global opportunities - dubai exports · 2016. 5. 12. · it is estimated that the food exports from...

Global Opportunitiesin the Food and Beverage Sector

Dubai ExportsThe all prevailing increase in demand for foodstuffs throughout the world, coupled with UAE’s inherent strengths in the valueaddition and production of different types of food and drinks have raised the potential for UAE products to reach all corners of theworld. Dubai, already a global trade hub, in the coming years will increasingly see a larger volume of food items passing throughits ports with the Sea-Air “Dubai Logistics Corridor” in Jebel Ali. With the highly advanced and sophisticated logistics infrastructurein place, global businesses are increasingly using Dubai and the UAE to establish their operations to export their food productsglobally, be it Africa or the CIS. DP World, Dubai’s port operator along with Dubai World Central and Dubai Airports, areaugmenting their sophisticated warehousing and logistic facilities to cope with the growing demand from companies, ranging fromsmall and medium to multinationals in this sector.

Dubai Exports, since its inception has been focusing on the growth of exports in the Food and Beverage (among other selected)sectors. This focus have yielded dividends through increasing demand both for investment in the UAE as well as for the exportand re-export of F&B products from Dubai and the UAE. Markets like Africa and Asia (apart form the Middle East itself) have beencritical for growth and our strategies to increase business ties with countries in these regions have led to marked increases inF&B trade through Dubai.

Promoting F&B exports through participation in business missions and global flagship exhibitions like World Food Moscow,Anuga, Sial, Food Africa, Malaysia International Food & Beverage Trade Fair can, and have helped UAE’s exporters to establishthemselves in these markets over the years. “Increasing demand from global markets, increases the potential of F&B producers,here in the United Arab Emirates to expand and enter new markets through their exports.

We hope this report, prepared in cooperation with COFACE, a globally operating credit insurer, offering companies solutionsagainst the risk of financial default of their buyers for export, will help you understand the global F&B market and how DubaiExports plays a small part in moving food across the world.

End. Saed Al Awadi,

CEO- Dubai Exports

CofaceThe Food sector is an important industry of the UAE economy and Dubai particularly is a key hub for Food exports. Governmentagencies such as the Dubai Exports is doing a lot to support the development of the export sector and are providing constantguidance, advice and practical support to traders in this aspect.

It is estimated that the food exports from Dubai reached AED 9.7 billion in 2014 an increase of 4% from 2013 figures of AED 9.3billion. This increase is attributed to global population growth, rising middle class and high disposable incomes. Also, Halal food isan important component of this food market. It has a lot of potential to grow exponentially in the next five years due to- increasedawareness, increase in growth of Muslim population and rising incomes in Muslim dominated countries.

However to sustain growth in trade companies have to overcome challenges such as:-Lack of information on country risks andbusiness environment, accuracy of information on buyers, inefficient credit management policies, access to finance. Having saidthat, support from a credit insurance company can, firstly, safeguard revenue stream from bad debt loss due to unforeseen non-payment, slow payment or insolvencies due to commercial and/or political risks. Secondly, it can also improve borrowing powerand increase available capital by converting receivables into a performing asset. Finally, strengthen structure and discipline forcredit decision making. Coface has over 70 years experience in working alongside companies, and our constant aim is to supporttheir development and making their trade safe in domestic as well as international markets. With the strong growth momentumthat we see in the region and particularly based on the robust growth of the Food Sector, I believe that Coface’s services will be ofmuch value for Food companies trading in and out of the region.

We hope that this joint publication from Dubai Exports & Coface helps you get valuable insights into the Food sector andencourages your export ambitions for the future.

Mr. Massimo Falcioni,

CEO- Middle East Countries – Coface

Global Economics

The Expansion Landscape

Taken from Grant Thornton Expanding horizons: Food and Beverage looks for growth

The Keys to Global Success


Capitalising on international F&B efforts requires innovation and adaptation of processes, products and strategies. Successful companies: But even when all signals point to going global, F&B executives face an array of challenges.

These include geopolitical uncertainty; distribution and logistics limitations for perishable goods; food safety regulations that vary by country, region, state or province; and a tireless battle for shelf space.• tailor their products, packaging and messaging to the cultures and lifestyles of their

destination markets• explore local market dynamics, competitors and distribution channels in those areas• identify the most profitable product opportunities• build an informed picture of potential pitfalls• have a clear understanding of regulatory requirements in every jurisdiction in which they

operate• understand the mind-sets of partners and build long lasting, profitable relationships

The Keys to Global Success


Global F&B growth is fed by changing demographics around the world. Successful expansion will rely on technology to find and understand consumers and to manage increasingly demanding safety and regulatory issues.

The growing middle classKeeping up with changing population dynamics can strain food and beverage providers as they try to stay ahead of the trends. Middle classes are growing throughout the world, even in countries where disposable income was once considered a luxury.

The power of technologyF&B companies use technology, the internet and social media to adapt to shifting consumer behaviours at home and abroad.

Complex supply chainsF&B companies can increasingly purchase ingredients from across the globe. This broadens opportunities but complicates supply chains. Companies will have to integrate varied regulations and customer requirements into their supply-chain procurement, monitoring and tracking capabilities.

Entering new marketsSuccessful market entry requires keen insights into local market dynamics.

