Kuwait has fallen back into sixth place in BMI’s regional Food &
Drink Business Environment Ratingstable for Q309. Although a decline in
crude oil prices and private investment forced through by the
globalfinancial meltdown will press down on Kuwait’s economic outlook,
extensive government infrastructurespending will provide a degree of
cushion. BMI has forecast GDP to contract by 1% in 2009, which isbetter
than our global average (we are currently forecasting global output to
slide by 2.3% in 2009) inthese turbulent times. Despite a weakened near
term economic outlook, the country remains one of theGulf region’s
wealthiest and is home to a fairly dynamic food processing industry as
discussed in BMI’srecently published Kuwait Food & Drink Report for
Q309.
Kuwait Food Company (Americana) is the country’s leading
food company with assets across the foodservices industry as well as
food and drink production. The company boasts an extensive
productionportfolio that includes popular food brands such as Heinz and
California Garden. Therefore, it isparticularly 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 industryis 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 ishamstrung 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-basedAl Islami Foods entered Kuwait in April
2009 after securing a distributional tie ups with Gulf Tradingand
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 foodindustry to grow to
US$650mn in 2010 and Gulf-based companies are scrambling to jump on to
thebandwagon 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 whileper
capita consumption is expected to crawl up to US$390. Although the
forecasted growth figures are byno means dynamic, regional investors in
particular are likely to remain interested in the high-incomeKuwaiti
consumer base as they diversify their businesses in search of greater
volume.
