GCC markets-Middle East Growing the success of Irish food & horticulture
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GCC markets-Middle East Growing the success of Irish food & horticulture AIDAN COTTER Growing the success CHIEF EXECUTIVE BORD BIA of Irish28food & horticulture JANUARY 2009 The Gulf Co Operation Council Common religion, language and culture create general traits and features for the region, yet each country is unique in its own way. The macro economics and level of development of the group varies tremendously Growing the success of Irish food & horticulture GCC Food Imports 80-90% of food in the GCC is imported Food imports US$53.1bn by 2020, double the value in 2010 (US$25.8bn) Saudi Arabia (60% by value), UAE 14% and Kuwait 9% The GCC countries are attempting to put together uniform laws relating to labelling, shelf life and food safety for the region. Growing the success of Irish food & horticulture Exports to Middle East 2013 1% €320m 4% 20% Beef Beverages Dairy Edible Hort Pigmeat Poultry Prepared Foods Seafoods Sheepmeat 1% 74% Source: CSO Growing the success of Irish food & horticulture GCC Food Imports 2020, by Value 3% 14% Value: US$53.1BN 9% 8% 6% Bahrain Kuwait Oman Qatar Saudi Arabai United Arab Emirates 60% Source EUI Growing the success of Irish food & horticulture GCC Members Estimate GDP % Change 14 12 10 Bahrain Kuwait Oman Qatar Saudi Arabia United Arab Emirates 8 6 4 2 Source IMF.org 0 2011 2012 2013 2014 2015 2016 Growing the success of Irish food & horticulture 2017 2018 GCC Member Population % Increase, 2000-2010 250 Source UN 200 150 100 50 0 Bahrain Kuwait Oman Growing the success of Irish food & horticulture Qatar Saudi Arabia United Arab Emirates GCC Age Profile 2010 Source: UN 2% 0% 18% 26% 0-4yrs 15-39yrs 40-64yrs 65-79yrs 80+yrs 54% Growing the success of Irish food & horticulture Urbanisation in the GCC The urban dominance will have increased somewhat by 2020 according to the UN: Urban Population 2020, % Bahrain 89.4 Kuwait 98.4 Oman 75.7 Qatar 99.5 Saudi Arabia 84.1 UAE 86.7 Growing the success of Irish food & horticulture Food Security Economic Growth Changing Dietary Habits Population Growth Increased Demand for Food Food security is a Strategic Concern Growing the success of Irish food & horticulture Environment Unsuitable for Food Production Halal Certification Islamic Foundation of Ireland (IFI) is the only Halal accreditation centre in Ireland recognised by the government municipalities in the UAE. Steps of Halal Certification: Registration of product(s) to be certified. Pre-audit assessment. On-site audit. Post-audit evaluation. Halal certificate issuance. Development of new product/production facility. Halal certificate renewal. • • • • • • • Growing the success of Irish food & horticulture Modern Retail Trade Within modern trade, 3 major retailers operate across the whole region: – LULUs, Carrefour & Spinneys In UAE, the top 4 retailers= 37% In Saudi, the top 4 retailers= 24% 91% of all modern trade exists in the UAE (53%) & Saudi (38%) Growing the success of Irish food & horticulture The Kingdom of Saudi Arabia Growing the success of Irish food & horticulture KSA Economic Overview Oil-based economy 80% of budget revenues, 45% of GDP, and 90% of export earnings GDP $921.7 billion GDP +6.8% Inflation 4% Source CIA WorldFactbook, 2013 Growing the success of Irish food & horticulture Economic Indicators 2013 (EUR) Inhabitants GDP GDP per capita GDP % nominal growth Consumer Spending Consumer spending per capita Growing the success of Irish food & horticulture 29,632,000 541,268,380,128 18,266 -2.25 154,632,878,527 5,218 Macroeconomics Growing the success of Irish food & horticulture Macroeconomics Growing the success of Irish food & horticulture KSA Population Source: CIA Factbook 2013 Growing the success of Irish food & horticulture Retail Overview Saudi Arabia is the second