Horeca-report of Ksa

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2011HORECA

KSAwww.saudihoreca.com

[email protected]

Saudi Food, Beverages

and Hospitality MarketAnalysisSigns of stabilization & recoverywith high levels of investor interestand activity.


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www.saudihoreca.com

2011HORECA

KSAwww.saudihoreca.com


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SAUDI HORECA 2011RiyadhInternationalConvention&ExhibitionCenter 0202 SAUDI HORECA 2011RiyadhInternationalConvention&ExhibitionCenter

01

Consumers

The size of the population ensures that the market makes a distinction among the gulf regionmarkets which portend especially well on long-term carry in household expenditure growth.While income increases, there will be more spending on fast-moving consumer goods(FMCGs), that will boost per capita food consumption & mass grocery retail sales. In addition,the increases of income demand for high-value luxury goods as Saudi consumers are verybrand conscious.

Industry Data Highlight2010 per capita food consumption = +1.48%; forecast to 2015 = +52.94%2010 soft drink value sales = +2.03%; forecast to 2015 = +41.12%2010 mass grocery retail sales = +6.77%; forecast to 2015 = +82.7%

Remarkable Notes in Saudi Food Industry

Appealing market for investors due to size of youthful population being over 25 millionprogressively more attracted to western trends, therefore the long-term volume growth isvery promising.Towering consumption of high-value packaged and processed foods on account of the enor-mous expatriate population existence in Saudi Arabia.Saudi Arabia is the largest dairy industry.Comparing to neighboring countries, Saudi Arabia gives a lower cost export base for the fact

that the country is a member of the Gulf Co-operation Council (GCC).As the Saudi lifestyles becomes busier along with tastes and preferences development, thedemand for processed and packaged goods is meant to carry on more increasingly in the Saudi market.

Organic foods are progressively increasing.Health awareness has notably increased opportunities for companies that are able toproduce healthy & light food.

Remarkable Notes in Saudi Drink Industry

Soft drink consumption per capita is high, mainly for carbonate, bottled water and fruit juice.Though Saudi consumers are increasingly brand loyal yet they are interested in new andoriginal products.Saudi consumption for tea and coffee is very high as they consider both as part of tradition

and daily lifestyle.

A positive forecast is expecting the soft drinks industry to register promising value andvolume sales growth.Concerning production innovation the alternative teas, such as herbal and fruit tea, aretaking a place in the popularity products in Saudi Arabia, indicating indeed a strong growthopportunities for original and new products.

2015f

2014f

2013f

2012f

2011f

2010f

2009f

2008

2006

2005

2004

2007

0

20.000

40.000

60.000

80.000

100.000

120.000

140.000

ComingFromALower Base

GulfRegionPer CapitaGDP(US$)-2004-2005

Source:UNCTAD

UnitedArabEmirates

BahrainKuwait

OmanQatar

SaudiArabia


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000

1000

2005

2006

2007

2008

2009e

2011f

2012f

2013f

2014f

2015f

2000

3000

4000

5000

6000

7000

8000

02040608101214161820

2010f

FoodConsumption2005-2015

Percapitafood consumption(SAR)(LHS)Percapitafood consumptiongrowth(y-o-y)(RHS)

e/f=BMIestimate/forecast;na=not available/applicable.source:MinisrtyofEconomyandplanning, CentralDepartmentofStatisties,SaudiArabianMonetaryAgency,CompanyInformation,TradePress,BMI


03

Detailed Analysis for Food

Food Data Highlights

Headline food consumption forecast annual growth to 2015: 8.09%Per capita forecast food consumption annual growth to 2015: 5.91%

Keynotes Factors for New Market

25% of total private consumption in Saudi Arabia consisting of food expenditure.Motivated by the predictable economic and population growth, significant investment into

food processing particularly main segments such as dairy, is anticipated to grow by 2015, inUS$ terms, per capita food consumption to grow past US$2,000.Saudi Arabia is the only market in the gulf region which can pragmatically and realisticallypresents investors with long-term volume growth potential especially with an expectedgrowth of population to reach 28 million by 2015.The food market is much less contingent on catching the attention of expatriates to upholdthe consumer base, comparing to UAE market where 80% of population is consisted of expa-triates, therefore the Saudi market carry less down risks to the population and headline foodconsumption growth figures.

