packaged food - saudi arabia

Packaged Food - Saudi Arabia

Euromonitor International : Country Market Insight

January 2010

Packaged food Saudi Arabia

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List of Contents and Tables

Executive Summary ................................................................................................................................................ 1 Saudi Packaged Food Is Still Performing Healthily ................................................................................................. 1 Saudi Economy Largely Unaffected by Global Financial Crisis .............................................................................. 1 Giant Domestic Suppliers Continue To Gain Share at the Expense of Multinational Companies and

Small Suppliers ......................................................................................................................................................... 1 Supermarkets/hypermarkets Lead Sales and Continue To Take Share From Independent Food

Stores ........................................................................................................................................................................ 1 Forecast Period To See Healthier Cagr Than That of the Review Period ................................................................ 1

Key Trends and Developments .............................................................................................................................. 1 Saudi Arabia’s Economy Set for Positive Growth in 2009........................................................................................ 1 2009 Sees Inflation Slow Down and Unit Prices Stabilise Or Increase Moderately Across Many

Categories................................................................................................................................................................. 2 Suppliers Show Persistent Activities in Terms of New Product Development, Advertising and

Promotion ................................................................................................................................................................. 3 Increased Market Fragmentation and Competition Favour Overall Sales ............................................................... 4 Socio-demographics and Distribution Patterns Continue To Influence Saudi Packaged Food................................ 5

Market Data ............................................................................................................................................................ 6 Table 1 Sales of Packaged Food by Sector: Volume 2004-2009.................................................... 6 Table 2 Sales of Packaged Food by Sector: Value 2004-2009 ....................................................... 7 Table 3 Sales of Packaged Food by Sector: % Volume Growth 2004-2009................................... 7 Table 4 Sales of Packaged Food by Sector: % Value Growth 2004-2009...................................... 8 Table 5 GBO Shares of Packaged Food 2004-2008 ....................................................................... 8 Table 6 NBO Shares of Packaged Food 2004-2008 ....................................................................... 9 Table 7 Brand Shares of Packaged Food 2005-2008.................................................................... 10 Table 8 Penetration of Private Label by Sector 2004-2008 .......................................................... 11 Table 9 Sales of Packaged Food by Distribution Format: % Analysis 2004-2009 ....................... 11 Table 10 Sales of Packaged Food by Sector and Distribution Format: % Analysis 2009............... 12 Table 11 Forecast Sales of Packaged Food by Sector: Volume 2009-2014.................................... 13 Table 12 Forecast Sales of Packaged Food by Sector: Value 2009-2014....................................... 14 Table 13 Forecast Sales of Packaged Food by Sector: % Volume Growth 2009-2014 .................. 15 Table 14 Forecast Sales of Packaged Food by Sector: % Value Growth 2009-2014...................... 15

Foodservice – Key Trends and Developments .................................................................................................... 16 Headlines ................................................................................................................................................................ 16 Trends ..................................................................................................................................................................... 16 Competitive Landscape........................................................................................................................................... 16 Prospects................................................................................................................................................................. 17 Sector Data ............................................................................................................................................................. 17

Table 15 Foodservice Sales of Packaged Food by Sector: Volume 2004-2009.............................. 17 Table 16 Foodservice Sales of Packaged Food by Sector: % Volume Growth 2004-

2009................................................................................................................................. 18 Table 17 Forecast Foodservice Sales of Packaged Food by Sector: Volume 2009-2014 ............... 19 Table 18 Forecast Foodservice Sales of Packaged Food by Sector: % Volume Growth

2009-2014........................................................................................................................ 19

Impulse and Indulgence Products – Key Trends and Developments................................................................ 20 Headlines ................................................................................................................................................................ 20 Trends ..................................................................................................................................................................... 20 Competitive Landscape........................................................................................................................................... 21 Prospects................................................................................................................................................................. 21


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Sector Data ............................................................................................................................................................. 22 Table 19 Sales of Impulse and Indulgence Products by Sector: Volume 2004-2009 ..................... 22 Table 20 Sales of Impulse and Indulgence Products by Sector: Value 2004-2009......................... 22 Table 21 Sales of Impulse and Indulgence Products by Sector: % Volume Growth

2004-2009........................................................................................................................ 23 Table 22 Sales of Impulse and Indulgence Products by Sector: % Value Growth 2004-

2009................................................................................................................................. 23 Table 23 Company Shares of Impulse and Indulgence Products 2004-2008.................................. 23 Table 24 Brand Shares of Impulse and Indulgence Products 2005-2008 ....................................... 24 Table 25 Forecast Sales of Impulse and Indulgence Products by Sector: Volume 2009-

2014................................................................................................................................. 25 Table 26 Forecast Sales of Impulse and Indulgence Products by Sector: Value 2009-

2014................................................................................................................................. 25 Table 27 Forecast Sales of Impulse and Indulgence Products by Sector: % Volume

Growth 2009-2014........................................................................................................... 25 Table 28 Forecast Sales of Impulse and Indulgence Products by Sector: % Value

Growth 2009-2014........................................................................................................... 26

Nutrition/staples – Key Trends and Developments ............................................................................................ 26 Headlines ................................................................................................................................................................ 26 Trends ..................................................................................................................................................................... 26 Competitive Landscape........................................................................................................................................... 27 Prospects................................................................................................................................................................. 28 Sector Data ............................................................................................................................................................. 28

Table 29 Sales of Nutrition/Staples by Sector: Volume 2004-2009 ............................................... 28 Table 30 Sales of Nutrition/Staples by Sector: Value 2004-2009................................................... 28 Table 31 Sales of Nutrition/Staples by Sector: % Volume Growth 2004-2009.............................. 29 Table 32 Sales of Nutrition/Staples by Sector: % Value Growth 2004-2009 ................................. 29 Table 33 Company Shares of Nutrition/Staples 2004-2008 ........................................................... 29 Table 34 Brand Shares of Nutrition/Staples 2005-2008 ................................................................. 30 Table 35 Forecast Sales of Nutrition/Staples by Sector: Volume 2009-2014................................. 31 Table 36 Forecast Sales of Nutrition/Staples by Sector: Value 2009-2014 .................................... 31 Table 37 Forecast Sales of Nutrition/Staples by Sector: % Volume Growth 2009-2014................ 32 Table 38 Forecast Sales of Nutrition/Staples by Sector: % Value Growth 2009-2014................... 32

Meal Solutions – Key Trends and Developments ............................................................................................... 32 Headlines ................................................................................................................................................................ 32 Trends ..................................................................................................................................................................... 33 Competitive Landscape........................................................................................................................................... 33 Prospects................................................................................................................................................................. 34 Sector Data ............................................................................................................................................................. 34

Table 39 Sales of Meal Solutions by Sector: Volume 2004-2009 .................................................. 34 Table 40 Sales of Meal Solutions by Sector: Value 2004-2009 ..................................................... 35 Table 41 Sales of Meal Solutions by Sector: % Volume Growth 2004-2009................................. 35 Table 42 Sales of Meal Solutions by Sector: % Value Growth 2004-2009 .................................... 35 Table 43 Company Shares of Meal Solutions 2004-2008 .............................................................. 36 Table 44 Brand Shares of Meal Solutions 2005-2008 .................................................................... 36 Table 45 Forecast Sales of Meal Solutions by Sector: Volume 2009-2014.................................... 37 Table 46 Forecast Sales of Meal Solutions by Sector: Value 2009-2014 ....................................... 37 Table 47 Forecast Sales of Meal Solutions by Sector: % Volume Growth 2009-2014 .................. 38 Table 48 Forecast Sales of Meal Solutions by Sector: % Value Growth 2009-2014...................... 38

Definitions.............................................................................................................................................................. 38 Summary 1 Research Sources............................................................................................................. 40


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PACKAGED FOOD IN SAUDI ARABIA

EXECUTIVE SUMMARY

Saudi Packaged Food Is Still Performing Healthily The Saudi packaged food market is still in good shape, with retail value sales registering a strong growth rate that outpaced the average growth rate of the review period. Although this was largely a result of inflation and rising unit prices during 2009, Saudi Arabia is still enjoying many growth factors that were favourable to the development of packaged food.

