ASSUME YOU HAVE TO LAUNCH A BEVERAGE BRAND IN THE GULF REGION. WHAT INFORMATION DO YOU REQUIRE?

Introduction

Once a product is developed, effectively product launch becomes the critical step to its success. The Product Launch Process must address all the steps necessary to start volume production, plan and execute marketing activities, develop needed documentation, train sales and support personnel (internal and external), fill channels, and prepare to install and support the product.

Coming to the question….

We require analysis of the Gulf region, with respect to introducing a beverage brand. Here is what the statistics suggest:

Gulf Market for Food and Beverages

Total US$ 18 billion retail

Plus: $2.1 billion turnover in QSR/casual dining

Plus: $2.8 billion turnover in institutional catering

Growing 5% + annually

Split 80% food and 20% beverages

COMPETITION:

UAE: ALMasafi, Rani Juice and Al-Ain Mineral water (Capri Sun juice)

Bahrain: NADEC, Abuljadayel Beverages

Kuwait: Gulf Union Foods Company

Oman: NADA(Al-Othman), Arrow Juice Company

Saudi Arabia: Al Rabie Saudi Foods, National Factory for Food Production

Qatar: Arab Qatari Company

DEMOGRAPHICS:

Bahrain:

Population 0.71 M (66% local, 34% expat)

Major cities: Manama

GDP US$ 16.9 billion

GDP per capita US$ 23,827

Cons: small, internal tensions

Pros: relatively liberal, pro British

Qatar:

Population 0.93 M (33% local, 67% expat)

Major cities: Doha

GDP US$ 66 billion

GDP per capita US$ 72,562

Cons: small

Pros: very wealthy

Oman:

Population 2.48 M (80% local, 20% expat)

Major cities: Muscat

GDP US$ 41 billion

GDP per capita US$ 16,340

Cons: relatively poor

Pros: nice place, nice people

Kuwait:

Population 3.3 M (38% local, 62% expat)

Major cities: Kuwait City

GDP US$ 103 billion

GDP per capita US$ 34,341

Cons: Conservative

Pros: pro-American (and British)

United Arab Emirates:

Population 4.9 M (26% local, 74% expat)

Major cities: Abu Dhabi, Dubai

GDP US$ 190 billion

GDP per capita US$ 38,703

Cons: very competitive

Pros: very open, large expat population

Saudi Arabia:

Population 24.4 M (74% local, 26% expat)

Major cities: Riyadh, Jeddah, Dammam/Al

Khobar, Makkah, Madinah

GDP US$ 374 billion

GDP per capita US$ 13,567

Cons: Conservative, suspicious, capricious

Pros: big market, not as bad as it sounds

Market Entry

Check regulations:a) Import restrictions (halal/haram)b) Import restrictions (temporary)c) Labelling rules: Arabic required for KSA, not for UAE Expiry datesa) Research market:b) Trade visitsc) Research companies (retail audits, consumer, trade)d) Trade press (e.g. RNME, MEGrocer, AMEFT)

Market Entry – Other

Contract packing Manufacture under licence Establish a joint venture Greenfield investment

BEVERAGE CONSUMPTION:

1. Saudi Arabia : 65 %2. UAE : 18%

3. Kuwait : 7%

4. Oman : 6%

5. Bahrain : 2%

6. Qatar : 2%

CONCLUSION:

a) Majority of the companies located in Saudi Arabia have diversified themselves in terms of product range doing it from juices, nectars, floats, drinks, milk, laban, flavoured milk, fruit+milk, puddings, tomato paste etc thereby minimizing the operating costs.

b) In spite of price raise in commodities in the international trade in the previous year, these companies have survived well and some companies showed good growth in the fiscal ending 2008.

c) In the current year of 2009, the companies have set to take advantage of the price fall in the commodities, minimizing the inventory and thereby trying to become much more competitive. Even though only few companies have dared for new product launch this year, it need to be seen how far they do well in the market and how far do the Saudi customers accept them.