Abstract
Kuwait has fallen back into sixth place in BMI’s regional Food & Drink
Business Environment Ratings
table for Q309. Although a decline in crude
oil prices and private investment forced through by the global
financial
meltdown will press down on Kuwait’s economic outlook, extensive
government infrastructure
spending will provide a degree of cushion. BMI
has forecast GDP to contract by 1% in 2009, which is
better than our
global average (we are currently forecasting global output to slide by 2.3% in
2009) in
these turbulent times. Despite a weakened near term economic
outlook, the country remains one of the
Gulf region’s wealthiest and
is home to a fairly dynamic food processing industry as discussed in
BMI’s
recently published Kuwait Food & Drink Report for Q309.
Kuwait Food Company (Americana) is the country’s leading food company
with assets across the food
services industry as well as food and drink
production. The company boasts an extensive production
portfolio that
includes popular food brands such as Heinz and California Garden. Therefore,
it is
particularly well placed to capitalise on rising demand for
convenience and packaged foods.
Like most countries in the Gulf region,
Kuwait possesses a reasonably well developed dairy sector.
Spearheaded by
Kuwait Danish Dairy and closely followed by Kuwait Dairy Corporation, the
industry
is one of the country’s most well invested. Both companies
have vertically integrated product portfolio’s
(including fresh
milk, yoghurt and ice creams) yet their ability to grow into dominant regional
players is
hamstrung by the competitiveness of the Gulf region’s
dairy industry.
BMI analyses that the halal food industry may not only
attract further regional investment (UAE-based
Al Islami Foods entered
Kuwait in April 2009 after securing a distributional tie ups with Gulf
Trading
and Refrigeration Company (GTRC) and International Agencies
Company (IAC)), but also provide
growth opportunities for Kuwaiti
companies. The World Halal Forum expects the value of the halal food
industry to grow to US$650mn in 2010 and Gulf-based companies are scrambling
to jump on to the
bandwagon of an industry that has thus far been
dominated by non-regional food processors.
Through to 2013, BMI has
forecast food consumption to increase by 4.8% and reach US$1.32bn while
per capita consumption is expected to crawl up to US$390. Although the
forecasted growth figures are by
no means dynamic, regional investors in
particular are likely to remain interested in the high-income
Kuwaiti
consumer base as they diversify their businesses in search of greater
volume.
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