Saudi Economy Largely Unaffected by Global Financial Crisis Saudi Arabia was able to contend with the global financial crisis very successfully and its GDP and per capita income grew positively during the year, 2009 outperforming many neighbouring countries. This translated into the continual development of the retailing infrastructure, a declining rate of unemployment and, most importantly, supplier activities remaining very dynamic in terms of new product launches, advertising and promotions. These factors helped demand for many packaged food categories to remain very high and dynamic during the year.

Giant Domestic Suppliers Continue To Gain Share at the Expense of Multinational Companies and Small Suppliers A major trend that continued from 2008 was the strong gains achieved by giant domestic suppliers such as Almarai Co Ltd and Saudi Vegetable Oil & Ghee Co (SAVOLA) at the expense of some multinationals and many small suppliers. These operators were able to advance strongly through increasing production capacity and product variety, as well as the acquisition of small suppliers, as was the case with Almarai Co, the leading company in Saudi packaged food. Nonetheless, this did not affect the outstanding performances achieved by some multinational companies in their core areas of business, such as the GBOs Mars Inc in confectionery, Wyeth in baby food and Kellogg Co in breakfast cereals. Suppliers from neighbouring countries, such as IFFCO Group from UAE, were also able to perform well in many categories such as ice cream and oils and fats.

Supermarkets/hypermarkets Lead Sales and Continue To Take Share From Independent Food Stores Reflecting the trend seen over the review period, supermarkets/hypermarkets continued to lead and grow at the expense of independent small grocers, benefiting from the ability to compete in terms of shelf space, product and brand variety, pricing and promotions. The channel also benefited from outlet expansion by leading retailers such as Azizia Panda and Al Othaim, despite the global financial crisis. The main channel to be hit by this progress was independent small grocers. The strong development of this supermarkets/hypermarkets also limited sales through non-store retailers, sales of which remained insignificant in 2009.

Forecast Period To See Healthier Cagr Than That of the Review Period Euromonitor International predicts sales of packaged food in Saudi Arabia will record a healthier compound annual growth rate (CAGR) over the forecast period than that seen over the review period in constant value terms. Performance will be driven by the same growth factors impacting the marketplace during the second half of 2009, particularly the oil-led recovery in the Saudi economy and rising per capita income, ongoing advances in product development and increasing sophistication in retail and distribution networks.

KEY TRENDS AND DEVELOPMENTS

Saudi Arabia’s Economy Set for Positive Growth in 2009



Despite the global financial crisis that emerged during the latter part of 2008 and into 2009, the Saudi Arabian economy is set for positive growth during 2009. The country is the largest oil exporter in the world, accounting for more than 25% of total international oil reserves. The recovery in oil prices during the second half of the year boosted the country’s GDP to around SR2 billion, which represents a real rise of over 4% on 2008 (the most pessimistic forecasts suggest a modest rise of less than 2% in 2009). Per capita disposable income continued to advance during the year while unemployment remained relatively low, remaining below 6% in 2009; this was a marginal decline from the previous year. Current Impact The strong economy in the Kingdom, alongside rising disposable incomes, supported strong demand for packaged food as a whole. In 2009, the market grew by nearly 11% in current value terms to reach SR48 billion. This was even higher than the average growth rate demonstrated over the review period, with the stronger growth being largely a result of the high inflation rate demonstrated in 2009. The year saw no notable signs of decline in consumer demand across many leading categories, particularly in terms of nutrition/staples which saw strong growth, nor did it see a drop in suppliers’ activities in terms of new product launches, advertising and promotions. Outlook Saudi Arabia’s economy, which contended successfully with the global financial crisis, is expected to retain its strong momentum in the short term on the back of a healthy recovery in oil earnings. Saudi real GDP growth is forecast to reach an average of around 5% per annum over the forecast period and the Kingdom is still expected to record budget surpluses. This will lead to a further advance in Saudi per capita disposable income as well as a further decline in unemployment, the main goal of the country’s development plan for the forecast period. Future Impact Euromonitor International expects Saudi packaged food to exhibit a healthier CAGR than that of the review period, calculated at around 5% in constant value terms. This healthier performance will be largely backed by rising Saudi per capita disposable income, due mainly to the projected strong recovery in oil prices, accompanied by an appreciable increase in the employment rate, particularly among young Saudi males and females. Suppliers are projected to respond aggressively to growing demand for packaged food in this wealthy community and to show increased activity in terms of new product launches, focusing on consumer benefits such as health and wellness, as well as on advertising and in-store promotions.

2009 Sees Inflation Slow Down and Unit Prices Stabilise Or Increase Moderately Across Many Categories Unlike 2008, when unit prices soared to their highest levels, a major trend of 2009 was the relative stability or the moderate increase in unit prices across many categories, averaging around 6% for packaged food as a whole. Although previous estimates in the early months of 2009 suggested an inflation rate close to 10% for the year, the market registered an actual inflation rate close to 6%, according to officials from the Saudi Department of Statistics. Strong increases in unit price were seen in categories where the country is largely reliant on imported merchandise in the form of finished products or raw materials such as vegetable and seed oils in oils and fats, baked goods and baby food. Current Impact Thanks to the high per capita disposable incomes that most Saudis enjoy, the increase in unit prices had no notable impact on sales and demand for many packaged food products remained very high and dynamic, particularly in nutrition/staples categories such as dairy products, oils and fats, baked goods and dried processed food, namely rice. Suppliers also contributed to combating the effect of price increases through focusing on economy packs, multi-packs and in-store promotions offering consumers extra volume and attractive discounts. From the consumer side, the market also saw a shift in consumer preferences, particularly among lower-income groups, towards value-for-money products and lower-priced brands, for example. Outlook



The forecast period is projected to see unit prices show greater stability or a slight decline/increase across packaged food categories, with expected inflation rates between 2009 and 2014 set at around 5% per annum. Worldwide prices of basic food raw materials such as milk, wheat grains and vegetable and seed oils are rising more slowly. The government, suppliers and retailers will also jointly contribute to prevent any notable increase in unit prices, thus maintaining high demand for packaged food overall. Nonetheless, retail prices will not return to the old levels registered before the hike in inflation rates during 2008/2009. Future Impact The pricing factor will remain of limited importance in this market, given that the majority of Saudi Arabian consumers enjoy high per capita consumption and food prices in general in the Kingdom are relatively competitive and affordable comparing to many developed Western countries. However, projected moderate movements in unit prices will be a positive factor contributing to the maintenance of strong demand, even among groups on low incomes, both expatriates and local citizens. Suppliers and retailers will also be an important part of the equation and will largely contribute to preventing any significant impact on demand due to price fluctuations.

