Saudi Arabia Food and Drink Q4 2012

Date: September 19, 2012
Pages: 86
Price:
US$ 1,295.00
Publisher: Business Monitor International
Report type: Strategic Report
Delivery: E-mail Delivery (PDF)
ID: S4B71499CA4EN
Leaflet:

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Includes 3 FREE quarterly updates

A host of recently released leading indicator data has reaffirmed our very positive view on Saudi Arabia’s consumer sector, which looks set to experience strong growth moving ahead. These figures show that private consumption in Saudi Arabia will continue to grow at a healthy pace in the near term and demonstrate that the private sector – and retail in particular – is booming, with purchasing managers’ index, sales and consumer confidence data all remaining strong. The figures are a clear demonstration of the positive impact that last year’s US$110bn government stimulus package – which included hikes in public sector wages, as well as increased spending on infrastructure and social benefits – is having on consumer spending, as well as on the wider economy. Our positive outlook on Saudi Arabia’s consumer sector is in line with our broader economic outlook for the country, with GDP growth of 5.2% forecast for 2012. We forecast private consumption growth of 6.0% in 2012, and expect the economy to remain a regional outperformer in the near term.

Headline Industry Data
  • 2012 food consumption growth in local currency = 11.4%; forecast growth 2011-2016 = 55.3%
  • 2012 confectionary value sales growth = 12.0%; forecast growth to 2016 = 46.5%
  • 2012 mass grocery retail sales growth = 11.7%; forecast growth to 2016 = 66.6%
Key Company Trends

Kraft Expanding Local Production: In June 2012 US-based multinational food group Kraft Foods announced the expansion of its Nabisco biscuit plant in Saudi Arabia. The expansion of the Dammam plant, a joint venture between Kraft and local conglomerate Olayan Group, will allow Kraft to more than double its production volumes, a Kraft spokesperson said. The expansion will add 8,500 square metres of space as well as a new production line that adds more capacity to produce Oreo and Nabisco biscuits. Savolo Posts Solid Results: In late July 2012 The Savola Group posted strong Q212 results ahead of analysts’ forecasts. The company’s net income for Q212 reached US$90.9mn, which represents a hike of 48% compared to the same period in 2011; operating profit touched a figure of US$160.97mn, representing a rise of 42.6% compared to the same quarter in 2011.

Key Risks To Outlook

Given the extent to which our forecasts rely on heavy government spending, and by extension elevated oil prices, a sharper-than-expected downturn in the global economy, if it was to translate into a substantial decline in oil prices, would pose significant downside risks to our forecasts for Saudi Arabia’s fiscal and current account position, though it remains highly unlikely that either account will fall into the red in the near term.

Over the longer-term, as with most states in the Middle East, the main risk to outlook is that the government is replaced with one which is less friendly to the US, and hence to foreign investment in general. Saudi Arabia already has an Islamist government, but there are Islamist factions which are opposed to any foreign companies benefiting from Saudi oil wealth. If living standards dropped substantially, we would expect support for al-Qaeda to rise, and the government to find it harder to contain the threat.
BMI Industry View
SWOT Analysis
Saudi Arabia Food Industry SWOT
Saudi Arabia Drink Industry SWOT
Saudi Arabia Mass Grocery Retail Industry SWOT
Business Environment
BMI’s Core Global Industry Views
  Table: Core Views
Middle East Food & Drink Risk/Reward Ratings
  Table: MENA Risk/Reward Ratings Sub-Categories, Q412 (scores out of 10)
  Table: MENA Food & Drink Risk/Reward Ratings, Q412
Saudi Arabia Food & Drink Business Environment Rating
Macroeconomic Outlook
  Table: Economic Activity
Industry Forecast Scenario
Consumer Outlook
Food
Food Consumption
  Table: Food Consumption Indicators – Historical Data & Forecasts, 2009-2016
Confectionery
  Table: Confectionery Value Sales – Historical Data & Forecasts, 2009-2016
Drinks
Soft Drinks
  Table: Soft Drinks Value Sales – Historical Data & Forecasts, 2009-2016
Alcoholic Drinks
Hot Drinks
  Table: Hot Drinks Value Sales – Historical Data & Forecasts, 2009-2016
Mass Grocery Retail
  Table: Mass Grocery Retail Sales – Historical Data & Forecasts, 2009-2016
  Table: Mass Grocery Retail Sales By Format
Trade
  Table: Trade Indicators – Historical Data & Forecasts, 2009-2016
Food
Key Gulf Region Industry Trends And Developments
Almarai Investing In Diversification
New Products And Frontier Markets
Growing Investment Interest From Multinational Corporations
Growing Popularity Of Eating Out
Snack Chains Growing in Popularity
Market Overview
Food Processing
Dairy Processing
Agriculture
Halal
Saudi Arabia Food And Drink Report Q4 2012
© Business Monitor International Ltd Page
Drink
Key Gulf Region Industry Trends And Developments
Bottled Water Sector Growing In Importance
Frontier Market Investment Strengthening
Carbonates Shake-Up
Diversifying Away From Carbonates
Market Overview
Soft Drinks
Hot Drinks
Alcoholic Drinks
Mass Grocery Retail
Key Gulf Region Industry Trends And Developments
Foreign Retailers Looking At Saudi Arabia
Frontier Market Investment
Growing Investment Into Modern Convenience Retailing
Market Overview
  Table: Mass Grocery Retail Sector Structure – Estimated Sales Value By Format (US$bn), 2005-2010
  Table: Mass Grocery Retail Sector Structure – Estimated Sales Value By Format (US$bn), 2011-2016
  Table: Mass Grocery Retail Sector Structure – Estimated Sales Value By Format (SARbn), 2005-2010
  Table: Mass Grocery Retail Sector Structure – Estimated Sales Value By Format (SARbn), 2011-2016
Competitive Landscape
  Table: Key Players In Saudi Arabia’s Food & Drink Sector
  Table: Key Players In Saudi Arabia’s Mass Grocery Retail Sector
Company Monitor
Food
Al Safi-Danone
Saudi Dairy & Foodstuff Company (SADAFCO)
Almarai
Al Rabie Saudi Foods
Drink
Aujan
Mass Grocery Retail
Savola Group – Al Azizia Panda
EMKE Group (LuLu)
Carrefour MAF – Saudi Arabia
Demographic Outlook
  Table: Saudi Arabia’s Population By Age Group, 1990-2020 (‘000)
  Table: Saudi Arabia’s Population By Age Group, 1990-2020 (% of total)
  Table: Saudi Arabia’s Key Population Ratios, 1990-2020
  Table: Saudi Arabia’s Rural And Urban Population, 1990-2020
Risk/Reward Ratings Methodology
  Table: Rewards
  Table: Risks
Weighting
  Table: Weighting
BMI Food & Drink Industry Glossary
Saudi Arabia Food And Drink Report Q4 2012
© Business Monitor International Ltd Page
Food & Drink
Mass Grocery Retail
BMI Food & Drink Forecasting & Sourcing
How We Generate Our Industry Forecasts
Sourcing
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