Qatar Food and Drink Report Q4 2012

We maintain our very positive outlook on Qatar’s consumer sector, as the Qatari economy will remain a regional outperformer for the foreseeable future, with strong growth in consumption and investment patterns expected over the coming years. With the official unemployment rate standing at less than 1%, per capita GDP among the highest in the world, and inflation in the low single digits, we have every reason to believe that consumer spending is likely to remain buoyant in the near term. An August YouGov/Bayt.com consumer confidence index ranked Qataris as the third most optimistic consumers in the Middle East and North Africa region on the question of their economic prospects, with 51% of respondents saying they expected the economy to be in a better state in a year’s time. We forecast impressive private consumption growth of 13.0% and 10.0% in 2012 and 2013, respectively.

We also expect government consumption to remain elevated, with two primary factors behind this spending: First, consumer staples such as food, energy, education and healthcare are heavily subsidised by the government. With household incomes on the rise, credit growth picking up rapidly, and the economy firing on all cylinders, inflationary pressure will inevitably increase over the coming years. Consequently, unless Doha is willing to allow consumer prices to rise (which is unlikely, given that such a move would prove politically unpalatable, and that the government has ample fiscal space), its subsidy bill will increase gradually over the coming years. At the same time, spending will also increase as the government continues to invest in the country’s healthcare, education and other social services infrastructure, as our forecasts see government consumption increasing by 15.0% and 12.0% in 2012 and 2013 respectively.

Headline Industry Data ?? 2012 food consumption growth = +6.0%; forecast to 2016 = +35.2%. ?? 2012 soft drinks value sales = +9.0%; forecast to 2016 = +51.9%. ?? 2012 mass grocery retail sales = +7.6%; forecast to 2016 = +45.9%. ?? 2012 supermarket sales = +2.9%; forecast to 2016 = +23.8%.

Key Industry Trends And Developments Investments in Premium Water: In July 2012 it was announced that Qatar-based Tamani Foodstuffs has entered into an agreement with Canadian luxury drink producer Gize to expand Gize’s presence in the Middle East region. Tamami Foodstuffs will be the new sales and distribution partner for the nonalcoholic drinks company that specializes in high-end mineral water. Tamani will represent Gize in Qatar Food & Drink Report Q4 2012 © Business Monitor International Ltd Page 6 Bahrain, Saudi Arabia, the UAE, Kuwait, Qatar, Oman and Yemen. A Gize representative has said that this partnership with Tamani will benefit Gize greatly as it will allow it to benefit from Tamani’s network and logistics in order to be present in luxury hotels and gourmet venues, and make the drink a recognized part of menus in luxury venues across the region.

Nestlé Makes Regional Investment: In June 2012 Swiss food and drink giant Nestlé announced plans to construct a new US$136.1mn production facility in Dubai. Nestlé has signed a partnership agreement with Dubai World Central (DWC) for a 175,000-square-metre plot, which will be used to manufacture nutrition, culinary and coffee products. Nestlé said it intends to use the strategic advantages offered by DWC to strengthen its presence in Middle Eastern markets. By boosting its regional manufacturing presence, Nestlé will be able to tailor an even greater proportion of its products to suit tastes and preferences across the MENA region. This will also allow for greater local sourcing, fresher product, and being the second production facility in Dubai, will create opportunities for synergies. Risks To Outlook

Oil Price Stability: Given the economy’s heavy reliance on the hydrocarbon sector, a pronounced global economic downturn – if it were to translate into a sustained drop-off in demand for oil and gas – could impact negatively on our forecasts for Qatar’s external account position, budget and growth outlook. That said, we highlight that the country’s US$100bn sovereign wealth fund – as well as its continuing ability to tap international debt markets – provides the economy with significant bulwarks against these risks.

Table of contents

Chapter 1 - BMI Industry View

Chapter 2 - SWOT Analysis

Qatar Food Industry SWOT

Qatar Drink Industry SWOT

Qatar Mass Grocery Retail Industry SWOT

Chapter 3 - Business Environment

BMI’s Core Global Industry Views

Table: Core Views

Middle East Food & Drink Risk/Reward Ratings

Table: MENA Risk/Reward Ratings Sub-Categories, Q (scores out of )

Table: MENA Food & Drink Risk/Reward Ratings, Q

Qatar Food & Drink Risk/Reward Ratings

Macroeconomic Outlook

Table: Economic Activity, -

Chapter 4 - Industry Forecast Scenario

Consumer Outlook

Food

Consumption

Table: Food Consumption Indicators – Historical Data & Forecasts, -

Drink

Soft Drinks

Table: Soft Drinks Value Sales – Historical & Forecast Sales Data, -

Hot Drinks

Mass Grocery Retail

Table: Mass Grocery Retail Sales – Historical Data & Forecasts, -

Table: Grocery Retail Sales By Format, %

Trade

Table: Trade Indicators – Historical Data & Forecasts, -

Chapter 5 - Food

Key Gulf Region Industry Trends

Premiumisation Key To Growth

Shift In Food Security Strategy

Technological Investments

Growing Popularity Of Eating Out

Snack Chains Growing In Popularity

Growing Investment Interest From Non-Regional MNCs

Market Overview

Food Production

Halal Food

Chapter 6 - Drink

Key Gulf Region Industry Trends

Coca-Cola Makes An Aggressive Investment

Bottled Water Sector Growing In Importance

Qatar Food & Drink Report Q

© Business Monitor International Ltd Page

Carbonate Prices Moving Up

Diversifying Away From Carbonates

Cutty Sark Pens Distribution Deal

Market Overview

Hot Drinks

Soft Drinks

Chapter 7 - Mass Grocery Retail

Key Gulf Region Industry Trends

Géant And Waitrose Pursuing Region-Wide Expansion

Frontier Market Investment

Growing Investment Into Modern Convenience Retailing

Multinational Presence Growing?

Market Overview

Table: Mass Grocery Retail Sales Value By Format (US$bn), -

Chapter 8 - Competitive Landscape

Table: Key Players In Qatar’s Food & Drink Sector

Table: Key Players In Qatar’s Mass Grocery Retail Sector

Chapter 9 - Company Monitor

Food

Unilever North Africa Middle East (NAME)

Hassad Foods

Drink

Masafi

Mass Grocery Retail

Carrefour MAF

EMKE Group (Lulu )

Chapter 10 - Demographic Outlook

Table: Qatar’s Population By Age Group, - (‘)

Table: Qatar’s Population By Age Group, - (% of total)

Table: Qatar’s Key Population Ratios, -

Table: Qatar’s Rural And Urban Population, -

Chapter 11 - Risk/Reward Ratings Methodology

Table: Rewards

Table: Risks

Weighting

Table: Weighting

Chapter 12 - BMI Food & Drink Industry Glossary

Food & Drink

Mass Grocery Retail

Chapter 13 - BMI Food & Drink Forecasting & Sourcing

How We Generate Our Industry Forecasts

Sourcing

Related research categories

By sector: General drinks

By market: Qatar (in Asia)