Saudi Arabia Food and Drink Report Q3 2009

Saudi Arabia Food and Drink Report Q3 2009

Published By: Business Monitor International
June 2009
R302-6597
Online Download $495.00

Description

Saudi Arabia has fallen back into fourth place in BMI’s regional Food & Drink Business EnvironmentRatings table for Q309. A decline in crude-oil prices and private investment has forced BMI to revisedown the kingdom’s GDP growth forecast to 2.1% in 2009. Although it does not possess the lofty percapitaGDP of some of its regional peers, Saudi Arabia boasts a large and youthful population thatallows it to register as the region’s largest market. Despite a weakened near-term macroeconomicoutlook, a number of food and drink companies have continued to fare well, not least within thecompetitive dairy sector, as discussed in BMI’s recently published Saudi Arabia Food & Drink Reportfor Q309.

In the past quarter, Saudi-based dairy major Almarai reported Q109 net income of SAR197.4mn(US$52.64mn) - a 22% year-on-year (y-o-y) uptick. The posting fell in line with expectations andadded authority to claims that the company should continue to post solid financials in FY09 despite theGulf Co-operation Council (GCC) region’s vulnerability to the global financial meltdown. In a furtherdevelopment, leading domestic company Savola Group increased its equity position in Almarai to29%. The additional investment is reputed to have been worth SAR500mn (US$133.3mn).

Although Saudi Arabia has the ignominious distinction of possessing one of the world’s widest foodand drink trade deficits, its dairy sector has emerged as the region’s standard bearer. In line with anuptick in food consumption, demand for white goods picked up considerably on the back of the oil-ledboom up to Q308. Almarai’s Q09 results attest to the sector’s likely resilience in 2009. The dairy majortussles with Saudi Dairy & Foodstuffs Co, Al Safi Danone and Al Rabie Saudi Foods for marketshare in what is arguably the kingdom’s most competitive food sector.

While the fresh dairy segment remains Almarai’s chief source of revenue, the company has made movesto increase sales within its fruit juice segment (fruit juice sales contributed 10% to total turnover inFY08). Earlier this year, Almarai signalled its intent by entering into partnership with PepsiCo to formInternational Dairy and Juice and is set to target a number of non-GCC Middle Eastern markets aswell as the North African region. Domestically, competition is provided by local rival Aujan, andUAE-based Masafi, which has a large regional export business.

BMI has forecast food consumption to push up by 10.9% though to 2013, which, banded together withtheir regional sales, should allow Saudi Arabia’s dairy majors to register steady turnover uptick. Thecompetitiveness of the sector means potential foreign investors are likely to look elsewhere. Yet thekingdom’s soft drinks industry remains a valid target for investors seeking regional entry. BMI hasforecast soft drinks sales growth of 26.1% through to 2013.

Table of Contents

Executive Summary: SWOT Analysis; Saudi Arabia Food Industry SWOT; Saudi Arabia Drink Industry SWOT; Saudi Arabia Mass Grocery Retail Industry SWOT; Business Environment; Regional Food & Drink Business Environment Ratings
Table: Middle East Food & Drink Business Environment Ratings: Saudi Arabia’s Food & Drink Business Environment Rating; Macroeconomic Outlook
Table: Saudi Arabia - Economic Activity, 2006-2013: Food; Industry Forecast Scenario; Food Consumption; Food consumption indicators; Trade
Table: Food, Drink & Tobacco Trade Indicators (US$mn): Confectionery
Table: Saudi Arabia Confectionery Forecast: Industry Developments; Market Overview; Food Processing; Dairy Processing; Agriculture; Halal Food
Table: Muslim Populations In Select Countries: Drink; Industry Forecast Scenario; Soft Drinks
Table: Food, drink and tobacco indicators: Hot Drinks
Table: Drinks indicators: Alcoholic Drinks; Industry Developments; Market Overview; Soft Drinks; Hot Drinks; Alcoholic Drinks; Mass Grocery Retail; Industry Forecast Scenario
Table: Retail indicators (US$bn)
Table: Grocery Retail Sales By Format - Historical Data and Forecasts: Industry Developments; Market Overview
Table: Structure of Saudi Arabia's Mass Grocery Retail Sector by Estimated Number of Outlets
Table: Structure of Saudi Arabia's Mass Grocery Retail Sector - Estimated Sales Value by Format (US$bn)
Table: Structure of Saudi Arabia's Mass Grocery Retail Sector - Average Sales Value per Retail Outlet - US$mn, 2008: Competitive Landscape; Key Players; Food and Drink
Table: Key Players in Saudi Arabia's Food & Drink Sector: Mass Grocery Retail
Table: Key Players in Saudi Arabia's Mass Grocery Retail Sector: Company Analysis; Food; Al Safi-Danone; SADAFCO - Saudi Dairy & Foodstuff Company; Almarai Dairy; Al Rabie Saudi Foods; Drink; Aujan; Masafi; Mass Grocery Retail; Savola Group - Al Azizia Panda; Carrefour MAF - Saudi Arabia; Appendix; Commodity Price Forecasts; Corn
Table: Corn, 2005-2010: Soybean
Table: Soybean, 2005-2010: Rice
Table: Rice, 2005-2010: Wheat
Table: Wheat, 2005-2010: Cocoa
Table: Cocoa, 2005-2010: Coffee
Table: Coffee, 2005-2010: Milk
Table: Milk, 2005-2010: Sugar
Table: Sugar, 2005-2010: Country Snapshot: Saudi Arabia Demographic Data; Section 1: Population
Table: Demographic Indicators, 2005-2030
Table: Rural/Urban Breakdown, 2005-2030: Section 2: Education and Healthcare
Table: Education, 2003-2005
Table: Vital Statistics, 2005-2030: Section 3: Labour Market and Spending Power
Table: Employment Indicators, 1999-2006
Table: Consumer Expenditure, 2000-2012 (US$): Food & Drink Business Environment Ratings; Ratings Methodology; Ratings Overview; Ratings System; Indicators; Limits Of Potential Returns; Risks To Realisation Of Potential Returns; Weighting; Weighting; BMI Food & Drink Industry Glossary; Food & Drink; Mass Grocery Retail; BMI Food & Drink Forecasting & Sourcing; How We Generate Our Industry Forecasts; Sourcing

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