Qatar Food and Drink Report Q2 2012

Our outlook for Qatar’s consumer sector – the food and drink sector in particular – remains positive in line with the rosy outlook for the country’s economy. We are currently forecasting GDP growth of 7.9% and 6.9% in 2012 and 2013 respectively and believe that political instability is unlikely to emerge in Qatar, as people are generally satisfied with their quality of life. Apart from some conservative circles which disapprove of recent changes, such as the availability of alcohol or the improving status of women, the country’s extensive wealth keeps citizens uninterested in the political process.
Moreover, there was a surge in hydrocarbon revenues in 2011, which was accompanied by hikes in social benefits as well as across-the-board wage increases of 60% for all government workers and between 50% and 120% for military personnel. While these stimulus measures appeared to be motivated by a need to appease the population amid regional tensions, we believe the ongoing political stability will decrease the government’s desire to introduce further populist spending measures. Indeed, the government has not indicated any plans to increase social spending in FY2012/13, according to the IMF’s head of mission to Qatar. The country is expecting continued investment in major infrastructure projects as it prepares to host the FIFA World Cup in 2022.

Headline Industry Data .. 2012 food consumption growth = +6.5%; forecast to 2016 = +27.5%.
.. 2012 soft drinks value sales = +7.9%; forecast to 2016 = +32.8%.
.. 2012 mass grocery retail sales = +6.8%; forecast to 2016 = +30.4%.
.. 2012 supermarket sales = +1.3%; forecast to 2016 = +12.5%.

Key Industry Trends And Developments Investing in Snacks Sector: In late 2011, American company Baskin-Robbins, a subsidiary of Dunkin’ Brands, announced that it will pursue further expansion throughout the Middle East and plans to open 25 new stores in the Middle East by 2013. Also in late 2011, US-based frozen dessert chain Tasti D-lite announced that it will be expanding in the Middle East via a franchising agreement. Al-Himmah International Limited reached an agreement to expand the chain in six countries in the region – Bahrain, Kuwait, Qatar, Saudi Arabia, Lebanon and Jordan, with the first stores expected to be opened in Saudi Arabia in 2012 and 30 stores to be opened over the next five years.
Agthia Makes Major Acquisition: Abu Dhabi state-backed food and beverage producer Agthia Group acquired Turkish spring water producer Pelit Su in early 2012. The acquisition will provide Agthia with an existing manufacturing plant that is equipped with three bottling lines as well as additional space for future capacity expansion. With this acquisition, Agthia has clearly underlined the growing significance of its bottled water division as a growth pillar, and Pelit Su’s established spring water brands are likely to facilitate Agthia’s expansions beyond Turkey and the UAE into the wider Gulf region.

Risks To Outlook Oil Price Stability: The main threat for Qatar remains the fluctuations in global oil prices, even with the political upheaval throughout the region. The economy is heavily reliant on hydrocarbon exports for income, and a drop-off in activity in the world’s largest economies could result in a reduced demand for oil and gas, driving down prices. Such an eventuality would be likely to depress growth and place some pressure on government finances. 

Qatar Food and Drink Industry Q2 2012

Published : June 2012                   No. of Pages : 64                     Price:  US$1175

 

Table of Content

SWOT Analysis . 7
Qatar Food Industry SWOT ... 7
Qatar Drink Industry SWOT .. 8
Qatar Mass Grocery Retail Industry SWOT .. 9
Business Environment .. 10
BMI’s Core Global Industry Views ... 10
Table: Agricultural Commodity Prices 12
Table: Core Views Q212 .. 21
Middle East Food & Drink Risk/Reward Ratings . 22
Table: Middle East Food & Drink Risk/Reward Ratings Q212 ... 24
Qatar Food & Drink Risk/Reward Ratings ... 25
Macroeconomic Outlook ... 26
Table: Economic Activity . 28
Industry Forecast Scenario ... 29
Consumer Outlook 29
Food.. 32
Consumption 32
Table: Food Consumption Indicators – Historical Data & Forecasts . 33
Drink . 33
Soft Drinks ... 33
Table: Soft Drinks Value Sales – Historical Data & Forecasts ... 34
Hot Drinks ... 35
Mass Grocery Retail . 35
Table: Mass Grocery Retail Sales – Historical Data & Forecasts... 36
Table: Grocery Retail Sales By Format, % .. 37
Trade 37
Table: Trade Indicators – Historical Data & Forecasts .. 38
Food . 39
Key Gulf Region Industry Trends .. 39
Premiumisation Key To Growth... 39
Shift In Food Security Strategy 39
Potential Cooperation With Belarus? .. 40
Growing Popularity Of Eating Out .. 41
Snack Chains Growing in Popularity ... 41
Growing Investment Interest From Non-Regional MNCs 42
Market Overview .. 43
Food Production .. 43
Halal Food ... 43
Drink 45
Key Gulf Region Industry Trends .. 45
Coca-Cola Makes An Aggressive Investment ... 45
Bottled Water Sector Growing in Importance .. 45
Carbonate Prices Moving Up .. 46
Diversifying Away From Carbonates ... 46
Tang Proving Very Popular . 47
Market Overview .. 47
Hot Drinks ... 47
Soft Drinks ... 47
Mass Grocery Retail ... 49
Key Gulf Region Industry Trends .. 49
Géant Pursuing Region Wide Expansion . 49
Frontier Market Investment . 49
Growing Investment Into Modern Convenience Retailing 50
Multinational Presence Growing? ... 51
Market Overview .. 51
Table: Mass Grocery Retail Sales Value By Format (US$bn) . 52
Competitive Landscape . 53
Table: Key Players In Qatar’s Food & Drink Sector ... 53
Table: Key Players in Qatar’s Mass Grocery Retail Sector . 53
Company Monitor ... 54
Drink . 54
Masafi .. 54
Mass Grocery Retail . 55
Carrefour MAF 55
EMKE Group (Lulu ) ... 56
BMI Methodology ... 58
Risk/Reward Ratings Methodology .. 58
Table: Rewards 58
Table: Risks . 59
Weighting .. 59
Table: Weighting . 59
BMI Food & Drink Industry Glossary ... 60
Food & Drink ... 60
Mass Grocery Retail . 60
BMI Food & Drink Forecasting & Sourcing . 62
How We Generate Our Industry Forecasts ... 62
Sourcing ... 63