gcc markets-middle east · ksa cities each year. presence in 33 cities in ksa. 6 new outlets-2013...
TRANSCRIPT
Growing the success of Irish food & horticulture
AIDAN COTTER
CHIEF EXECUTIVE
BORD BIA
28 JANUARY 2009
Growing the success of Irish food & horticulture
GCC markets-Middle East
Growing the success of Irish food & horticulture
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
4%
74%
1%
20%
1%
Beef
Beverages
Dairy
Edible Hort
Pigmeat
Poultry
Prepared Foods
Seafoods
Sheepmeat
Source: CSO
€320m
Growing the success of Irish food & horticulture
GCC Food Imports 2020, by Value
3% 9%
8%
6%
60%
14%
Bahrain
Kuwait
Oman
Qatar
Saudi Arabai
United Arab Emirates
Source EUI
Value: US$53.1BN
Growing the success of Irish food & horticulture
GCC Members Estimate GDP % Change
0
2
4
6
8
10
12
14
2011 2012 2013 2014 2015 2016 2017 2018
Bahrain
Kuwait
Oman
Qatar
Saudi Arabia
United Arab Emirates
Source IMF.org
Growing the success of Irish food & horticulture
GCC Member Population % Increase, 2000-2010
0
50
100
150
200
250
Bahrain Kuwait Oman Qatar Saudi Arabia United Arab Emirates
Source UN
Growing the success of Irish food & horticulture
GCC Age Profile 2010
26%
54%
18%
2% 0%
Source: UN
0-4yrs
15-39yrs
40-64yrs
65-79yrs
80+yrs
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
Food security is a Strategic Concern
Population Growth
Changing Dietary Habits
Economic Growth
Increased Demand for
Food
Environment Unsuitable for Food
Production
Growing the success of Irish food & horticulture
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 $921.7 billion
GDP +6.8%
Inflation 4% Source CIA WorldFactbook, 2013
Growing the success of Irish food & horticulture
Economic Indicators
2013 (EUR)
Inhabitants 29,632,000
GDP 541,268,380,128
GDP per capita 18,266
GDP % nominal growth -2.25
Consumer Spending 154,632,878,527
Consumer spending per capita 5,218
Growing the success of Irish food & horticulture
Macroeconomics
Growing the success of Irish food & horticulture
Macroeconomics
Growing the success of Irish food & horticulture
KSA Population
Source: CIA Factbook 2013
Growing the success of Irish food & horticulture
Retail Overview
Saudi Arabia is the second largest retail market
Retail sales of over €72billion
Competitive market
Modern Trade 46%
Access to the traditional trade is important for
women in Saudi as they cannot drive to the larger,
out of town stores
Growing the success of Irish food & horticulture
Retail Landscape
Savola Group.
Operate across M.
East. Largest retailer
in Saudi w/nationwide
presence
Targeted at traditional,
middle to low income
Saudi’s. 80% Othaim’s
shoppers = nationals
Target to be #1 Family
Retailer Expanding
Nationwide. Target
upper income shoppers.
Growing the success of Irish food & horticulture
Grocery Retailers
Retailer
Grocery sales
2012
(US$ mn)
Grocery Sales
2012 (€)
(Exchange rate
US$1=€0.738)
% Change in
grocery sales 11-
12*
IGD grocery
retail market
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
Bindawood –
Danube 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
Majid Al Futtaim
(Carrefour) 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
Note: excludes Cash & Carry and Members Club operations
Source: IGB Retail Analysis Saudi Arabia
Growing the success of Irish food & horticulture
Hypermarkets and Superstore Leaders
Growing the success of Irish food & horticulture
Panda
Aggressively expanding its geographic coverage of
KSA cities each year. Presence in 33 cities in KSA.
6 new outlets-2013
#Hyper #Super #Riyadh #Dammam #Jeddah
44 107 58 11 19
Operational Indicators
2011 2012 2013
Net sales Euro €2,690 M € 3,263 € 3,615
Passport Grocery Retailers in Saudi Arabia Euromonitor International March 2014
Growing the success of Irish food & horticulture
Al Othaim
Nationwide coverage, Strongest presence is in
Riyadh in the central region
own strong distribution division named Universal
Marketing.
Branch Corner Ware
house
Whole
sale
Hyper #Riyadh #Dammam #Jeddah
88 24 3 9 5 58 0 4
Operational Indicators
2011 2012 2013
Net sales (SR million) € 1,120 € 1,134 € 1,131
Passport Grocery Retailers in Saudi Arabia Euromonitor International March 2014
Growing the success of Irish food & horticulture
Bin Dawood/Danube
• L
Stagnanat-slow expansion plans and fierce
competition.
