GCC markets-Middle East · 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

Growing the success of Irish food & horticulture

AIDAN COTTER

CHIEF EXECUTIVE

BORD BIA

28 JANUARY 2009


GCC markets-Middle East


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


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.


Exports to Middle East 2013

4%

74%

1%

20%

1%

Beef

Beverages

Dairy

Edible Hort

Pigmeat

Poultry

Prepared Foods

Seafoods

Sheepmeat

Source: CSO

€320m


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


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


GCC Member Population % Increase, 2000-2010

0

50

100

150

200

250

Bahrain Kuwait Oman Qatar Saudi Arabia United Arab Emirates

Source UN


GCC Age Profile 2010

26%

54%

18%

2% 0%

Source: UN

0-4yrs

15-39yrs

40-64yrs

65-79yrs

80+yrs


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


Food Security

Food security is a Strategic Concern

Population Growth

Changing Dietary Habits

Economic Growth

Increased Demand for

Food

Environment Unsuitable for Food

Production


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.


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%)


The Kingdom of Saudi Arabia


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


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


Macroeconomics


Macroeconomics


KSA Population

Source: CIA Factbook 2013


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


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.


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


Hypermarkets and Superstore Leaders


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


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


2011 2012 2013

Net sales (SR million) € 1,120 € 1,134 € 1,131



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


2011 2012 2013

Net sales (SR million) € 906 € 848 € 885



Farm

Strongest Eastern Province.

Plans to aggressively expand geographically.

Superstores MiniMarkets #Riyadh #Dammam #Jeddah

47 17 0 11 6


2011 2012 2013

Net sales Euro € 246 € 380 502



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


2011 2012 2013

Net sales Euro € 578 € 647 € 647



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

http://www.sfda.gov.sa/en


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


The United Arab Emirates (UAE)

High population of

expatriates

Islam 96%

Work Sunday to

Thursday

Capital city is Abu Dhabi


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


Economic Indicators

2013 (EUR)


GDP 293,767,280,188






Macroeconomics


Macroeconomics


Demographics

Source: CIA Factbook 2013


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


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


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


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


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


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


Abu Dhabi Coop

Founded 1981

60,000 customers every single day

Aggressive expansion plans

Hypermarkets Supermarkets

3 6


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


2 7


Choithrams

Choithrams operates a distribution business, and

has stores in Oman, Bahrain and Qatar.

Tesco PL

Asian expats


11 24


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


Kuwait Economic Indicators

2013 (EUR)


GDP 137,436,409,348






Macroeconomics


Macroeconomics



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


Oman Economic Indicators

2013 (EUR)


GDP 61,817,727,511


GDP % nominal growth 1.25




Macroeconomics


Macroeconomics



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


Bahrain Economic Indicators

2013 (EUR)


GDP 21,468,816,692






Macroeconomics


Macroeconomics



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


Qatar Economic Indicators

2013 (EUR)


GDP 150,872,219,544






Macroeconomics


Macroeconomics



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


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


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


Buyer Targets for Marketplace 2015

8 Dairy

4 Seafood

4 meat

7 (frozen, bakery, confectionery & snacks)

Primary focus on KSA & UAE


AIDAN COTTER

CHIEF EXECUTIVE

BORD BIA

28 JANUARY 2009


Questions

Thank you

Documents

GCC markets-Middle East · 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