Sopexa conference : Saudi arabia - Awakening the sleeping giant

WINNING IN THE SAUDI ARABIA FOOD & DRINK

MARKET

SOPEXA WEB CONFERENCE – 3rd of september 2015

Speaker : BASSEL SIBLINI – Managing Director – Sopexa Middle East – [email protected]

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mailto:[email protected]

© The information contained in this document is the property of Sopexa

Undoubtedly the largest in the Middle East, and not the least complex, the Saudi Arabian market still eludes the majority of food producers around the globe.

A lengthy import process, a fragmented trade scene, and the diverse retail & foodservice formats make this sea difficult to navigate.

It’s not all bad news though, for the Saudi is a voracious FOODIE, one that demands new culinary experiences everyday and that will get them.

Whether from you, or from someone else.

Awakening the Sleeping Giant

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THE HEADLINES

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Understanding Saudi Arabia p . 6

The food & Drinks Market p . 14

The trade landscape p . 16

The business of foodservice p . 17

The business of Retail p . 22

The Saudi Shopper p . 25

Their Digital & Social Entourage p . 30

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2

3

41 5

6

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1 THE LANDSCAPE UNDERSTANDING SAUDI ARABIA

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Holds two of Islam’s holiest sites in Mecca and Medina and is known as the “land of the two holy Mosques”, receiving close to 17M pilgrims in 2014.

Unified in 1932 under the rule of King Abdul-Aziz Ibn Saud,

The kingdom of Saudi Arabia has since become the main

player in the Middle East’s political scene.

Population 30M (30% expats)

Young, 51% under 25

GDP $27K (12th)

26th (ease of doing business)

Registered 4 % growth in 2014 Forecast to remain positive and reach 5% in 2020

Investing in the diversification of its economy, still very heavily reliant on oil.

The kingdom has announced $130b in

diversification projects while maintaining the focus on education.

Economy is anchored around 3 main Regions:

Riyadh, Jeddah and Damman – Khobar.


2 THE FOOD AND DRINKS MARKET EVALUATING ITS POTENTIAL

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$21b Food and drink market value in 2014

Growing steadily at 10% per annum

80% of that is imports

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$6.3b $5.4b $1.8b $1.2b

Main

Categories/

Imports

Source : GTIS- GTA - Analysis Sopexa


Other Categories in $M 889

661 665

131

9 52

258 338

27

178

100200300400500600700800900

1 000

9

Key

Exporting

countries $1.6b $1.5b $1b $.87b $.52b $.51b


3 THE TRADE LANDSCAPE IDENTIFYING THE RIGHT PARTNER

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Ways to import

1. Private labels

2. Agency Agreements

3. Consolidators

4. Direct to supermarket

Only products deemed “Halal” and excluding religious or outlawed

substances make it through.

Regulated by the SFDA.

Food & Beverage import tax varies between 0-5%

Listing fees ranging from $267 to $17,000 per SKU

A DOORWAY TO THE MARKET


Based in Riyadh, this exhibition registered 24,000 visitors and 350 exhibitors mixed between

agricultural and food products, like the name indicates.

Even if based in Dubai, remains the most attractive exhibition for Saudi buyers, with 4800

exhibitors and more than 86,000 professional visitors in 2015.

With the 2nd edition planned in 2015 in Riyadh, this remains a relatively small event and will need

time to prove itself.

Based in Jeddah, this event boasts 250 exhibitor, 5000 professional visitors and 350 pre-set

meetings.

3 Exhibitions Hosted in Saudi/ 2 in the UAE

Based in Abu Dhabi, the Sial ME 2014 attracted 818 exhibitors and 15,700 trade attendees

making the 2nd largest F&B exhibition in the region.


Importers (Registered Active)

Food products 189

Rice 70

Vegetables & Fruits

31

Meats & Seafoods

49


4 THE BUSINESS OF RETAIL WHERE THE FOODIES DWELL

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Market Split:

45% Wholesale (rural)

35% Modern

20% General

Number of Retail Outlets estimated at

41,000 And growing at 10%

“Even if on a downhill trend, wholesale still remains the principal market to tackle in Saudi Arabia.

But get listed is not easy, there are 3 ways:

- Have the best value/ High volume product

- Have the best selling product

- Buy your way in … “

A rising demand for Fine Foods

is translating into new High

end stores with Gourmet

offerings for Foodies.


KEY ACCOUNTS

50+ stores, a mix of Hypers/ supers

110+ stores, a mix of Hypers, supers/ convenience stores.

16+ stores, a mix of Hypers/ supers

VALUE Positioning

PREMIUM Positioning

(with a larger portfolio of imports and fine goods)

15+ stores, a mix of Hypers/ supers/ Gourmet

21+ stores, a mix of

Hypers, supers 20+ stores, a mix of Hypers/ supers.

“Prize competitions remain the best tested method to engage shoppers in Saudi Arabia, whether to launch a product or as a maintenance activity, a good prize will generate volumes.


THE IMPORTANCE OF RAMADAN IN RETAIL

• Ramadan Season last 2 months.

• Undoubtedly the best period of the year.

• Only products with “Ramadan” value propositions are allowed to communicate/ activate.

• Successful F&B players always tap into occasion.

• It can be done by creating a promotion or a special recipe in Ramadan colours.

• Media & activation prices are generally more expensive in Ramadan, but the ROI is still interesting.

• Saudis will appreciate and repay the effort done in understanding their values.

“Food & Drink volumes in Supermarkets Double

in Ramadan”

“80% of our Vimto* volumes are within the

Ramadan period”

* Vimto is a red fruits concentrate served with water and ice, owned by Saudi company Aujan, alongside other brands like Barbican and Rani. Coca Cola Co. bought 50% of Aujan in 2011 for $980M.


5 THE BUSINESS OF FOODSERVICE AN EXPLODING CHANNEL

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The current number of

licenced hotels is 1250 and the construction of 550 new is underway, 75 of them being 5 star hotels.

Recorded $17b in food revenue in 2014, the

market is rapidly growing following a surge in visitors

and evolving “dine out”

trends.

A new wave of Saudi Foodies with travel experience or a curious appetite are requesting new culinary experiences, experiences that are being fulfilled by new restaurants and hotels.

Abdelkarim Meraashly

Banquet Manager at Nayyara

“Our clientele is demanding and more adventurous everyday. Today, it is no longer surprising to receive banquet requests that mix French, Indian, Japanese and Italian cuisines. We deliver on those requests, with the finest, authentic, ingredients we can find. “ re requesting new culinary experiences, experiences that are being fulfilled by new restaurants and hotels.


6 THE SAUDI SHOPPER

A FOODIE AT HEART

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Man or woman, the Saudi Shopper is a price sensitive

buyer, that is willing to try new things, that is starting to

show interest in Healthy alternatives, that wants to see

new and exciting variants of the products he likes, that

might be sceptical at first, but when he buys… He buys

in bulk.

ATTITUDE & HABITS

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149 128

106

0

50

100

150

200

2k - 2.5k 2.5k - 3k 3k - 3.5k 3.5k to 4k More than

4k

Monthly Spending on Groceries (SAR)


“The best performance usually comes after the last prayer (after 9pm), that’s when traffic is at its peak and that’s when we make our best volumes. Night shopping is considered common practice and this is why we follow a 24h format.”

RICE . CHICKEN . PASTA . BREAD . MUTTON . BEEF . SEAFOODS .

MILK . YOGURT . EGGS . SPREAD CHEESES. GRAINS . FIZZY DRINKS . OILS . VEGGIES . FRUITS . CONFECTIONERIES . DESSERTS . DESSERT INGREDIENTS…

…Are the things you would traditionally find in a Saudi’s shopping cart.


In a country where internet penetration is 87%, Online media consumption trumps

offline media 1.5 times over.