No new openings since 2011.
Brand Hyper Super #Riyadh #Dammam #Jeddah
Bin Dawood 5 13 0 0 7
Danube 0 11 2 0 8
Operational Indicators
2011 2012 2013
Net sales (SR million) € 906 € 848 € 885
Passport Grocery Retailers in Saudi Arabia Euromonitor International March 2014
Growing the success of Irish food & horticulture
Farm
Strongest Eastern Province.
Plans to aggressively expand geographically.
Superstores MiniMarkets #Riyadh #Dammam #Jeddah
47 17 0 11 6
Operational Indicators
2011 2012 2013
Net sales Euro € 246 € 380 502
Passport Grocery Retailers in Saudi Arabia Euromonitor International March 2014
Growing the success of Irish food & horticulture
Carrefour
Operates the second-highest number of
hypermarket outlets in Saudi Arabia after Hyper
Panda.
Hyper Super Market #Riyadh #Dammam #Jeddah
6 7 1 6 4 2
Operational Indicators
2011 2012 2013
Net sales Euro € 578 € 647 € 647
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 9,031,000
GDP 293,767,280,188
GDP per capita 32,529
GDP % nominal growth -1.66
Consumer Spending 147,669,030,468
Consumer spending per capita 16,351
Growing the success of Irish food & horticulture
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 Total Sales Area
SQM Average Sales
Area SQM Grocery Banner
Sales (EUR)
Emke Group
(LuLu
International)
445,200 7,546 942,359,906
Carrefour 261,500 6,081 811,554,061 Spinneys 134,600 1,819 776,179,439 Al Safeer 123,000 2,795 420,340,378 Abu Dhabi Co-op 94,900 4,995 360,932,886 Géant Unknown Unknown Unknown Choithrams Unknown 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
Emke Group (LuLu International) is a major Indian
conglomerate
GCC, India, Malaysia, Indonesia
Targets the price sensitive end of the market
Supermarkets Convenience/Forecourt Stores
20 39
Growing the success of Irish food & horticulture
Carrefour
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.
Hypermarkets Convenience Markets
16 14
Growing the success of Irish food & horticulture
Spinneys
First convenience stores, opened in 2006
Premium focus on the Western Expat market
Al Saeer distribution business
Waitrose
Superstores/Supermarkets Convenience/Forecourt Stores
36 22
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
Founded 1981
60,000 customers every single day
Aggressive expansion plans
Hypermarkets Supermarkets
3 6
Growing the success of Irish food & horticulture
Géant
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
Hypermarkets Supermarkets
2 7
Growing the success of Irish food & horticulture
Choithrams
Choithrams operates a distribution business, and
has stores in Oman, Bahrain and Qatar.
Tesco PL
Asian expats
Hypermarkets Supermarkets
11 24
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 3,890,000
GDP 137,436,409,348
GDP per capita 35,331
GDP % nominal growth -3.86
Consumer Spending 30,419,612,226
Consumer spending per capita 7,820
Growing the success of Irish food & horticulture
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
Alliance Boots 18 3,600 200 43,513,454
Growing the success of Irish food & horticulture
Oman Economic Indicators
2013 (EUR)
Inhabitants 3,186,000
GDP 61,817,727,511
GDP per capita 19,403
GDP % nominal growth 1.25
Consumer Spending 18,899,095,028
Consumer spending per capita 5,932
Growing the success of Irish food & horticulture
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)
13 234,000 18,000 465,296,832
Khimji 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
Growing the success of Irish food & horticulture
Bahrain Economic Indicators
2013 (EUR)
Inhabitants 1,174,000
GDP 21,468,816,692
GDP per capita 18,287
GDP % nominal growth 1.07
Consumer Spending 6,661,449,934
Consumer spending per capita 5,674
Growing the success of Irish food & horticulture
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)
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
Qatar Economic Indicators
2013 (EUR)
Inhabitants 1,910,000
GDP 150,872,219,544
GDP per capita 78,991
GDP % nominal growth 0.49
Consumer Spending 18,948,047,379
Consumer spending per capita 9,920
Growing the success of Irish food & horticulture
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
European Consolidator
Major Saudi Hyper/Supermarkets
Consumer
Saudi Importers
Hypermarkets
Supermarkets
Grocery Stores
Consumer
Institutional Customers Wholesalers
Consumer Institutional Customers
Convenience Stores
Consumer
Saudi Exclusive Agent Importers
Hyper/Supermarkets Institutional Customers
Wholesalers
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
AIDAN COTTER
CHIEF EXECUTIVE
BORD BIA
28 JANUARY 2009
Growing the success of Irish food & horticulture
Questions
Thank you