Suppliers Show Persistent Activities in Terms of New Product Development, Advertising and Promotion Despite the economic slowdown and ongoing recession found in the home countries of many of the multinationals operating in Saudi Arabia (such as Mars Inc, Kraft Foods Inc, Nestlé SA, Groupe Danone and Wyeth), 2009 saw persistent activity from these companies within the Kingdom, as it is recognised as offering strong potential. New product developments continued across many categories where these companies are active and their spending on advertising and promotions showed no significant decline during the year. Such activities were not exclusive to multinationals, with local suppliers such as Almarai Co Ltd appearing to be equally active in this sense. Health and wellness products and those with value-added features and of high quality were the main areas of focus as companies sought to cater to increased consumer awareness and the growing concerns surrounding the proportion of the population suffering from obesity and diabetes in the Kingdom. Current Impact Increased company activity was a key factor that contributed to the healthy performances seen in many categories in spite of the economic slowdown. Categories benefiting most from these activities included dairy products, confectionery, baked goods and oils and fats. These sectors featured a strong presence for leading multinational companies such as Nestlé SA, Mars Inc and Groupe Danone as well as giant locals companies such as Saudi Vegetable Oil & Ghee Co (SAVOLA) and Almarai Co Ltd. In 2009, bakery products and dairy products were the largest categories in packaged food, registering total sales of SR14 billion and over SR11 billion and exhibiting healthy growth rates of around 15% and 8% respectively in 2009 in current value terms. Health and wellness products and premium products were the most dynamic areas within these categories. Niches and emerging categories such as snack bars and ready meals were also important areas for company activity due to the low level of competition, which offers the opportunity for rapid development Outlook With a strong recovery projected for the economy and further increases in per capita disposable income, suppliers are expected to show increased and improved activity across all categories. Leading suppliers, both multinationals such as the GBOs Mars Inc, Nestlé SA and Groupe Danone and local operators such as Almarai Co Ltd, Halwani Bros Co and National Food Co (Americana) will lead these activities and will remain the most active in this arena. Saudi Arabia, however, will also continue to offer strong opportunities for newcomers wishing to enter this market of significant further potential. Innovation in terms of quality, taste and packaging, accompanied by appropriate advertising and promotional campaigns, particularly television advertising and in-store promotion through leading chained retailers, will be very important tools for success. Future Impact Projected supplier-driven trading up will be a major contributor to the strong value growth predicted across many categories, even within large and relatively mature categories such as dairy products and bakery products. This will also contribute to the expansion in per capita consumption in less mature categories such as



confectionery, ice cream, baby food, and oils and fats, as well as emerging ones such as ready meals, snack bars and meal replacement products. Overall, packaged food will exhibit a healthier CAGR than that of the review period, calculated at around 5% per annum in constant value terms. Dairy products and bakery products, the largest two categories in packaged food, will see the strongest concentration of these activities, with health and wellness and premiumisation remaining the key trends within these product areas.

Increased Market Fragmentation and Competition Favour Overall Sales Saudi packaged food is highly competitive and fragmented, featuring a strong and equal presence of both multinational suppliers such as Nestlé SA, Master Foods Middle East FZE and Groupe Danone, alongside domestic producers such as Almarai Co Ltd, Al Muhaidib Grains Co, Saudi Dairy & Foodstuff Co Ltd (SADAFCO) and Saudi Vegetable Oil & Ghee Co (SAVOLA). A major trend which continued into 2008 was the gains achieved by large well-established domestic suppliers such as Almarai, Al Muhaidib Grains and Saudi Vegetable Oil & Ghee Co, as well as rapidly growing manufacturers from neighbouring countries, particularly the UAE (such as those under the GBO IFFCO Group). Almarai Co Ltd was the largest and best performing company in 2008, ending the year with a 7% value share, up nearly one percentage point on the previous year. The company excelled in dairy products thanks to its expansion in terms of production capacity and product variety. The company also benefited from its recent acquisition of small local dairy producers and from the boycott on Danish products which affected major competitors such as Danya Foods Ltd (GBO Arla Foods Amba). Current Impact The competitive environment and share breakdown of Saudi packaged food was very favourable to the market overall. The strong and long-standing presence of multinationals contributed to the positive performance of the sectors/categories that they dominate. Some examples include Master Foods Middle East FZE in chocolate confectionery, PepsiCo Inc in sweet and savoury snacks, and Kellogg Co in breakfast cereals. Giant local suppliers such as Almarai, Saudi Vegetable Oil & Ghee Co (SAVOLA), National Food Co (Americana), Sunbulah Food & Fine Pastries Manufacturing Co Ltd and Halwani Bros Co also contributed to the strong development seen across many sectors such as dairy products, oils and fats, spreads and frozen processed food. These manufacturers brought to market the latest product and packaging trends in the food industry and offered consumers a variety of traditional and new products. Growing competition between multinationals and local suppliers proved to be healthy in packaged food and translated into greater spending on advertising, promotions and, most importantly, new product launches, even during the global economic downturn. Such activities were responsible for maintaining high value growth, both within mature sectors such as dairy products and bakery products, as well as in other important categories including confectionery and ice cream, alongside niches such as snack bars and ready meals. Outlook The forecast period is projected to see a continuation of the same trend with strong local suppliers as well as rapidly growing suppliers from the UAE projected to continue performing well and gaining share at the expense of multinational companies and small suppliers. These companies will excel in terms of production capacity, product variety, pricing and distribution. The acquisition of small and emerging suppliers will also be an important strategy expected to be followed by giant local producers such as Almarai Co Ltd and Saudi Vegetable Oil & Ghee Co (SAVOLA). Almarai Co is expected to maintain its position as the best performer within the Kingdom, benefiting largely from its expansion plans and the acquisitions unveiled by the company in 2009. Halwani Bros Co is also predicted to excel thanks to the large budget allocated to its future expansion plan which was revealed by the company following its shift to public limited company status in 2008. Future Impact Euromonitor International predicts that competition will be fierce and is likely to reach record levels over the forecast period. Despite the strong presence of giant local and multinational companies, the level of



fragmentation is projected to increase further in the future with many suppliers entering the market each year. This will force many suppliers to squeeze their margins and show increased activity in terms of new product developments, advertising and promotion. Multinationals and foreign suppliers are likely to respond aggressively to the growing threats from local suppliers and suppliers from neighbouring countries. One of the most successful strategies adopted in the past and likely to be utilised by multinationals over the forecast period, is switching to local or regional manufacturing rather than relying on imports, in a step to increase local consumer loyalty and lessen the impact of increasing costs. An example of this is the anticipated strong entry of Kraft Jacobs Suchard Ltd following its establishment of a regional subsidiary in Bahrain at a cost of US$40 million.

Socio-demographics and Distribution Patterns Continue To Influence Saudi Packaged Food Saudi Arabia is distinguished by its particular socio-demographic characteristics and the rapid developments in distribution patterns. In 2009, the total population was estimated at around 27 million, up from 22.3 million in 2002. Children and young people under the age of 24 were the two largest groups accounting for a combined share of 58% of the Kingdom’s total population. Infants aged 0-36 months accounted for around 9% of total population. Local Saudi citizens made up 73% of the total population while the proportion of expatriates peaked at around 25% in 2009, according to the Saudi Department of Statistics. Despite the global financial crisis, development in distribution patterns also continued at the same high rate in 2009, with the number and selling areas of modern outlets, particularly supermarkets/hypermarkets, continuing to grow rapidly during the year thanks to the continual expansion strategies followed by leading local retailers such as Azizia Panda and Al Othaim, as well as by foreign multinationals such as Carrefour. The supermarket/hypermarket channel was the largest and most dynamic distribution channel for packaged food, with a value share of more than 37% in 2009, up by around one percentage point on 2008, at the expense of traditional distribution channels such as independent small grocers. Current Impact Socio-demographic changes and distribution patterns are still strong factors influencing Saudi packaged food, playing a key role in driving sales generally, as shopping habits and lifestyles of the younger generation are becoming increasingly Westernised and more liberal. Healthy population growth sustained high demand for staple food products. Children and young adults also contributed to the high sales of impulse and indulgence products such as confectionery, biscuits and savoury snacks, while the high proportion of babies aged 0-36 months is also driving high per capita consumption of baby food in the country. On the other hand, supermarkets/hypermarkets played an important role in combating the impact of the economic slowdown during 2008/2009. The number of these outlets continued to increase, offering consumers a better shopping environment and more attractive prices and discounts than traditional outlets. Such activities maintained demand for daily purchases of staples and also strongly drove sales of many emerging categories such as ready meals, meal replacement products and chilled processed food. Outlook Although data from the Saudi Ministry of Planning suggests a lower population growth rate over the forecast period, at around 2.5%, it will remain one of the highest rates in the world and the pace of demographic change will continue to accelerate. The composition of the Saudi population is expected to remain relatively unchanged with children and young adults under 24 years old remaining the main age groups. Unlike in many neighbouring countries such as the UAE and Qatar, Saudi Arabia is projected to see strong development in distribution patterns and retailing infrastructure, an evident trend even during the time of global financial crisis in 2008/2009. The number of shopping malls will continue to increase rapidly, leading to further gains to be achieved by modern outlets, particularly hypermarkets. Leading retailers recognised the strong shift towards modern and convenient outlets, especially among the younger generation of Saudis, with very aggressive expansion plans largely unaffected by the current global financial crisis.



Future Impact Demographic factors, accompanied by further developments in the lifestyles of the younger generation of Saudis, will contribute to the rise in sales within many sectors. Children and adults aged under 24, which will remain the main age groups within the Saudi population, will be the key target groups for leading suppliers as well as retailers. Consumers within this media-savvy group are more demanding as they look for convenience and are willing to explore new products. They also pay more attention to products with value-added features and want to follow more Westernised lifestyles and eating habits. Further modernisation in distribution patterns will also continue to fuel development within packaged food. Due to the increasing importance of such modern channels in the Kingdom, suppliers have been encouraged to introduce new launches within emerging niches. In addition to many staples from dairy products, bakery products and oils and fats, supermarkets/hypermarkets will continue to play a crucial role in boosting sales of many other categories, including frozen processed food, chilled processed food and ready meals, as well as baby food, which was previously only available in pharmacies.

MARKET DATA

Table 1 Sales of Packaged Food by Sector: Volume 2004-2009

2004 2005 2006 2007 2008 2009 Confectionery ('000 56.9 60.0 63.1 65.8 68.7 71.9 tonnes) Bakery products ('000 2,899.5 3,009.2 3,121.8 3,237.8 3,351.9 3,465.3 tonnes) Ice cream (million 54.9 57.7 60.7 63.9 67.2 70.3 litres) Dairy products (not - - - - - - calculable) Sweet and savoury 50.3 51.8 53.0 57.4 61.2 64.0 snacks ('000 tonnes) Snack bars ('000 tonnes) 0.4 0.4 0.5 0.6 0.6 0.7 Meal replacement 0.0 0.1 0.1 0.1 0.1 0.1 products ('000 tonnes) Ready meals ('000 tonnes) 0.8 0.9 1.0 1.1 1.1 1.2 Soup ('000 tonnes) 2.3 2.4 2.5 2.7 2.9 3.0 Pasta ('000 tonnes) 29.0 29.6 30.6 33.2 35.4 37.3 Noodles ('000 tonnes) 22.1 23.3 24.6 26.4 28.0 29.3 Canned/preserved food 85.4 89.3 92.2 95.6 99.4 102.8 ('000 tonnes) Frozen processed food 37.0 38.9 40.8 43.0 45.0 46.9 ('000 tonnes) Dried processed food 1,044.5 1,062.4 1,099.3 1,158.0 1,224.0 1,290.3 ('000 tonnes) Chilled processed food 9.7 10.3 10.7 11.3 12.1 12.7 ('000 tonnes) Oils and fats ('000 215.0 224.4 234.4 245.1 256.1 266.6 tonnes) Sauces, dressings and 65.0 68.3 72.6 77.0 81.1 84.7 condiments ('000 tonnes) Baby food (not - - - - - - calculable) Spreads ('000 tonnes) 21.3 22.5 23.8 25.2 26.7 28.3 Impulse and indulgence - - - - - - products (not calculable) Nutrition/staples (not - - - - - - calculable) Meal solutions ('000 202.6 212.4 222.1 233.0 244.1 253.8 tonnes) Packaged food (not - - - - - - calculable)



Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews, Euromonitor International estimates

Notes: Sum of sectors does not equal total packaged food because of double counting (for example canned soup is included in soups and canned foods)

Volume sales cannot be consolidated due to different unit measurements (eg confectionery in tonnes and ice cream in litres)

Table 2 Sales of Packaged Food by Sector: Value 2004-2009

SR million 2004 2005 2006 2007 2008 2009 Confectionery 2,087.1 2,211.4 2,343.2 2,510.3 2,865.5 3,264.5 Bakery products 8,561.7 9,045.1 9,565.8 10,349.2 12,213.0 13,992.3 Ice cream 871.5 919.2 972.9 1,048.8 1,176.3 1,263.7 Dairy products 7,405.7 7,829.0 8,315.9 9,135.6 10,586.7 11,429.4 Sweet and savoury snacks 1,108.8 1,129.6 1,142.1 1,202.1 1,310.9 1,398.2 Snack bars 23.2 26.3 29.8 34.2 40.1 47.5 Meal replacement products 5.0 5.7 6.6 7.5 8.8 10.6 Ready meals 21.7 24.5 26.8 29.0 31.3 33.5 Soup 92.9 96.2 102.4 110.0 117.5 124.2 Pasta 170.6 176.0 183.5 196.8 211.6 225.8 Noodles 267.6 281.9 303.9 327.9 349.8 370.7 Canned/preserved food 1,005.6 1,048.8 1,079.7 1,123.1 1,185.7 1,246.7 Frozen processed food 684.6 720.6 755.0 789.1 848.1 900.4 Dried processed food 4,844.6 5,051.8 5,256.0 5,607.7 6,310.4 6,792.9 Chilled processed food 272.9 287.9 307.1 324.5 363.2 385.3 Oils and fats 1,440.9 1,567.3 1,660.2 1,893.3 2,442.3 3,039.5 Sauces, dressings and 1,071.1 1,121.4 1,188.7 1,255.4 1,333.8 1,408.1 condiments Baby food 762.4 868.5 1,034.5 1,318.6 1,799.2 2,167.4 Spreads 453.4 480.5 509.1 550.1 635.8 721.2 Impulse and indulgence 8,111.6 8,560.2 9,040.4 9,709.6 11,049.0 12,434.2 products Nutrition/staples 19,309.2 20,426.6 21,641.1 23,785.5 28,167.0 31,511.3 Meal solutions 3,186.2 3,335.0 3,494.4 3,664.7 3,914.9 4,134.2 Packaged food 30,598.4 32,313.2 34,166.5 37,149.5 43,119.8 48,067.8 Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,

Euromonitor International estimates Notes: Sum of sectors does not equal total packaged food because of double counting (for example canned soup is

included in soups and canned foods)

Table 3 Sales of Packaged Food by Sector: % Volume Growth 2004-2009

% volume growth 2008/09 2004-09 CAGR 2004/09 TOTAL Confectionery 4.6 4.8 26.3 Bakery products 3.4 3.6 19.5 Ice cream 4.6 5.1 28.0 Dairy products - - - Sweet and savoury snacks 4.7 5.0 27.4 Snack bars 12.2 12.5 79.8 Meal replacement products 8.6 10.6 65.2 Ready meals 5.0 7.6 44.3 Soup 4.4 5.6 31.1 Pasta 5.3 5.2 28.6 Noodles 4.9 5.9 33.0 Canned/preserved food 3.4 3.8 20.3 Frozen processed food 4.1 4.9 26.7 Dried processed food 5.4 4.3 23.5 Chilled processed food 5.5 5.6 31.3 Oils and fats 4.1 4.4 24.0



Sauces, dressings and condiments 4.4 5.4 30.3 Baby food - - - Spreads 5.9 5.8 32.4 Impulse and indulgence products - - - Nutrition/staples - - - Meal solutions 4.0 4.6 25.3 Packaged food - - - Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


included in soups and canned foods) Volume sales cannot be consolidated due to different unit measurements (eg confectionery in tonnes and ice

cream in litres)

