“We estimate total addressable market in Food Empire's three core markets (Vietnam, India, Russia) was US$8.4 billion [or $10.8 billion] (and up to US$37.4 billion across all of Emerging Asia, Eastern Europe and Russia),” they add. “The company's products remain affordable (based on product/margin curve) as it is focusing on 3-in-1 instant coffee; premiumisation provides further upside.”
Macquarie Research analysts Jayden Vantarakis and Hanel Tan have initiated coverage on Food Empire with an “outperform” call, citing the company’s potential to evolve into an “emerging coffee empire” amid rising consumption across its core markets.
“Rising urbanisation, lifestyle changes and income growth have driven faster coffee consumption growth in Food Empire’s core emerging markets ([around] 3.5% five-year CAGR [compound annual growth rate] to 2023) versus developed markets,” they write in their March 19 report.