Permeation of expansion of organized retail channels will also contribute to food consump-tion growth over the long term.Increased in organized retailing will carry on to reinforce internal trade systems, which willput in to lower expenditure & cost savings that can be passed on to consumers.

Table: Food Consumption Indicators 2006- 2015

2006 2007 2008 2009e 2010f 2011f 2012f 2013f 2014f 2015f

23.38 28.30 31.03 36.17 37.67 41.10 44.53 48.09 52.58 57.62

87.54 106.00 116.21 135.44 141.09 159.94 166.75 180.09 196.90 215.79

987.2 1,171.7 1,259.1 1,142.5 1,449.6 1,550.1 1,646.4 1,744.3 1,871.7 2,0140.0

3.697 4.388 4.715 5.350 5.429 5.805 6.166 6.533 7.010 7,542

7.03 21.9 9.64 16.55 4.17 9.10 8.32 8.00 9.33 9.59

4.50 18.69 7.46 13.45 1.48 6.93 6.21 5.95 7.30 7.60

6.55 7.35 6.52 9.78 8.17 8.36 8.33 8.44 8.67

Food Consumption (US$bn)

Food Consumption (SARbn)

Per Capita Food Consumption (US$)

Per Capita Food Consumption (SAR)

Total Food Consumption Growth(y-o-y)

Per Capita Food Consumption Growth (y-o-y)

Food Consumption as % GDP

e/f=BMI estimate/forecast;na= notavailable/applicable.Source:MinistryofEconomyandPlanning,Central DepartmentofStatistics,SaudiArabianMonetaryAgency,CompanyInformation,TradePress,BMI


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05

Confectionery

Food Data Highlights

Confectionery annual value sales growth to 2015: 1.11%

Notes on Confectionery in Saudi Arabia

The forecast until 2015 will remain being largely driven by premiumisation momentum with astrong opportunities to producers able to place products to capture upside provided bypremiumisation.

The growth is expected to be spread across the sugar confectionery, chocolate and gumsegments. Putting in mind that Saudi consumers are somewhat sensitive toward prices. There-fore, products at the low end of the price range are probable to remain mostly popular. Detailed Analysis for Drink (Soft Drink)

Drink Data Highlights

Headline soft drinks value sales forecast annual growth to 2015: 6.28%Carbonates value sales forecast annual growth to 2015: 2.04%Bottled water value sales forecast annual growth to 2015: 5.77%Fruit juice value sales forecast annual growth to 2015: 11.08%

Keynotes Factors for Drink in Saudi Arabia

The drink industry will carry on a strong growth and will increase over the forecast period to

2015. The growth is out of the following causes:

Table: Confectionery Sales- Historical Data & Forecasts, 2006- 2015

2006 2007 2008 2009e 2010f 2011f 2012f 2013f 2014f 2015f

33.79 34.38 34.63 34.63 34.76 35.09 35.51 36.00 36.48 37.00

87.54 106.00 116.21 135.44 141.09 159.94 166.75 180.09 196.90 1.42

987.2 1,171.7 1,259.1 1,142.5 1,449.6 1,550.1 1,646.4 1,744.3 1,871.7 300.5

Confectionery Sales (SARmn)

Confectionery Sales Growth, SAR (y-o-y)

Confectionery Sales (US$mn)

e/f=BMI estimate/forecast;na= notavailable/applicable.Source:MinistryofEconomyandPlanning,CentralDepartmentof Statistics,SaudiArabianMonetaryAgency,CompanyInformation,TradePress,BMI

0.00

5

2005

2006

2007

2008

2009e

2011f

2012f

2013f

2014f

2015f

10

15

20

25

30

35

40

0.20.40.60.81..01..2141.61.82.0

2010f

ConfectionerySales2005-2015

ConfectionerySales(SARmn)(LHS)ConfectionerySalesgrowth,SAR,(y-o-y)

e/f=BMIestimate/forecast;na =notavailable/applicable.source:MinisrtyofEconomyandplanning,CentralDepartmentofStatisties,SaudiArabianMonetaryAgency,CompanyInformation,TradePress,BMI


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Table: Soft Drink Sales- Historical Data & Forecasts, 2006- 2015