Table 4 Sales of Packaged Food by Sector: % Value Growth 2004-2009

% current value growth 2008/09 2004-09 CAGR 2004/09 TOTAL Confectionery 13.9 9.4 56.4 Bakery products 14.6 10.3 63.4 Ice cream 7.4 7.7 45.0 Dairy products 8.0 9.1 54.3 Sweet and savoury snacks 6.7 4.7 26.1 Snack bars 18.4 15.4 104.7 Meal replacement products 21.2 16.0 110.4 Ready meals 6.9 9.1 54.2 Soup 5.7 6.0 33.7 Pasta 6.7 5.8 32.3 Noodles 6.0 6.7 38.5 Canned/preserved food 5.2 4.4 24.0 Frozen processed food 6.2 5.6 31.5 Dried processed food 7.6 7.0 40.2 Chilled processed food 6.1 7.1 41.2 Oils and fats 24.5 16.1 110.9 Sauces, dressings and condiments 5.6 5.6 31.5 Baby food 20.5 23.2 184.3 Spreads 13.4 9.7 59.1 Impulse and indulgence products 12.5 8.9 53.3 Nutrition/staples 11.9 10.3 63.2 Meal solutions 5.6 5.3 29.8 Packaged food 11.5 9.5 57.1 Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


included in soups and canned foods)

Table 5 GBO Shares of Packaged Food 2004-2008

% retail value rsp Company 2004 2005 2006 2007 2008 Almarai Co Ltd 4.8 5.1 5.8 6.9 7.7 Nestlé SA 5.2 5.1 5.1 5.2 5.0 Danone, Groupe 4.2 4.2 4.4 4.6 4.3 Abdul-Kadir Al Muhaidib 2.9 3.3 3.7 4.0 4.0 & Sons Group Mars Inc 2.3 2.3 2.3 2.3 2.5 Savola Group 2.2 2.2 2.0 1.9 2.1 Kraft Foods Inc 1.8 1.7 1.8 1.9 1.9 Saudi Dairy & Foodstuff 2.4 2.3 2.2 2.2 1.9 Co Ltd (SADAFCO) Americana Group 1.7 1.7 1.9 1.9 1.8



Halwani Bros Co 1.6 1.6 1.7 1.6 1.6 Lactalis, Groupe 0.1 1.2 1.5 1.4 1.5 IFFCO Group 0.4 0.6 0.9 1.2 1.4 Sunrice Australia Pty Ltd 1.1 1.2 1.2 1.2 1.2 National Agricultural 1.0 1.1 1.1 1.2 1.2 Development Co (NADEC) PepsiCo Inc 1.3 1.3 1.3 1.2 1.1 Al Othman Agricultural 0.8 0.9 1.1 1.1 1.0 & Processing Co National Food 0.9 1.0 1.0 1.0 1.0 Industries Co Ltd Riceland Foods 0.7 0.7 0.9 1.0 1.0 Sunbulah Food & Fine 0.9 0.9 1.0 1.0 1.0 Pastries Manufacturing Co Ltd Bel, Groupe 0.8 0.7 0.8 0.8 0.8 Unilever Group 0.9 0.9 0.9 0.8 0.8 Fonterra Co-operative 0.6 0.6 0.8 0.8 0.8 Group Al Rasheed Group 0.6 0.7 0.7 0.7 0.8 National Biscuits & 0.8 0.8 0.8 0.8 0.8 Confectionery Co Ltd Cadbury Plc - - - - 0.8 Arla Foods Amba 2.4 2.5 0.8 0.9 0.7 Wyeth 0.4 0.4 0.5 0.6 0.7 Ajwa Group 1.6 1.5 0.8 0.6 0.6 Herfy Food Service Co Ltd 0.4 0.5 0.5 0.5 0.6 Indofood Sukses Makmur 0.6 0.6 0.6 0.6 0.6 Tbk PT Artisanal 17.4 17.2 17.1 16.9 16.8 Private Label 8.2 7.8 7.9 7.7 7.3 Generics 0.1 0.1 0.1 0.1 0.1 Others 28.8 27.1 26.9 25.4 24.5 Total 100.0 100.0 100.0 100.0 100.0 Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,

Euromonitor International estimates

Table 6 NBO Shares of Packaged Food 2004-2008

% retail value rsp Company 2004 2005 2006 2007 2008 Almarai Co Ltd 4.8 5.1 5.8 6.3 7.0 Al Muhaidib Grains Co 2.9 3.3 3.7 4.0 4.0 Al Safi Danone Ltd 3.9 4.0 4.2 3.9 3.5 Nestlé SA 3.7 3.6 3.6 3.5 3.5 Master Foods Middle 2.2 2.2 2.3 2.3 2.2 East FZE Saudi Vegetable Oil & 2.2 2.2 2.0 1.9 2.1 Ghee Co (SAVOLA) Saudi Dairy & Foodstuff 2.6 2.5 2.4 2.3 2.0 Co Ltd (SADAFCO) Halwani Bros Co 1.6 1.6 1.7 1.6 1.6 Saudi New Zealand Milk 1.2 1.2 1.4 1.5 1.5 Products Co Ltd National Food Co 1.3 1.3 1.4 1.5 1.4 (Americana) Saudi Food Industries 1.4 1.4 1.4 1.4 1.4 Co Ltd Deemah - United Food 1.2 1.2 1.4 1.4 1.4 Industries Corp Ltd National Food 1.3 1.3 1.4 1.4 1.3 Industries Co Ltd Sunrice Australia Pty Ltd 1.1 1.2 1.2 1.2 1.2



National Agricultural 1.0 1.1 1.1 1.2 1.2 Development Co (NADEC) Kraft Jacobs Suchard Ltd 1.2 1.1 1.1 1.1 1.1 Saudi Snack Foods Co 1.2 1.2 1.2 1.2 1.1 Al Othman Agricultural 0.9 0.9 1.1 1.1 1.1 & Processing Co Al-Muhaidib Foods 0.7 0.7 0.9 1.0 1.0 Sunbulah Food & Fine 0.9 0.9 1.0 1.0 1.0 Pastries Manufacturing Co Ltd Emirates Refinery Co Ltd 0.1 0.3 0.5 0.7 0.9 Wyeth-Ayerst 0.4 0.5 0.6 0.6 0.8 International Al Rasheed Food Co 0.6 0.7 0.7 0.7 0.8 National Biscuits & 0.8 0.8 0.8 0.8 0.8 Confectionery Co Ltd Danya Foods Ltd 2.4 2.5 0.8 0.9 0.7 Western Bakeries Co 0.4 0.5 0.5 0.5 0.7 Bestfoods Saudi Arabia 0.7 0.7 0.7 0.6 0.6 Herfy Food Service Co Ltd 0.4 0.5 0.5 0.5 0.6 Ajwa Grain Trading Co 1.9 1.9 0.9 0.6 0.6 Pinehill Arabia Food Ltd 0.5 0.6 0.6 0.6 0.6 Artisanal 17.4 17.2 17.1 16.9 16.8 Private Label 8.2 7.8 7.9 7.7 7.3 Generics 0.1 0.1 0.1 0.1 0.1 Others 28.6 28.0 28.2 28.0 28.2 Total 100.0 100.0 100.0 100.0 100.0 Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


Table 7 Brand Shares of Packaged Food 2005-2008

% retail value rsp Brand Company 2005 2006 2007 2008 Al Marai Almarai Co Ltd 5.1 5.8 6.3 7.0 Al Safi Al Safi Danone Ltd 3.1 3.1 2.9 2.5 Muhaidib Al Muhaidib Grains Co 1.9 2.1 2.3 2.3 Saudia Saudi Dairy & Foodstuff 2.1 2.0 1.9 1.7 Co Ltd (SADAFCO) Americana National Food Co 1.3 1.4 1.4 1.4 (Americana) Nido Nestlé SA 1.4 1.4 1.4 1.3 Sun White Sunrice Australia Pty Ltd 1.2 1.2 1.2 1.2 Nadec National Agricultural 1.1 1.1 1.2 1.2 Development Co (NADEC) Afia Saudi Vegetable Oil & 1.1 1.1 1.0 1.1 Ghee Co (SAVOLA) Galaxy Master Foods Middle 1.1 1.1 1.1 1.1 East FZE Nada Al Othman Agricultural 0.9 1.0 1.0 1.0 & Processing Co Halwani Halwani Bros Co 1.0 1.1 1.0 1.0 Two Girls Al-Muhaidib Foods 0.7 0.9 1.0 1.0 Luna National Food 0.9 0.9 1.0 0.9 Industries Co Ltd Al Rasheed Al Rasheed Food Co 0.7 0.7 0.7 0.8 Maggi Saudi Food Industries 0.8 0.8 0.8 0.7 Co Ltd Pride Deemah - United Food 0.6 0.7 0.7 0.7 Industries Corp Ltd Kraft Kraft Jacobs Suchard Ltd 0.7 0.7 0.7 0.7 Lusine Western Bakeries Co 0.5 0.5 0.5 0.7 Anchor Saudi New Zealand Milk 0.5 0.6 0.6 0.6



Products Co Ltd Al Arabi Saudi Vegetable Oil & 0.6 0.5 0.5 0.6 Ghee Co (SAVOLA) Herfy Herfy Food Service Co Ltd 0.5 0.5 0.5 0.6 Tasali Saudi Snack Foods Co 0.7 0.7 0.6 0.6 Cérélac Saudi Food Industries 0.5 0.5 0.5 0.6 Co Ltd Indomie Pinehill Arabia Food Ltd 0.6 0.6 0.6 0.6 Deemah Deemah - United Food 0.5 0.5 0.6 0.5 Industries Corp Ltd Mazola Bestfoods Saudi Arabia 0.6 0.6 0.6 0.5 Ülker Ülker Gida Sanayi ve 0.4 0.5 0.5 0.5 Ticaret AS Champion National Biscuits & 0.5 0.5 0.5 0.5 Confectionery Co Ltd S-26 Wyeth-Ayerst International 0.2 0.3 0.3 0.4 Artisanal 17.2 17.1 16.9 16.8 Private label Private Label 7.8 7.9 7.7 7.3 Others 43.4 41.5 41.3 41.6 Total 100.0 100.0 100.0 100.0 Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


Table 8 Penetration of Private Label by Sector 2004-2008

% retail value rsp 2004 2005 2006 2007 2008 Canned/preserved food 12.6 12.6 13.0 12.9 12.4 Dairy products 0.2 0.2 0.3 0.3 0.4 Dried processed food 41.2 39.5 40.3 40.3 39.6 Frozen processed food 3.0 3.0 3.4 3.6 3.3 Impulse and indulgence 3.3 3.1 3.0 3.0 3.0 products Meal solutions 7.6 8.0 8.4 8.3 7.8 Noodles 2.5 3.5 3.7 3.2 2.4 Nutrition/staples 10.4 9.8 9.9 9.6 9.0 Packaged food 8.2 7.8 7.9 7.7 7.3 Pasta 12.4 12.9 13.5 13.6 12.8 Ready meals 4.1 3.9 3.9 3.7 3.4 Sauces, dressings and 8.4 9.5 10.0 9.8 9.3 condiments Spreads - - 0.2 0.3 0.3 Sweet and savoury snacks 24.4 23.4 23.4 23.7 24.7 Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


Table 9 Sales of Packaged Food by Distribution Format: % Analysis 2004-2009

% retail value rsp 2004 2005 2006 2007 2008 2009 Store-Based Retailing 99.9 100.0 100.0 100.0 100.0 100.0 Grocery Retailers 96.8 97.2 97.5 97.7 97.5 97.4 Supermarkets/Hypermarkets 29.2 30.6 33.3 35.2 36.2 37.3 Discounters 3.4 3.7 3.9 4.4 4.8 5.6 Small Grocery Retailers 49.7 48.8 46.7 45.0 43.6 41.7 Convenience Stores 7.4 7.8 8.2 8.4 8.5 8.2 Independent Small Grocers 40.8 39.4 36.8 34.9 33.4 32.0 Forecourt Retailers 1.4 1.5 1.7 1.7 1.7 1.4 Other Grocery Retailers 14.6 14.1 13.6 13.0 12.9 12.9 Non-Grocery Retailers 3.1 2.8 2.5 2.3 2.5 2.6



Health & Beauty Retailers 1.3 1.3 1.4 1.6 1.8 1.9 Other Non-Grocery 1.9 1.5 1.1 0.7 0.7 0.6 Retailers Non-Store Retailing 0.1 0.0 0.0 0.0 0.0 0.0 Vending 0.0 0.0 0.0 0.0 0.0 0.0 Homeshopping - - - - - - Internet Retailing 0.1 - - - - - Direct Selling - - - - - - Total 100.0 100.0 100.0 100.0 100.0 100.0 Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


Table 10 Sales of Packaged Food by Sector and Distribution Format: % Analysis 2009

% retail value rsp C BP IC DP SSS SB Store-Based Retailing 99.9 100.0 100.0 100.0 100.0 100.0 Grocery Retailers 98.5 99.9 99.6 99.2 98.0 98.5 Supermarkets/Hypermarkets 39.0 29.0 41.5 41.7 33.0 65.0 Discounters 4.1 2.9 4.8 7.0 2.0 8.4 Small Grocery Retailers 34.5 35.8 30.7 46.2 61.0 24.1 Convenience Stores 6.3 6.8 8.1 9.2 13.0 11.6 Independent Small Grocers 26.3 27.8 20.0 35.3 46.0 12.0 Forecourt Retailers 1.9 1.2 2.6 1.7 2.0 0.5 Confectionery specialists 19.7 - - - - - Other Grocery Retailers 1.2 32.1 22.7 4.2 2.0 1.0 Non-Grocery Retailers 1.4 0.1 0.4 0.8 2.0 1.5 Health & Beauty Retailers 0.5 0.1 0.0 0.1 0.0 0.3 Other Non-Grocery 0.9 0.0 0.4 0.8 2.0 1.2 Retailers Non-Store Retailing 0.1 0.0 0.0 0.0 0.0 0.0 Vending 0.1 0.0 0.0 0.0 0.0 0.0 Homeshopping 0.0 0.0 0.0 0.0 0.0 0.0 Internet Retailing 0.0 0.0 0.0 0.0 0.0 0.0 Direct Selling 0.0 0.0 0.0 0.0 0.0 0.0 Total 100.0 100.0 100.0 100.0 100.0 100.0 MRP RM S P N C/PF Store-Based Retailing 100.0 100.0 100.0 100.0 100.0 100.0 Grocery Retailers 50.0 100.0 96.5 98.0 99.0 96.1 Supermarkets/Hypermarkets 33.0 64.0 37.0 46.0 39.0 43.2 Discounters 7.0 6.0 5.0 5.0 5.0 7.9 Small Grocery Retailers 10.0 30.0 54.5 47.0 55.0 44.9 Convenience Stores 10.0 22.0 8.5 12.0 7.0 8.2 Independent Small Grocers 0.0 7.0 44.0 32.0 46.0 33.7 Forecourt Retailers 0.0 1.0 2.0 3.0 2.0 3.0 Confectionery specialists - - - - - - Other Grocery Retailers 0.0 0.0 0.0 0.0 0.0 0.0 Non-Grocery Retailers 50.0 0.0 3.5 2.0 1.0 3.9 Health & Beauty Retailers 50.0 0.0 0.0 0.0 0.0 0.0 Other Non-Grocery 0.0 0.0 3.5 2.0 1.0 3.9 Retailers Non-Store Retailing 0.0 0.0 0.0 0.0 0.0 0.0 Vending 0.0 0.0 0.0 0.0 0.0 0.0 Homeshopping 0.0 0.0 0.0 0.0 0.0 0.0 Internet Retailing 0.0 0.0 0.0 0.0 0.0 0.0 Direct Selling 0.0 0.0 0.0 0.0 0.0 0.0 Total 100.0 100.0 100.0 100.0 100.0 100.0 FPF DPF CPF O&F SDC BF Store-Based Retailing 100.0 100.0 100.0 100.0 100.0 100.0