55% of time spent on social networks and blogs

MEDIA CONSUMPTION TRENDS

Time spent Online (6.5 hpd) VS Offline (4.1 hpd)

50,000 posts

shared per

Minute


DIGITAL ECOSYSTEM

Used Car sales

SOCIAL

WEBSITES

FORUMS

FOOD RELATED TOP SITES


The Saudi consumer is exposed to media 80% of their

waking life, whether offline on outdoors, in store or on

TV, or online on social networks forums and blogs.

Food is one of the favourite pastimes (70% of Saudis are

overweight), the other one being malls and retail

stores, the only physical place where mixed gender social interaction might be “acceptable”.

PEN PORTRAIT


7 HOW TO WIN IN SAUDI ARABIA

AND WHAT WE CAN DO TO HELP YOU

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Trade They say the right partner will make or break you. Never has this been truer than in Saudi Arabia.

We can help you identify that perfect partner through a range of entry to market activities, tested and perfected for optimal ROI.


EXHIBITIONS

ORGANIZATION

& SETUP

PRE ENTRY

MARKET

STUDY

NETWORKING & PR EVENTS

Trade Activities

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B2B

MEETINGS

SETUP

DISPATCH AND

FULFILLMENT OF

SALES KIT

Shopper

Once in the market, you will need a

strong operational partner to promote your products in the retail space, while getting every bang for your buck.

Our supermarket experience allows us to work within the market specificities, to reach the Saudi foodies where it

counts, through an array of in-store activation ideas.


DESIGN, PRODUCTION AND IMPLEMENTATION

OF POSM

INSTORE

ACTIVATIONS

SAMPLING ACTIVITIES

AND CONSUMERS

POLLING

Shopper Activities

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PRIZE PROMOTIONS & CONSUMER

COMPETITIONS

Digital The path to purchase starts here.

Our Digital experts can help you devise online strategies using the best platforms to reach your target, influence their opinion, educate them on the product and engage them with your values.


COMMUNITY

MANAGEMENT &

CONTENT

CREATION

E-LISTENING

CAMPAIGNS DIGITAL

PRODUCTION

Digital Activations

Bloggers &

Influencers DIGITAL &

SOCIAL COMPETITIONS

Through the line The 360° approach.

A comprehensive process where after carefully crafting a contact strategy around our consumer, we mix online/ Offline tools for maximum impact.


QR CODE

COMPETITIONS

AND

PROMOTIONS

ON-PACK ACTIVATIONS WITH ONLINE

CONTENT

ONLINE ACTIVITIES LINKING TO

OFFLINE

Through the line Activities

Success Stories The projects that set us apart.

In this section, we proudly showcase some of our best work and draw insights on what worked really well.


The French Week

The purpose of this activity is drive awareness over the existing French products, induce trial and generate sales.

To satisfy our Saudi foodie’s curious palate, we organise, every year, a French food festival in Saudi Arabia supermarket chain.

This consists of high visibility instore activation, with heavy sampling and an online relay on the supermarkets website and social media channels.


Le Crunch

This campaign targets professionals as well as consumers, reiterating the superiority of French apples over their other counterparts.

Every year, we collaborate with Le Crunch, a consortium of french apples on a multi channel multi target campaign to bring awareness and drive sales.

The channels used are in-store and out of home, as well as the production of collaterals destined to professionals in the Fruits & vegetables industry.


Jules, Sabco’s Mascot

In a multi channel campaign, instore, online and on social media, we invited the audience to interact directly with Jules, learn about the brand values and win ipads.

With the directive to engage more with children, we created a campaign to bring forward Jules, Sabco’s mascot chicken.

The campaign was well received, especially online, where on average we registered 9k+ unique interactions in our facebook games.

Bassel SIBLINI Managing Director Sopexa Middle East

T : +971 4 439 17 22 Ext. 201 [email protected]

You have a project in mind in Saudi Arabia ?

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INTERNATIONAL COMMUNICATION & MARKETING AGENCY FOOD, DRINK, LIFESTYLE

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Marketing

Sopexa conference : Saudi arabia - Awakening the sleeping giant