largest retail market Retail sales of over €72billion Competitive market Modern Trade 46% Access to the traditional trade is important for women in Saudi as they cannot drive to the larger, out of town stores Growing the success of Irish food & horticulture Retail Landscape Savola Group. Operate across M. East. Largest retailer in Saudi w/nationwide presence Targeted at traditional, middle to low income Saudi’s. 80% Othaim’s shoppers = nationals Growing the success of Irish food & horticulture Target to be #1 Family Retailer Expanding Nationwide. Target upper income shoppers. Grocery Retailers Retailer Grocery sales 2012 (US$ mn) Grocery Sales 2012 (€) (Exchange rate US$1=€0.738) % Change in IGD grocery grocery sales 11- retail market 12* share 2012 Number of stores 2012 Al Azizia Panda 2,537.4 1,873.8 11.0% 6.5% 145 Al Othaim 1,109.4 819.3 28.0% 2.8% 107 937.2 692.5 6.0% 2.4% 30 Farm 327 Unknown Unknown 0.8% 43 Al Sadhan 481.9 356.1 10.6% 1.2% 8 435.9 322.1 2.9% 1.1% 13 Saudi Marketing 374.7 276.9 14.6% 1.0% 55 Al Raya Supermarket 271.6 200.7 27.4% 0.7% 29 Al Tamimi Group 242.1 178.9 4.4% 0.6% 14 Bindawood – Danube Majid Al Futtaim (Carrefour) Note: excludes Cash & Carry and Members Club operations Growing the success of Irish food & horticulture Source: IGB Retail Analysis Saudi Arabia Hypermarkets and Superstore Leaders Growing the success of Irish food & horticulture Panda #Hyper #Super #Riyadh #Dammam #Jeddah 44 107 58 11 19 2011 €2,690 M 2012 € 3,263 2013 € 3,615 Operational Indicators Net sales Euro Aggressively expanding its geographic coverage of KSA cities each year. Presence in 33 cities in KSA. 6 new outlets-2013 Passport Grocery Retailers in Saudi Arabia Euromonitor International March 2014 Growing the success of Irish food & horticulture Al Othaim Branch Corner Ware house Whole sale Hyper #Riyadh #Dammam #Jeddah 88 9 5 0 24 3 58 4 Operational Indicators Net sales (SR million) 2011 2012 2013 € 1,120 € 1,134 € 1,131 Nationwide coverage, Strongest presence is in Riyadh in the central region own strong distribution division named Universal Marketing. Passport Grocery Retailers in Saudi Arabia Euromonitor International March 2014 Growing the success of Irish food & horticulture Bin Dawood/Danube Brand Hyper Super #Riyadh #Dammam #Jeddah Bin Dawood 5 13 0 0 7 •Danube L 0 11 2 0 8 2011 2012 2013 € 906 € 848 € 885 Operational Indicators Net sales (SR million) Stagnanat-slow expansion plans and fierce competition. No new openings since 2011. Passport Grocery Retailers in Saudi Arabia Euromonitor International March 2014 Growing the success of Irish food & horticulture Farm Superstores MiniMarkets #Riyadh #Dammam #Jeddah 47 11 6 2012 € 380 2013 502 17 0 Operational Indicators Net sales Euro 2011 € 246 Strongest Eastern Province. Plans to aggressively expand geographically. Passport Grocery Retailers in Saudi Arabia Euromonitor International March 2014 Growing the success of Irish food & horticulture Carrefour Hyper 6 Super 7 Market #Riyadh 1 6 #Dammam #Jeddah 4 2 Operational Indicators Net sales Euro 2011 € 578 2012 € 647 2013 € 647 Operates the second-highest number of hypermarket outlets in Saudi Arabia after Hyper Panda. Passport Grocery Retailers in Saudi Arabia Euromonitor International March 2014 Growing the success of Irish food & horticulture Exporting to KSA Saudi Food and Drug Authority (SFDA) The vast majority of food products are subject to a 5% import duty while other products carry 12% or 20% import duty It is recommended to find a strong Saudi partner; Appetite for “Western” Goods. Visiting the market is key Growing the success of Irish food & horticulture Fast Food Outlets by Numbers Chain Number of Outlets Cone Zone 350 Baskin-Robbins 201 Pizza Hut 177 KFC 143 McDonald’s 120 Burger King 65 Subway 45 Canadean Saudi Arabia Foodservice Report July 2012 Growing the success of Irish food & horticulture The United Arab Emirates (UAE) High population of expatriates Islam 96% Work Sunday to Thursday Capital city is Abu Dhabi Growing the success of Irish food & horticulture UAE Economic Overview Oil construction & tourism based GDP per capita is now at $49,800 GDP will grow by 3.9% in 2014 75% of food imported Free Trade Zones attract foreign investors Growing the success of Irish food & horticulture Economic Indicators 2013 (EUR) Inhabitants GDP GDP per capita GDP % nominal growth Consumer Spending Consumer spending per capita Growing the success of Irish food & horticulture 9,031,000 293,767,280,188 32,529 -1.66 147,669,030,468 16,351 Macroeconomics Growing the success of Irish food & horticulture Macroeconomics Growing the success of Irish food & horticulture Demographics Source: CIA Factbook 2013 Growing the success of Irish food & horticulture Top Grocery Retailers 2013 Company Emke Group (LuLu International) Carrefour Spinneys Al Safeer Abu Dhabi Co-op Géant Choithrams Total Sales Area Average Sales SQM Area SQM Grocery Banner Sales (EUR) 445,200 7,546 942,359,906 261,500 134,600 123,000 94,900 Unknown Unknown 6,081 1,819 2,795 4,995 Unknown Unknown 811,554,061 776,179,439 420,340,378 360,932,886 Unknown Unknown Planet Retail Country Report UAE Growing the success of Irish food & horticulture Retail Channels Continued shift from traditional to modern grocery retailers Hypermarkets and superstores • Carrefour, Casino (Géant), Emke group (Lulu International) Supermarkets and neighbourhood stores Retail landscape is dominated by supermarkets and small format neighbourhood stores Growing the success of Irish food & horticulture Lulu Supermarkets 20 Convenience/Forecourt Stores 39 Emke Group (LuLu International) is a major Indian conglomerate GCC, India, Malaysia, Indonesia Targets the price sensitive end of the market Growing the success of Irish food & horticulture Carrefour Hypermarkets Convenience Markets 16 14 Entered the UAE in 2000 via a joint venture with local partner Majid Al Futtaim Targets wealthy local Arab and Western Expat markets Carrefour is now one of the top five players and has taken the lead in terms of innovation and modernisation. Growing the success of Irish food & horticulture Spinneys Superstores/Supermarkets 36 Convenience/Forecourt Stores 22 First convenience stores, opened in 2006 Premium focus on the Western Expat market Al Saeer distribution business Waitrose Growing the success of Irish food & horticulture Safeer Founded in 1992, based in Sharjah, UAE Part of Al Safeer Group Core business lies in Hypermarkets 35 hypermarkets/supermarkets located across all the Emirates, Qatar and Oman Own label business Growing the success of Irish food & horticulture Abu Dhabi Coop Hypermarkets 3 Supermarkets 6 Founded 1981 60,000 customers every single day Aggressive expansion plans Growing the success of Irish food & horticulture Géant Hypermarkets 2 Supermarkets 7 Géant Hypermarket opened in Dubai in 2005 Average of 65000 Product lines which include food, grocery, apparel, house ware, consumer electronics, beauty care, etc. UAE’s first online Hypermarket Growing the success of Irish food & horticulture Choithrams Hypermarkets 11 Supermarkets 24 Choithrams operates a distribution business, and has stores in Oman, Bahrain and Qatar. Tesco PL Asian expats Growing the success of Irish food & horticulture Exporting to the UAE Selecting a logistics model is a critical step Food and beverage items subject to a five per cent import duty (excluding alcoholic beverages). Food labelling regulations-DFCA, ADFCA etc. No alcohol can be used as an ingredient or additive Import of pork and pork products is permitted No food labels can have pictures or recipes listing pork or alcohol Growing the success of Irish food & horticulture Kuwait Economic Indicators 2013 (EUR) Inhabitants GDP GDP per capita GDP % nominal growth Consumer Spending Consumer spending per