BMI's Executive Summary

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The Kuwaiti food and drink industry continues to attract a number of Western food and drink companies, as discussed in BMI's recently published Kuwait Food & Drink Report for Q108, as consumer habits continue to shift towards more western patterns of consumptions. For example, in November 2007, American restaurant chain Pizza Inn announced its plans to open 20 new outlets in Kuwait , partnering with Raja Company, which will utilise the support services of United Food Company, Pizza 'Inn's master licensee for Saudi Arabia and Qatar. Such a major expansion plan reflects the growing demand for Western food and drink products throughout the Gulf states, and also that Kuwait is a popular entry point for companies looking to expand in the region.

Kuwait has attracted a large number of Western food and drink companies thanks to its attractive business environment and surging demand, as both the population and disposable incomes continue to grow. Kuwaiti consumers, with their high spending power, have increasingly Western tastes, making them keen to experiment with new foods and restaurants. Expats make up around 80% of the population, and the influxes of expatriate workers in Iraq coming over the border into Kuwait for time off and holidays also creates increased demand for food and drink products inside Kuwait, further stimulating the market. As with many other Gulf States, the Kuwaiti economy is dominated by oil, and has therefore been experiencing booming growth on the back of consistently high oil prices. The country's overriding political stability has been another major draw for foreign investors, particularly given the volatility of the Middle East region.

Another reflection of changing consumer preferences is the ice cream sub-sector, which is taking off in the region's high-income, high-growth markets, such as Kuwait, fuelled by rising disposable incomes and growing competition among key players. It is mostly international companies that are involved in the icecream sub-sector in the Middle East, for this is not a traditional food in the region, given its hot climate. However, in line with the economic growth that is spreading across the region, the demand for luxury foods such as ice cream is skyrocketing. Ben & Jerry's, Häagen-Dazs and Marble Slab are all wellestablished brands in the region and have continued expansion plans.

Of course a key driver behind this growth and assumption behind such expansion plans is the country's continued economic prosperity. We are forecasting real GDP to accelerate to 6.8% in 2008, on the back of strong net export growth, as the factors that have buoyed the Kuwaiti economy over the last few years – high oil prices, abundant liquidity, strong consumer confidence and overall political stability – look set to remain in place. Although the outlook is somewhat clouded by the prospect of a US slowdown and an unwelcome rise in inflationary pressures, but we remain confident in continued economic growth, and therefore, continued development in the country's food and drink industry

Contents

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New This Quarter…

Chapter 1: Retail

Regional Overview

Market Overview

Table: Structure of Kuwait's Mass Grocery Retail Market by Number of Outlets

Table: Structure of Kuwait's Mass Grocery Retail Market - Sales Value by Format

Company Developments

Industry Forecast Scenario

Table: Sales Value by Format in Kuwait's Mass Grocery Retail Sector - Historical Data & Forecasts (US$mn)

Economic Outlook

Hydrocarbons Output Will Continue To Expand

Table: Kuwait Macroeconomic Data & Forecasts

Chapter 2: Food & Drink

Regional Overview

Market Overview

Industry Developments

Company Developments

Industry Forecast Scenario

Table - Kuwait Food Consumption - Historial Data & Forecasts

Table - Kuwait Soft Drink Production – Historical Data & Forecasts

Table - Imports/Exports - Historical Data & Forecasts

Chapter 3: SWOT Analyses

Kuwait Food & Drink Industry SWOT

Kuwait Political SWOT

Kuwait Economic SWOT

Business Environment Industry SWOT

Chapter 4: Competitive Landscape

Key Players

Table: Key Players in Kuwait's Mass Grocery Retail Sector (2004)

Table: Key Players in Kuwait's Food & Drink Sector (2004)

Regional Company Case Studies

Carrefour’s Performance in the Middle East

British American Tobacco’s (BAT) performance in the Middle East and Africa

Company Analysis

United Beverages Company WLL

Kuwait Flour Mills & Bakeries Co

Americana (Kuwait Food Company)

Kuwait Dairy Corporation

Saudia Dairy and Foodstuffs Company (SADAFCO

Al Marai

PepsiCo

BMI Forecast Modelling

How we generate our industry forecasts

Retail Industry

Sources

Appendix A: Global Economic Assumptions

Introduction

United States

Table: Global Assumptions

Japan

Eurozone

Oil Price Assumptions

Competitive Landscape for Middle East & Africa Food & Drink Reports: Sample of  
Companies Ranked

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At-a-glance perspective on the strengths, weaknesses, opportunities and threats facing each market’s food & drink industry. BMI also provides similar economic and business environment studies. Company SWOTs (Strengths, Weaknesses, Opportunities, Threats) covering all leading food and drink companies operating in each market, including competitive intelligence on geographic presence and competitive positioning of multinationals against local companies; leading products, services and brands; sales and local market share; foreign direct investment, projects, partners and acquisition strategy. Illustration of the industry via rankings tables comparing revenues, number of outlets, number of employees and registration dates. BMI analyses each company’s performance, market position, strategy and investment potential.

Network of Middle Eastern & African Food Sources

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BMI's Middle Eastern & African Food Reports are based on an extensive network of multilateral organisations, government departments, food industry associations, chambers of commerce and company reports. Information sources include: