfollowed by olive trees (38.2%) and vines (3.8%)

Source: ICAP Organic Farming & Products sector study (April 2009), ΔΗΩ (Organization for the Inspection and Certification of Organic Products)

35%

65%

Production of organic foodstuffs

Imports of organic foodstuffs

Reliance on organic food imports offers space for business expansion to cultivators, producers and processors

Fish farming holds a discrete position in Greece’s F&B industry

• Greece is the largest producer of sea bream and sea bass in the Mediterranean(370,000,000 fry & 150,000 tons of fish) and akey supplier of European markets (85% of theproduced fish is exported

• Greek farmed sea bream & sea bass constituteone of the four most important agricultureproducts of Greece (together with oliveoil, tobacco and cotton), occupying thesecond place in the Greek agricultural exports

• Approximately 100 companies, are engaged inthe Mediterranean Aquaculture in Greece, thevast majority of which are small family businesses

Source: Sector data and statistics presented by Dias, Nireus and Selonda Aquaculture Groups

Fish farming holds a discrete position in Greece’s F&B industry (2)

48%

23.80%

12.40%

6.30%

3.20% 1.80% 4.40%Greece

Turkey

Spain

Italy

France

Egypt, Morocco, Tunis

Other

Key European Producers (2009)

193175 167

12598

70

229

260

302315 318

330

0

50

100

150

200

250

300

350

1997 2000 2003 2006 2008 2010

Companies

Licenses

Consolidation Over Time

• 5 listed groups in the Athens Stock Exchange control over 70% ofdomestic production

• Strong consolidation through mergers and acquisitions into largergroups opting to become more powerful in the market

Source: Sector data and statistics presented by Dias, Nireus and Selonda Aquaculture Groups

*

* Estimate

Areas of potential growth and business expansion

Abundant niche markets…

There is abundant opportunity to create value added in many product categories in the Greek F&B sector, especially as the global interest in healthful foods continues to expand:

Honey and nut based snacks

Macaroni products

Marmalades and pickled goods

Ready made meals and frozen food

Seafood

…offer great potential…

Meat and delicatessen products based on olive oil and otherhealthy Mediterranean ingredients

Boutique and niche market goods including:

sprirulina and saffron, both widely known for their therapeutic attributes

mastiha and other herb products

unique sauces

baby foods

…for investment and business expansion

chocolates and confectionery

cheeses

specialty herb mixes

traditional spoon sweets

Liqueurs and fruit juices

herbal beverage products

organic products

Simple steps to Establish a F&B manufacturing activity in Greece

Decide on geographical area, focusing on target market, availability of raw materials, transportation and infrastructure

Explore space availability within Industrial Areas where set-up is easier and faster

Issue licenses if the investment is to be located outside an Industrial Area

Use our free support services for guidance and assistance, saving valuable time

Success stories in trade and investment

Greece is the base of famous F&B brands

Your Investment Partner in the region

3 Mitropoleos St.105 57 Athens, Greece

t. +30 210 3355700f. +30 210 3242079

e. info@investingreece.gov.gr