2012-09-09 03:50:18 - New Food research report from Business Monitor International is now available from Fast Market Research

Our outlook on Kuwait's consumer sector and food and drink industry remains optimistic, in line with our outlook on the country's economy. Kuwait's economic outlook remains broadly positive, and we expect the economy to continue growing relatively robustly over the coming years. Barring a sustained downturn in global oil prices, fiscal policy will continue to support growth by bolstering household incomes, as well as government consumption, while loose monetary policy will lead to a pickup in commercial bank lending. At the same time, our Oil & Gas team is not expecting to see any significant cutbacks in oil production in the near term. That said, political gridlock is likely to weigh on capital spending for the foreseeable future, leaving economic

growth below potential and bringing longer-term questions over the sustainability of the country's economic model closer into view.


Full Report Details at
- www.fastmr.com/prod/456350_kuwait_food_drink_report_q4_2012.aspx


We have retained our forecast for real GDP growth of 4.5% and 3.7% in 2012 and 2013 respectively. Strong household consumption growth is the primary factor behind the country's bright near-term prospects, and we forecast growth of 7.0% and 4.5% in 2012 and 2013 respectively (compared with an estimated 8.0% in 2011). This surge in spending is almost wholly government-driven, with household incomes having been boosted by a series of increased social benefits and public sector wage hikes, which are particularly important given that government employees constitute the vast majority of the native workforce. Yet, despite increased fiscal spending, inflation has been kept under control by an extensive system of state subsidies on energy, food and education.

Headline Industry Data (local currency)

* 2012 food consumption growth = 4.4%; forecast to 2016 = 23.0%
* 2012 per capita food consumption growth = 0.43%; forecast to 2016 = 8.0%
* 2012 bottled water value sales growth = 9.8%; forecast to 2016 = 70.0%
* 2012 supermarket sales growth = 6.3%; forecast to 2016 = 36.4%

Key Industry Trends

Cafe Culture Attracts Investment: In July 2010 it was reported that the Brooklyn, NY-based cafe Tea Lounge has signed a franchise deal with Kuwaiti businessman named Mohammed al Arbash who plans to open the first international branch in a Kuwait City shopping mall in November 2012. Arbash said that he was drawn to Tea Lounge for its unique concept and wide variety of drinks, and that he plans on eventually expanding the concept throughout the region.

Good Growth Expected In Premium Water: In July 2012 it was announced that the 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 non-alcoholic drinks company that specializes in high-end mineral water. Tamani will represent Gize in Kuwait, Bahrain, Saudi Arabia, the UAE, 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 recognised part of menus in luxury venues across the region.

Key Risks To Outlook

Few Risks: The primary downside risk emanates from the possibility that the government will scale back oil production as part of an OPEC-driven effort to keep prices supported (Brent crude dropped below US$90/bbl at one point in June, from more than US$125/bbl in March). We stress that such a move would not have a major impact on the domestic economy given that the government is already running a substantial fiscal surplus and would be unlikely to cut back spending as well. Nevertheless, we see growth continuing to moderate over the medium term as the impact of the significant fiscal expansion seen over the past year begins to fade and weak capital investment weighs on the private sector.

About Business Monitor International

Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at www.fastmr.com/catalog/publishers.aspx?pubid=1010

About Fast Market Research

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