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The Restaurant Revolution in Emerging Markets

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The Restaurant Revolution in Emerging Markets

Out-of-home dining represents a key theme in emerging markets (EM) that captures opportunities driven by a growing middle class, greater consumer brand and health awareness, and increasing technology adoption. We see EM countries benefitting from favorable demographics and significant catch-up opportunities, which should translate into industrialization, urbanization, job creation, wage growth, disposable income growth, and ultimately, consumption. We believe rising consumption will be an important driver of sustainable high growth within the EM asset class. Furthermore, the combination of a higher level of multi-national interconnectivity, greater disposable income levels, stronger employment (leading to less free time), and customers being more brand and health conscious should translate into a significant opportunity for the food industry.

Investment Considerations — There can be no guarantee that any strategy (risk management or otherwise) will be successful. All investing involves risk, including the potential of loss of principal.

Emerging Markets Risk — The risks of foreign investments are typically greater in less developed countries, which are sometimes referred to as emerging markets. For example, political, legal and economic structures in these country may be changing rapidly, which can cause instability and greater risk of loss. These countries are also more likely to experience higher levels of inflation, deflation or currency devaluation, which could hurt their economies and securities markets. For these and other reasons, investments in emerging markets are often considered speculative. Similarly, investors are also subject to foreign securities risks including, but not limited to, the fact that foreign investments may be subject to different and in some circumstances less stringent regulatory and disclosure standards than U.S. investments.

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