Despite improvements made over H209 (calendar), consumer confidence in Kuwait remains some way off its pre-downturn 2009 peak with discretion still carrying a marked influence on spending. Although government legislation continues to hamper the development of the organised mass grocery retail (MGR) industry with co-operatives playing a much more significant role compared to most of the Gulf region, our headline forecasts suggest promising upside to MGR sales to 2014. BMI estimates organised retail channels to currently account for about 48% of grocery sales with the informal sector continuing to play a dominant role. Introducing revised mass grocery retail forecasts this quarter that more appropriately reflect headline food consumption figures, BMI sees MGR sales growing at an annual average rate of 3.85% with the hypermarket and supermarket segments driving growth. Thus far unable to target potentially lucrative pockets of consumers located residentially owing to legislation that prohibits private retailers from setting up near homes, development of the supermarket and modern convenience store segments in particular have lagged similarly high income Gulf markets like the UAE and Qatar. A relaxation in the prohibitive geographical legislation would likely lead to BMI pushing up our headline MGR forecasts. The main MGR player by some distance remains Union of Consumer Cooperative Societies (UCCS), which accounts for a significant portion of grocery retail sales. Emphasising the fact that Kuwait's MGR industry has yet to come close to realising its potential, regional hypermarket leaders Carrefour MAF and EMKE-owned Lulu have invested only modestly given the country's income profile (GDP per capita of nearly US$35,000 in 2009) and fairly large population by regional standards (3.2mn). By 2019, BMI anticipates the proportional contribution of organised retail to consolidated grocery sales to appreciate to 70%. Consequently, much of the industry's growth will take place over the coming decade with any relaxation in legislation likely to prove a catalyst to greater investment from regional players.

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Kuwait Food and Drink Report Q3 2010
Published on May 2010
Report Summary
Despite improvements made over H209 (calendar), consumer confidence in Kuwait remains some way off its pre-downturn 2009 peak
with discretion still carrying a marked influence on spending. Although government legislation continues to hamper the development
of the organised mass grocery retail (MGR) industry with co-operatives playing a much more significant role compared to most of the
Gulf region, our headline forecasts suggest promising upside to MGR sales to 2014. BMI estimates organised retail channels to
currently account for about 48% of grocery sales with the informal sector continuing to play a dominant role.
Introducing revised mass grocery retail forecasts this quarter that more appropriately reflect headline food consumption figures, BMI
sees MGR sales growing at an annual average rate of 3.85% with the hypermarket and supermarket segments driving growth.
Thus far unable to target potentially lucrative pockets of consumers located residentially owing to legislation that prohibits private
retailers from setting up near homes, development of the supermarket and modern convenience store segments in particular have
lagged similarly high income Gulf markets like the UAE and Qatar. A relaxation in the prohibitive geographical legislation would likely
lead to BMI pushing up our headline MGR forecasts.
The main MGR player by some distance remains Union of Consumer Cooperative Societies (UCCS), which accounts for a significant
portion of grocery retail sales. Emphasising the fact that Kuwait's MGR industry has yet to come close to realising its potential,
regional hypermarket leaders Carrefour MAF and EMKE-owned Lulu have invested only modestly given the country's income profile
(GDP per capita of nearly US$35,000 in 2009) and fairly large population by regional standards (3.2mn).
By 2019, BMI anticipates the proportional contribution of organised retail to consolidated grocery sales to appreciate to 70%.
Consequently, much of the industry's growth will take place over the coming decade with any relaxation in legislation likely to prove a
catalyst to greater investment from regional players.
Table of Content
Executive Summary ......... 5
SWOT Analysis ....... 6
Food Industry SWOT .......... 6
Drink Industry SWOT ......... 7
Mass Grocery Retail SWOT 8
Business Environment .... 9
BMI's Core Global Industry Views ........... 9
Table: BMI's Core Views For The Food & Drink Industry . 10
Middle East Food & Drink Business Environment Ratings ...... 11
Middle East Food & Drink Business Environment Ratings ' Q3 2010 .. 13
Kuwait's Food & Drink Business Environment Rating ........ 13
Macroeconomic Outlook ........ 14
Kuwait ' Economic Activity ............... 16
Food ................ 17
Industry Forecast Scenario .... 17
Food Consumption ............ 17
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Food Consumption Indicators ' Historical Data & Forecasts .............. 18
Trade ............... 18
Food & Drink Trade Indicators ' Historical Data & Forecasts ............ 18
Industry Developments ........... 19
Market Overview .. 20
Agriculture ....... 20
Food Production ............... 20
Halal Food ....... 21
Table: Muslim Populations In Select Countries .. 22
Drink ............... 23
Industry Forecast Scenario .... 23
Soft Drinks ....... 23
Soft Drink Volume Sales ' Historical Data & Forecasts ..... 24
Industry Developments ........... 24
Market Overview .. 25
Soft Drinks ....... 25
Hot Drinks ....... 25
Alcoholic Drinks ............... 26
Mass Grocery Retail ....... 27
Industry Forecast Scenario .... 27
Mass Grocery Retail Sales Value by Format ' Historical Data & Forecasts 28
Grocery Retail Sales By Format - Historical Data and Forecasts ......... 28
Industry Developments ........... 29
Market Overview .. 30
Kuwait MGR Market Share (%) by Retailer ' 2010 estimate 30
Structure of Kuwait's Mass Grocery Retail Market by Number of Outlets ' estimates ... 31
Structure of Kuwait's Mass Grocery Retail Market ' Sales Value by Format (US$bn) .. 31
Structure of Kuwait's Mass Grocery Retail Market ' Sales Value by Format (KWTbn) . 32
Estimated value of sales per outlet 2009 ............. 32
Competitive Landscape . 33
Table: Key Players in Kuwait's Food & Drink Sector ......... 33
Table: Key Players in Kuwait's Mass Grocery Retail Sector 34
Company Profiles ........... 35
Food ................ 35
Americana (Kuwait Food Company) . 35
Kuwait Dairy Corporation 36
Kuwait Flour Mills and Bakeries Co . 36
Drink ................ 38
United Beverages Company WLL ...... 38
Mass Grocery Retail ......... 39
Union of Consumer Cooperative Societies (UCCS) ............. 39
The Sultan Center (TSC) ... 40
EMKE Group ... 41
Appendix ........ 42
Country Snapshot: Kuwait Demographic Data ........ 42
Section 1: Population ........ 42
Table: Demographic Indicators, 2005-2030 ....... 42
Table: Rural/Urban Breakdown, 2005-2030 ...... 43
Section 2: Education And Healthcare 43
Table: Education, 2002-2005 ............ 43
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Table: Vital Statistics, 2005-2030 ...... 43
Section 3: Labour Market And Spending Power . 44
Table: Employment Indicators, 1997-2006 ......... 44
Table: Consumer Expenditure, 2000-2012 ......... 44
BMI Methodology ........... 45
Food & Drink Business Environment Ratings ......... 45
Ratings Methodology ........ 45
Ratings Overview .............. 45
Ratings System . 45
Indicators ......... 45
Limits Of Potential Returns ................ 46
Risks To Realisation Of Potential Returns .......... 47
Weighting ......... 48
Weighting ......... 48
BMI Food & Drink Industry Glossary .... 49
Food & Drink .. 49
Mass Grocery Retail ......... 49
BMI Food & Drink Forecasting And Sources .......... 51
How We Generate Our Industry Forecasts ......... 51
Sources ............ 52
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