Grocery Retailers 99.0 99.4 98.0 99.5 99.5 60.0 Supermarkets/Hypermarkets 54.0 36.5 64.0 42.0 41.0 40.0 Discounters 4.0 6.8 4.0 11.0 6.0 7.5 Small Grocery Retailers 41.0 56.1 30.0 39.8 52.5 12.5 Convenience Stores 18.0 9.0 17.0 6.5 8.0 7.0 Independent Small Grocers 21.0 45.5 12.0 32.6 43.5 5.5 Forecourt Retailers 2.0 1.6 1.0 0.7 1.0 0.0 Confectionery specialists - - - - - - Other Grocery Retailers 0.0 0.0 0.0 6.7 0.0 0.0 Non-Grocery Retailers 1.0 0.6 2.0 0.5 0.5 40.0 Health & Beauty Retailers 0.0 0.0 0.0 0.0 0.0 39.0 Other Non-Grocery 1.0 0.6 2.0 0.5 0.5 1.0 Retailers Non-Store Retailing 0.0 0.0 0.0 0.0 0.0 0.0 Vending 0.0 0.0 0.0 0.0 0.0 0.0 Homeshopping 0.0 0.0 0.0 0.0 0.0 0.0 Internet Retailing 0.0 0.0 0.0 0.0 0.0 0.0 Direct Selling 0.0 0.0 0.0 0.0 0.0 0.0 Total 100.0 100.0 100.0 100.0 100.0 100.0 SPR Store-Based Retailing 100.0 Grocery Retailers 94.6 Supermarkets/Hypermarkets 45.0 Discounters 7.0 Small Grocery Retailers 39.6 Convenience Stores 8.0 Independent Small Grocers 29.6 Forecourt Retailers 2.0 Confectionery specialists - Other Grocery Retailers 3.0 Non-Grocery Retailers 5.4 Health & Beauty Retailers 4.5 Other Non-Grocery 0.9 Retailers Non-Store Retailing 0.0 Vending 0.0 Homeshopping 0.0 Internet Retailing 0.0 Direct Selling 0.0 Total 100.0 Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,

Euromonitor International estimates Key: C=Confectionery; BP=Bakery products; IC=Ice cream; DP=Dairy products; SSS=Sweet and savoury snacks;

SB=Snack bars; MRP=Meal replacement products; RM=Ready meals; S=Soup; P=Pasta; N=Noodles; C/PF=Canned/preserved food; FPF=Frozen processed food; DPF=Dried processed food; CPF=Chilled processed food; O&F=Oils and fats; SDC=Sauces, dressings and condiments; BF=Baby food; SPR=Spreads

Table 11 Forecast Sales of Packaged Food by Sector: Volume 2009-2014

2009 2010 2011 2012 2013 2014 Confectionery ('000 71.9 75.2 78.6 82.0 85.4 88.6 tonnes) Bakery products ('000 3,465.3 3,578.2 3,689.2 3,799.4 3,908.3 4,014.5 tonnes) Ice cream (million 70.3 73.3 76.3 79.2 82.1 84.7 litres) Dairy products (not - - - - - - calculable) Sweet and savoury 64.0 67.2 70.5 74.1 78.2 82.9 snacks ('000 tonnes) Snack bars ('000 tonnes) 0.7 0.8 0.9 1.0 1.0 1.1 Meal replacement 0.1 0.1 0.1 0.1 0.1 0.1



products ('000 tonnes) Ready meals ('000 tonnes) 1.2 1.2 1.3 1.4 1.5 1.6 Soup ('000 tonnes) 3.0 3.2 3.3 3.5 3.7 3.9 Pasta ('000 tonnes) 37.3 39.4 41.8 44.3 47.1 50.2 Noodles ('000 tonnes) 29.3 30.7 32.0 33.6 35.3 37.2 Canned/preserved food 102.8 106.6 110.9 115.8 121.3 127.4 ('000 tonnes) Frozen processed food 46.9 48.9 51.2 53.8 56.6 59.6 ('000 tonnes) Dried processed food 1,290.3 1,364.4 1,444.2 1,521.9 1,608.9 1,695.3 ('000 tonnes) Chilled processed food 12.7 13.4 14.1 14.8 15.7 16.6 ('000 tonnes) Oils and fats ('000 266.6 276.9 287.0 298.0 309.9 323.0 tonnes) Sauces, dressings and 84.7 88.6 92.9 97.7 103.0 108.8 condiments ('000 tonnes) Baby food (not - - - - - - calculable) Spreads ('000 tonnes) 28.3 29.8 31.4 33.0 34.6 36.2 Impulse and indulgence - - - - - - products (not calculable) Nutrition/staples (not - - - - - - calculable) Meal solutions ('000 253.8 264.4 276.4 289.8 304.6 320.8 tonnes) Packaged food (not - - - - - - calculable) Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


Table 12 Forecast Sales of Packaged Food by Sector: Value 2009-2014

SR million 2009 2010 2011 2012 2013 2014 Confectionery 3,264.5 3,381.8 3,505.9 3,634.3 3,767.2 3,906.5 Bakery products 13,992.3 14,542.6 15,082.9 15,618.8 16,145.7 16,684.5 Ice cream 1,263.7 1,254.6 1,257.3 1,287.2 1,322.7 1,364.9 Dairy products 11,429.4 11,561.9 11,939.0 12,401.6 12,926.3 13,511.1 Sweet and savoury snacks 1,398.2 1,494.3 1,600.5 1,714.1 1,844.5 1,997.7 Snack bars 47.5 52.1 56.9 61.7 66.5 71.2 Meal replacement products 10.6 11.5 12.5 13.4 14.3 15.3 Ready meals 33.5 36.1 39.1 42.6 46.5 50.9 Soup 124.2 132.2 141.6 152.5 164.3 178.2 Pasta 225.8 241.3 259.2 279.1 302.2 328.8 Noodles 370.7 392.7 415.3 440.8 468.6 500.6 Canned/preserved food 1,246.7 1,305.6 1,366.7 1,436.9 1,507.6 1,586.1 Frozen processed food 900.4 959.5 1,028.9 1,106.8 1,195.9 1,292.9 Dried processed food 6,792.9 7,327.3 7,930.9 8,543.4 9,245.5 9,991.0 Chilled processed food 385.3 408.5 433.6 462.3 496.3 532.5 Oils and fats 3,039.5 3,129.8 3,201.7 3,286.7 3,379.2 3,499.0 Sauces, dressings and 1,408.1 1,491.7 1,587.9 1,694.5 1,816.4 1,950.6 condiments Baby food 2,167.4 2,357.6 2,539.9 2,709.4 2,873.4 3,023.0 Spreads 721.2 749.6 783.5 819.0 857.0 893.1 Impulse and indulgence 12,434.2 12,888.4 13,370.5 13,891.4 14,439.8 15,039.3 products Nutrition/staples 31,511.3 32,782.4 34,336.0 35,979.7 37,768.9 39,666.9 Meal solutions 4,134.2 4,370.5 4,635.6 4,934.0 5,266.3 5,631.2 Packaged food 48,067.8 50,028.5 52,328.2 54,790.0 57,458.5 60,319.4 Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,




Table 13 Forecast Sales of Packaged Food by Sector: % Volume Growth 2009-2014

% volume growth 2013/14 2009-14 CAGR 2009/14 TOTAL Confectionery 3.8 4.3 23.3 Bakery products 2.7 3.0 15.8 Ice cream 3.2 3.8 20.5 Dairy products - - - Sweet and savoury snacks 6.0 5.3 29.4 Snack bars 7.4 9.3 56.2 Meal replacement products 5.4 6.5 37.0 Ready meals 6.8 6.4 36.3 Soup 6.0 5.3 29.6 Pasta 6.5 6.1 34.5 Noodles 5.5 4.9 26.9 Canned/preserved food 5.0 4.4 23.9 Frozen processed food 5.4 4.9 27.2 Dried processed food 5.4 5.6 31.4 Chilled processed food 6.1 5.5 30.6 Oils and fats 4.2 3.9 21.2 Sauces, dressings and condiments 5.6 5.1 28.5 Baby food - - - Spreads 4.7 5.1 28.2 Impulse and indulgence products - - - Nutrition/staples - - - Meal solutions 5.3 4.8 26.4 Packaged food - - - Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


