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New market study, "Saudi Arabia Food & Drink Report Q1 2014", has been published

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2013-12-29 19:48:35 - New Food market report from Business Monitor International: "Saudi Arabia Food & Drink Report Q1 2014"

We retain a bullish view on Saudi Arabia's private consumption outlook and forecast growth of 6.0% in 2013 (revised up from 5.0%) and 5.0% in 2014. As we have noted in the past, the outlook for the retail sector is set to remain bright over the medium term, with sales benefiting from rising disposable incomes, favourable demographics and increasing urbanisation.

Headline Industry Data

* 2014 food consumption growth in local currency = +8.0%; compound annual growth rate (CAGR) 2013 to 2017 = +7.8%
* 2014 confectionery value sales growth in local currency = +6.9%; CAGR to 2017 = +6.7%
* 2014 mass grocery retail sales growth in local currency = +10.3%; CAGR to 2017 = +9.9%

Key Company Trends

Poultry Sector Profitability Improvement

In Sight: We expect Saudi Arabia's poultry production to grow for the second consecutive year in 2013/14 after the large-scale outbreak of disease in 2011/12 led to a decline in output that year. We forecast production to reach a record high 660,000 tonnes, up 15.8% year-on-year (y-o-y), driven by investment in production capacity and support from the government.

Full Report Details at
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Room For Growth Across Soft Drinks: As the region's largest economy by some distance, it is no surprise that Saudi Arabia's soft drinks industry is also the Gulf region's largest in volume terms. By volume, we believe that it accounts for about two-thirds of the region's soft drinks sector. In per capita terms, consumption of soft drinks, which by our definition includes bottled water, carbonates, juices and functional drinks (energy drinks), increased from 217 litres in 2004 to nearly 253 litres in 2012. In value terms, the size of the industry grew from US$5.5bn to US$8.5bn over the period, with bottled water and carbonates between them making up about 80% of sales.

MGR Sector: Potential Regional Outperformer? Saudi Arabia's consumer outlook remains an attractive prospect to mass grocery retailers looking to capture impressive Middle Eastern growth. Given the country's large population and enviable economic profile, increased formalisation of the sector is a trend we expect to gain momentum as both domestic and international investors target the increasing spending power of the Saudi consumer.

Risks To Outlook

The government's recent intensification of workforce nationalisation efforts (under a programme known as 'Saudisation') poses a downside risk to the economic outlook. We expect heightened 'Saudisation' measures to add to the costs for the private sector over the medium term, leading to an increase in project delays and a more difficult business environment overall.

A sharper-than-expected downturn in the global economy, if it was to translate into a substantial decline in oil prices, would pose significant downside risks to our forecasts for Saudi Arabia's fiscal and current account position, though it remains highly unlikely that either account will fall into the red in the near term.

We expect inflation to remain relatively subdued in 2014, albeit reaching high levels relative to the rest of the region. However, we highlight that a prolonged period of robust growth, coupled with loose fiscal and monetary policy, poses a medium-term inflation risk, and could begin to spur more rapid price rises in the coming years.

Partial Table of Contents:

BMI Industry View
- Food
- Drink
- Mass Grocery Retail
Industry Forecast
- Consumer Outlook
- Food
- Food Consumption
- Table: Food Consumption Indicators - Historical Data & Forecasts, 2010-2017
- Confectionery
- Table: Confectionery Value/Volume Sales - Historical Data & Forecasts, 2010-2017
- Drink
- Soft Drinks And Bottled Water
- Table: Soft Drinks Value/Volume Sales - Historical Data & Forecasts, 2010-2017
- Alcoholic Drinks
- Hot Drinks
- Table: Hot Drinks Value/Volume Sales - Historical Data & Forecasts, 2010-2017
- Mass Grocery Retail
- Table: Mass Grocery Retail Sales - Historical Data & Forecasts, 2010-2017
- Table: Retail Sales By Format
- Trade
- Table: Food, Drink & Tobacco Trade Indicators - Historical Data & Forecasts, 2010-2017
Macroeconomic Forecast
- Table: Saudi Arabia - Economic Activity
Industry Risk Reward Ratings
- Middle East and North Africa Risk/Reward Ratings
- Table: Middle East & North Africa Food & Drink Risk/Reward Ratings Q114
- Table: Middle East & North Africa Food & Drink Risk/Reward Sub-Factor Ratings Q114 (scores out of 10)
- Saudi Arabia Risk/Reward Ratings
Market Overview
- Food
- Food Processing
- Dairy Processing
- Agriculture
- Halal
- Drink
- Soft Drinks
- Hot Drinks
- Alcoholic Drinks
- Mass Grocery Retail
Industry Trends And Developments
- Food
- Drink
- Mass Grocery Retail
Competitive Landscape
- Table: Key Players In Saudi Arabia's Food & Drink Sector
- Table: Key Players In Saudi Arabia's Mass Grocery Retail Sector
Company Profile
- Al Safi-Danone
- Saudi Dairy And Foodstuff Company (SADAFCO)
- Almarai
- Al Rabie Saudi Foods
- Aujan
- Al Azizia Panda (Savola Group)
- LuLu (EMKE Group)
- Carrefour MAF
Global Industry Overview
- Table: Food And Drink Core Views
Demographic Forecast
- Demographic Outlook
- Table: Saudi Arabia's Population By Age Group, 1990-2020 ('000)
- Table: Saudi Arabia's Population By Age Group, 1990-2020 (% of total)
- Table: Saudi Arabia's Key Population Ratios, 1990-2020
- Table: Saudi Arabia's Rural And Urban Population, 1990-2020
- Food & Drink

Full Table of Contents is available at:

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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

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