2006 2007 2008 2009e 2010f 2011f 2012f 2014f 2015f

2.483 2.533 2.583 2.593 2.626 2.672 2.728 2.859 2.927

2.895 3.040 3.192 3.243 3.296 3.480 3.714 4.260 4.535

2.389 2.628 2.891 3.016 3.119 3.494 3.970 5.523 5.647

1.013 1.023 1.033 1.036 1.042 1.053 1.066 1.096 1.112

271.4 294.0 318.4 324.4 336.5 358.3 386.1 451.2 483.8

9.051 9.517 10.017 10.213 10.420 11.057 11.863 13.751 14.705

5.04 5.15 5.25 1.95 2.03 6.11 7.29 7.45

663.0 676.3 689.8 692.5 701.2 713.4 728.3 763.3 781.5

6.93

773 812 852 866 880 929 992 1.137 1.211

638 702 772 805 833 933 1.060 1.358 1.508

270.4 273.1 275.8 276.7 278.3 281.0 284.6 292.8 296.8

72.5 78.5 85.0 86.6 89.9 95.7 103.1 120.5 129.2

2.417 2.541 2.675 2.727 2.782 2.952 3.168 3.672 3.927

137.2102.1 105.2 108.5 107.7 107.1 111.3 117.1

2013f

2.792

3.984

4.523

1.081

418.4

12.798

7.88

745.5

1.064

1.208

288.7

111.7

3.417

124.0 130.7

Carbonated Drink Sales (SARmn)

Bottled Water Sales (SARmn)

Juice Sales (SARmn)

Laban Sales (SARmn)

Energy Drink Sales (SARmn)

Soft Drink Sales (SARmn)

Total Soft Drink Sales Growth, SAR, (y-o-y)

Carbonated Drink Sales (US$mn)

Bottled Water Sales (US$mn)

Juice Sales (US$mn)

Laban Sales (US$mn)

Energy Drink Sales (US$mn)

Soft Drinks Sales (US$mn)

Per Capita Soft Drink Spend (US$)

e/f=BMI estimate/forecast;na= notavailable/applicable.Source:MinistryofEconomyandPlanning,Central DepartmentofStatistics,SaudiArabianMonetaryAgency,CompanyInformation,TradePress,BMI


07

o Alcoholic drinks industry absence.oHarsh climate in Saudi Arabia.o Size of population which make up approximately two thirds of the Gulf's population

Saudi Arabia soft drink industry is the largest by volume and value comparing to the region's industry.The consumers as we mentioned are brand-loyal and are always interested in new and origi-nal products, which is a very essential factor in the drink industry.The flavored, bottled water with an emphasis on the size of bottles, are taking a great place

in the industry due to the lack of adequate drinkable water thus, it will carry on stronggrowth over the forecast period.Off-trade sales of soft drink through retail channels account for 80% of total volume sales,

with supermarket and hypermarkets accounting for approximately 36% of soft drink sales,while independent food stores accounted for around 22%.

0

2005

2006

2007

2008

2009e

2011f

2012f

2013f

2014f

2015f

1000

2000

3000

4000

5000

6000

2010f

SoftDrinkSales2005-2015

Carbonateddrinksales(SARmn)

Bottledwatersales(SARmn)Juicesales(SARmn)

e/f=BMIestimate/forecast;na=not available/applicable.source:MinisrtyofEconomyandplanning,CentralDepartmentofStatisties,SaudiArabianMonetaryAgency,CompanyInformation,TradePress,BMI


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Detailed Analysis for Drink (Hot Drink)

Drink Data Highlights

Coffee value sales forecast annual growth to 2015: 4.53%Tea value sales forecast annual growth to 2015:2.43%

Keynotes Factors for Drink in Saudi Arabia

Coffee Sales are anticipated to surpass tea sales in term of annual growth to 2015.

Constant on-trade strength, emphasized by the expanding prominence of westernstyled coffee shops.Growth in tea is anticipated to be mostly determined by product growth and the wider permea-tion of fruit teas playing an progressively more key role in motivating growth.

02 SAUDI HORECA 2011Riyadh International Convention & Exhibition Center09

0

2005

2006

2007

2008

2009e

2011f

2012f

2013f

2014f

2015f

200

400

600

800

1000

1200

2010f

Tea And Coffee Sales

2005-2015

Coffee sales (SARmn)

e/f =BMI estimate/forecast; na = not available/applicable.source: Minisrty of Economy and planning, CentralDepartment of Statisties, Saudi Arabian Monetary Agency, Company Information, Trade Press, BMI

Tea sales (SARmn)


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Horeca-report of Ksa

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