Overview of the Middle East Market
Food and Drinks Industry Day
November 27th 2008
CONTENTS
ü Middle East in Figures
ü Market overview of Saudi Arabia
ü Irish food & drink exports to Saudi Arabia
ü Market overview of UAE
ü Bord Bia Middle East Services in 2009
The Middle East
• Population of 305 m (est)
• Comprising 16+ countries
• Saudi Arabia, UAE, Iran & Turkey are the four largest
economies in the ME
• Saudi / UAE / Kuwait key oil exporting countries
• Key issues for the future
– Rapid population growth
– Unemployment is a major issue
– Concerns over security of food supply in the region
Saudi Arabia in Figures
ü 2007 GDP: $546 billion
− One of the largest economies in the Middle East
− 2007 GDP growth: 3.4%
− Expected 2008 growth: 7.2%
− Per capita income of $20,700
− Oil based economy / worlds largest producer & exporter of oil
ü Inflation: 4.1% in 2007 / 4.7% in 2008 est
ü Unemployment: 13%
ü Population: 27 million
– 5m are expatriates
– Population expected to reach 40m by 2020
– Life expectancy: male 74 yrs, female 78 yrs
– Young Population: 43% < 15 yrs old
Saudi Arabia – A major food importer
• Saudi Arabia is a major food importing nation - only 4% of
Saudi’s land is arable
• Food imports were valued at €8bn in 2007
• The rapidly growing food processing sector relies on imported
ingredients
• The majority of consumer ready foods sold at retail level are
imported
• Rapid population growth, increased spending power and rising
living standards will increase demand for imported products
• Growing desire to purchase western goods
• Brand conscious consumers
Retail Overview
•
The sector is highly fragmented, largely dominated by single-outlet operations
•
70% of the grocery sales are accounted for by the modern retail sector
•
Retail is dominated by domestic players - Top ten players are:
– Azizia Panda; Al Othaim Commercial Group; Axiom Telecom; Fawaz Al Hokair
Group; Al Sawani Group; M H Alshaya; and Al Bandar Trading
•
Hypermarket formats are rapidly expanding
•
Retail grocery sales in 2005 were estimated at €25bn
•
International retail is dominated by the French groups, Carrefour and Casino (Geant); they
have long term plans to expand rapidly.
•
Buying and eating habits have changed significantly since the introduction of Westernstyle supermarkets and restaurants in the late 1970s.
Food Service Overview
• Most of the major international players are present
– McDonalds, Pizza Hut, KFC, TGI Friday ‘s
• They compete with the well established domestic players
• They import the bulk of their ingredient components
• The foodservice sector is growing - a major family form of
entertainment outside the home, as there are limited
alternatives.
IRISH EXPORT PERFORMANCE
ü 2007 F&D exports to Saudi Arabia: €167 m (- 2% v 2006 due
to a decrease in food preparation exports)
ü Largest Middle East market for Irish food & drink
ü Key exports are dairy & ingredients and food preparations
ü Infant formula exports valued at 61m
ü Market is now open for Irish beef - all meat imported must be
produced in accordance with Muslim tradition (Halal)
Source: CSO
UAE Market Overview
•
Population is 2.6m – 75% are expatriates
•
It has one of the most diverse populations in the Middle East
•
UAE is heavily dependent on food imports - estimated to account for
over 75 per cent of the food supply
•
The country has become highly prosperous due to FDI
•
Tourism and oil are the major contributors to the economy
•
5th highest GDP rate in the world
UAE in Figures
ü 2007 GDP: $170 bn / $187.7bn in 2008
- One of the most developed economies in the world
- Huge construction boom taking place
ü Inflation: 10% in 2007 / 12% in 2008 est
ü Unemployment: 2.6% est
ü Population: 2.6 million
– 75% are expatriates
– Predicted to increase by 18% in 2010
– Main population centres are Abu Dhabi (the capital) and Dubai
Retail Sector UAE
• Retail market is estimated to be worth €8.5bn - growing at 15%
per annum
• Increasing household consumption, affluent population, and
booming service industry are propelling growth
• Shopping events in Dubai (like DSS and DSF) and Dubai Duty
Free (DDF) are the major contributor in the UAE’s retail industry
• Over 600 supermarkets with the majority of them run by
independents or small co-ops
• Strong growth in shopping malls and hypermarkets
• Main players, Carrefour, Casino, Spinneys, Emke, Al Safeer,
Panda
• Private label growth is increasing
Foodservice in UAE
•
Important market sector given the rate of tourism development
•
Large number of five star hotels and restaurants
•
Most of the major fast food chains are present
•
Dubai airport is now a major airline hub giving rise to demand for food to
service a wide range of international airlines using the airport.
•
Dubai Duty Free (DDF), the regions largest duty free player had sales in
2007 in excess of $800 million (expected to reach $1 billion mark in 2009);
Irish brands accounted for sales of $12.3 million, about 1.5% of total.
•
DDF Irish sales in 2007 were made up of 90% alcoholic beverages
Irish Food & Drink Exports to UAE
•
Exports amounted to €37 million up 15% on 2006 levels
•
Main categories are dairy & ingredients, food preparations & alcoholic
beverages
•
Market Access discussions are taking place to re-open the market for
Irish beef
Bord Bia Services in
Middle East for 2009
ü Work with a service provider – based in Dubai
ü Participation at Gulf Food in February in Dubai
ü Customised individual client services - providing
information and support to Irish companies seeking to
develop the market
ü Market Access negotiations for Irish beef