The Barriers to Entry


F&B companies must research new markets before making costlyexpansion decisions. These assessments will locate the best opportunities;flag the most significant barriers; and identify government and industryresources that can help maximise return on investment.

Market potentialThe global F&B retail industry is expected to grow toUS$5,776 billion in 2017.To earn a share of thatopportunity, F&B executives need to look beyondtheir traditional borders.

CultureEven as cross-cultural exchanges increase and geographic barriers break down, national and ethnic traditions remain strong – both in how consumers view products and in how businesses and executives interact.

Optimising business structuresIdentify the business structure/s that canbe used in the region you plan to enter.

Supply chain anddistribution channelsDevelop detailed maps of how your goods will movethroughout a region from suppliers to retailers tocustomers.

The Barriers to Entry (continued)


Regulation and complianceRegulatory requirements often form a lengthychecklist. They include inspection standards, labellingand product claims, traceability processes, and recallprocedures..

Intellectual propertyIt is important to understand the intellectual property regime in each target country, and how those regulations may or may not have an impact on yourproducts.

Tariff and tax implicationsTariffs are typically collected on imported goods togenerate income and/or to protect domesticindustries. These taxes can significantly raise theprices of your products in comparison to domesticgoods and even squeeze you out of the market.

Currency issuesBe aware of any currency control issues that mayprevent you from repatriating funds. Some countrieshave few restrictions for transferring cash out of thecountry, while others dictate the volume and method.

Healthy Eating – Premium Pricing

Healthy Eating TrendsIn Asia-Pacific, the importance of food attributes largely mirrors theglobal averages, with a few exceptions.In Europe, comparatively smaller percentages rate health attributesas a very important influencing factor for purchase decisionsIn Africa/Middle East, beneficial ingredients are particularlyimportant with foods that are high in protein (43%) and fortifiedwith calcium (44%), vitamin (43%) and minerals (40%)considered very important—all above the global average.In Latin America, “less is more” attributes are particularly appealingin this region, including low/no cholesterol (25 percentage points{pp} above the global average), low/no fat (+24 pp) and lowsalt/sodium (+22 pp).In North America, there is an absence of high fructose corn syrup,which is above the global average.

Key TrendsContinuously investing in healthier product offerings: By 2015, sales of natural and organic foods and beverages in the US are expected to surpass US$78 billion, up from US$39 billion in 2010, according to the Natural and Organic Foods and Beverages in the US report, published by US-based market research company Packaged Facts, in July 2011. Packaged goods companies are responding well to this shift toward healthier lifestyles, by using organic or bioactive ingredients in their products. They are likely to invest in new technologies such as high hydrostatic pressure and ultraviolet irradiation to introduce safer products. This is, however, expected to inevitably mean higher production costs for these companies in the long run.

Developing standardized nutrition labels: Consumers today are increasingly looking for simple, easy-to-comprehend and uniform labeling on the packaged goods they purchase. Therefore, to reinforce the adoption of health and safety practices by packaged goods companies, nutrition labeling guidelines across the globe are likely to increase in the future.

Adopting safe and innovative packaging technologies: With the increase in demand for fresh packaged food products and increased concerns about food safety, companies are adopting active and smart packaging technology, in order to increase the shelf life of their food products. By 2015, the global market for active and smart packaging technology for food and beverages is expected to increase at a CAGR of 8.2 percent,from US$15.8 million in 2010 to US$23.5 million.

Taken from KPMG INTERNATIONAL, Issues Monitor, Sharing knowledge on topical issues in the Food, Drink and Consumer Goods Industry June 2012, Volume 11

Key TrendsConvenience for Foodies. Continued interest in home cooking has been driven by cooking shows on TV and byblogging foodies. It's seen as fashionable, fun and social, as well as healthy and cost-effective. It has drivendemand for a greater choice of fresh foods, ingredients for cooking from scratch and a wider use of recipesuggestions by manufacturers and retailers.

Marketing to Millennials. The so-called Millennial generation, generally aged between 15 and 35, now accountsfor about a third of the global population and is tech savvy and socially engaged. They are well informed, want totry something different and are generally less brand loyal than older consumers. They want to connect withproducts and brands and know the story behind them.

Snacks Rise to the Occasion. Formal mealtimes are continuing to decline in popularity and growing numbers offoods and drinks are now considered to be snacks. Quick, healthy foods are tending to replace traditional mealoccasions and more snacks are targeted at specific moments of consumption, with different demand influences atdifferent times of day.

Good Fats, Good Carbs. With concerns over obesity, there is a growing emphasis on unsaturated and natural fatsand oils that has seen rising interest in omega-3 fatty acid content, as well as the return of butter to favour as anatural, tasty alternative to artificial margarines that may be high in trans fats. In the same way, naturally occurringsugar is being favoured at the expense of added sugars and artificial sweeteners.

Taken from FoodBev Media Ltd http://www.foodbev.com/news/top-5-trends-in-food-and-beverage-for-20#.VRjnA_yUfMl

Global overview of nutrition labeling regulations

Global Halal Food Market

Taken from State of the Global Islamic Economy Report 2013

Coface Country Risk Assessment Map

Source: Coface

Source: ITC

global opportunities - dubai exports · 2016. 5. 12. · it is estimated that the food exports from...

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