capita Growing the success of Irish food & horticulture 3,890,000 137,436,409,348 35,331 -3.86 30,419,612,226 7,820 Macroeconomics Growing the success of Irish food & horticulture Macroeconomics Growing the success of Irish food & horticulture Top Grocery Retailers 2013 Company Number of Outlets Total Sales Area SQM Average Sales Area SQM Grocery Banner Sales (EUR) The Sultan Center 29 74,100 2,555 292,519,123 City Centre 3 45,000 15,000 164,885,420 Emke Group (LuLu International) 4 60,000 15,000 113,341,536 Casino 7 28,000 4,000 66,408,281 18 3,600 200 43,513,454 Alliance Boots Growing the success of Irish food & horticulture Oman Economic Indicators 2013 (EUR) Inhabitants GDP GDP per capita GDP % nominal growth Consumer Spending Consumer spending per capita Growing the success of Irish food & horticulture 3,186,000 61,817,727,511 19,403 1.25 18,899,095,028 5,932 Macroeconomics Growing the success of Irish food & horticulture Macroeconomics Growing the success of Irish food & horticulture Top Grocery Retailers 2013 Company 234,000 Average Sales Area SQM 18,000 Grocery Banner Sales (EUR) 465,296,832 32 64,000 2,000 295,891,202 Carrefour 5 56,380 11,276 205,060,524 Al Safeer 16 50,000 3,125 166,029,692 Spinneys 12 18,000 1,500 155,971,748 Emke Group (LuLu International) Khimji Number of Outlets 13 Total Sales Area SQM Growing the success of Irish food & horticulture Bahrain Economic Indicators 2013 (EUR) Inhabitants GDP GDP per capita GDP % nominal growth Consumer Spending Consumer spending per capita Growing the success of Irish food & horticulture 1,174,000 21,468,816,692 18,287 1.07 6,661,449,934 5,674 Macroeconomics Growing the success of Irish food & horticulture Macroeconomics Growing the success of Irish food & horticulture Top Grocery Retailers 2013 Company Number of Outlets Total Sales Area SQM Emke Group (LuLu International) 5 100,000 20,000 188,902,560 Fu-Com 6 18,000 3,000 147,610,441 Casino 2 27,200 13,600 59,685,721 Carrefour 1 11,000 11,000 39,225,293 John Lewis 6 12,258 2,043 33,281,154 Growing the success of Irish food & horticulture Average Grocery Sales Area Banner Sales SQM (EUR) Qatar Economic Indicators 2013 (EUR) Inhabitants GDP GDP per capita GDP % nominal growth Consumer Spending Consumer spending per capita Growing the success of Irish food & horticulture 1,910,000 150,872,219,544 78,991 0.49 18,948,047,379 9,920 Macroeconomics Growing the success of Irish food & horticulture Macroeconomics Growing the success of Irish food & horticulture Top Grocery Retailers 2013 Company Number of Outlets Total Sales Area SQM Average Sales Area SQM Grocery Banner Sales (EUR) Emke Group (LuLu International) 6 54,000 9,000 280,213,245 Family Food Centre 4 18,400 4,600 131,711,901 Carrefour 6 39,480 6,580 127,808,189 Casino 1 12,500 12,500 54,279,664 Panda 4 16,000 4,000 53,630,604 Growing the success of Irish food & horticulture Market Entry Irish Exporter Saudi Exclusive Agent Importers European Consolidator Major Saudi Hyper/Supermarkets Consumer Hyper/Supermarkets Institutional Customers Wholesalers Saudi Importers Hypermarkets Supermarkets Grocery Stores Institutional Customers Consumer Consumer Wholesalers Consumer Institutional Customers Convenience Stores Consumer Growing the success of Irish food & horticulture Tips for Doing Business Know Whom You’re Meeting Understand the culture Be mindful of local customs Make it personal Go with the flow and accept changes Understand negotiating style Be careful when choosing a go-to-market model Growing the success of Irish food & horticulture Buyer Targets for Marketplace 2015 8 Dairy 4 Seafood 4 meat 7 (frozen, bakery, confectionery & snacks) Primary focus on KSA & UAE Growing the success of Irish food & horticulture Questions Thank you Growing the success of Irish food & horticulture AIDAN COTTER Growing the success CHIEF EXECUTIVE BORD BIA of Irish28food & horticulture JANUARY 2009