Table 14 Forecast Sales of Packaged Food by Sector: % Value Growth 2009-2014

% constant value growth 2009-14 CAGR 2009/14 TOTAL Confectionery 3.7 19.7 Bakery products 3.6 19.2 Ice cream 1.6 8.0 Dairy products 3.4 18.2 Sweet and savoury snacks 7.4 42.9 Snack bars 8.4 49.8 Meal replacement products 7.6 44.3 Ready meals 8.7 52.0 Soup 7.5 43.4 Pasta 7.8 45.6 Noodles 6.2 35.0 Canned/preserved food 4.9 27.2 Frozen processed food 7.5 43.6 Dried processed food 8.0 47.1 Chilled processed food 6.7 38.2 Oils and fats 2.9 15.1 Sauces, dressings and condiments 6.7 38.5 Baby food 6.9 39.5 Spreads 4.4 23.8 Impulse and indulgence products 3.9 21.0 Nutrition/staples 4.7 25.9 Meal solutions 6.4 36.2 Packaged food 4.6 25.5 Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,




FOODSERVICE – KEY TRENDS AND DEVELOPMENTS

Headlines

• The foodservice channel registers healthy growth in 2009 with volume sales up by 4% on 2008

• Several growth factors continue to impact sales positively, largely unaffected by the economic downturn

• Spreads is the most dynamic sector in 2009, with volume sales up by 6% to 2,070 tonnes

• Sweet and savoury snacks and canned/preserved food are the least dynamic in 2009, with volume sales up by 2% from 2008

• The largest local suppliers of bakery products, dairy products and dried processed food dominate sales

• The forecast period is set to see foodservice maintaining its momentum; volume sales are calculated to grow by a CAGR of around 4%

Trends

• In 2009, Saudi foodservice continued to grow steadily at a similar healthy rate to that of the previous year and the average of the review period. The several growth factors that drove sales during the review period continued to impact sales positively, largely unaffected by the economic slowdown during the year. The number of fast food outlets and their transactions grew healthily in 2009, while the number of pilgrims visiting the country during Hajj and Omrah increased slightly despite the fears of a swine flu epidemic. Demographic factors, a declining unemployment rate and further development of the local tourism industry also remained as growth factors.

• Sales through foodservice are largely driven by staple food products including mainly bakery products, volume sales of which approached 437,000 tonnes in 2009. Other major contributors to foodservice sales include staple products that are consumed mainly through the largest foodservice channels such as restaurants, fast food outlets and hotels, namely dairy products, dried processed food including rice, and oils and fats, particularly vegetable and seed oils which are used for frying and cooking. The Saudi market is characterised by the very strong presence of multinational fast food operators, such as McDonald’s, Pizza Hut, Domino’s Pizza, Burger King and KFC, as well as local operators such as House of Donuts (doughnut chain) and Kudu, Al Tazej and Al Baik (all sandwich and fried chicken chains).

• Spreads was the most dynamic sector in 2009, wivolume sales up by 6% to 2,070 tonnes. Albeit from a low base, the category benefited largely from growing demand for jams/preserves and honey through restaurants, hotels and doughnut shops. Leading suppliers such as Sunbulah Food & Fine Pastries Manufacturing Co Ltd and Halwani Bros Co, as well as other new rivals such as Quraish Marketing Co, Wadi Al Nahl Est and Wadi Al Sham Co, contributed to this expansion through the offer of large packs designed for catering, at very affordable prices (for example packs of 1 kg, 3 kg, 4 kg or 5 kg).

• Sweet and savoury snacks and canned/preserved food did not show strong growth in 2009, being the least dynamic with their volume sales up by 2% each in 2009. Consumers’ and foodservice operators’ preference for fresh and healthy ingredients is the key factor behind the restricted growth in canned/preserved food, while increased threats from rapidly growing snack alternatives in the confectionery, bakery products and snack bars categories continued to curb growth in sweet and savoury snacks.

Competitive Landscape

• Operators within the foodservice channel are looking for low prices and fast and continuous delivery for their daily needs from packaged foods. As a result, giant local suppliers competing mainly in terms of production capacity, prices and strong distribution fleets appeared very dominant in foodservice. These include companies such as Almarai Co Ltd, Al Safi Danone Ltd, Danya Foods Ltd and Saudi Dairy & Foodstuff Co Ltd (SADAFCO) in dairy products; Saudi Vegetable Oil & Ghee Co (SAVOLA) in oils and fats; Al Muhaidib Grains Co in dried processed food; Al Rasheed Food Co and Herfy Food Service Co Ltd in bakery products and National Food Co (Americana) in frozen processed food.

• Most of these companies are responsible for many catering-sized products aimed at foodservice outlets. They are also dedicating special sales and delivery teams to serving foodservice outlets across all cities of



the Kingdom. Forming special agreements with leading foodservice operators, especially those with chained outlets, was also a main goal that many suppliers sought to achieve in order to secure strong sales. Examples include United Food Services (United Group), the sole distribution centre for McDonald’s restaurants in Saudi Arabia, and National Food Co (Americana), the sole supplier of frozen processed food products for Americana Group’s franchised fast food restaurants such as Hardee’s, Chicken Tikka, KFC, Wimpy and Pizza Hut.

• Share patterns and movements in retail packaged food are mirrored in foodservice. In 2008 Almarai Co Ltd maintained its position as the largest supplier and best performer in foodservice. The company excelled in dairy products, particularly cheese, thanks to its wide variety of feta cheese, shredded mozzarella and sliced processed cheese. Strong gains were also achieved in butter where the company confirmed its leadership at the expense of Danya Foods Ltd’s Lurpak, which continued to suffer from the boycott of Danish goods.

• Other strong performers in 2008 included Al Rasheed Food Co, which was able to cater to many foodservice outlets with its wide range of packaged pastries and Western-type bread; Saudi Vegetable Oil & Ghee Co (SAVOLA) and Emirates Refinery Co Ltd, which both outperformed competitors in vegetable and seed oil, products that are widely consumed in fast food outlets. On the other hand, the main losers in 2008 included Danya Foods Ltd, which has seen its sales from Lurpak in butter and Three Cows in cheese decline dramatically in recent years because of the boycott.

Prospects

• Over the forecast period, foodservice will see slower growth rates across the majority of sectors than across the review period; however, growth will remain typically healthy. Bakery products and noodles will buck the trend and see stronger growth, both boosted by trends towards more international menus in foodservice outlets.

• Unit prices, which reached their highest levels in 2008 and early 2009, are expected to decline or at least to stabilise across many product types, due to declining global prices of key food products such as grains, sugar, vegetable oil and milk. Such a decline will favour suppliers and foodservice operators as well as consumers, leading to stronger demand for many packaged food products. The industry, which tackled the global financial crisis successfully during 2008/2009, will also continue to benefit from the several growth factors that this wealthy country enjoys, including demographic factors, rising per capita and disposable incomes, declining unemployment and the continual development of the local tourism industry.

• Restaurants, namely fast food outlets, will maintain their position as the largest foodservice channel and the main driver for sales and growth through foodservice. The number of these outlets is projected to increase strongly during the forecast period thanks to optimistic expansion plans unveiled by leading operators of chains, either of multinational brands such as Burger King, McDonald’s and Pizza Hut or local fascias such as Al Tajaz and Al Baik. Many new arrivals are also projected to target the large proportion of young adults in this wealthy market as well as the high percentage of Western expatriates in the Kingdom (the most recent newcomer in 2009, for example, was The Pizza Co from UAE).

• Potential threats to growth will continue to come from social, cultural and religious restrictions in this Islamic country, with restrictive legislation that still bans social mixing of the sexes in public places and bans women from driving cars, the only regulation of its kind in the world. Suppliers for the foodservice channel are also facing increasing threats from rapidly growing hypermarkets and wholesalers, which offer very competitive prices on bulk purchases. Such channels are becoming a significant means of supply used by foodservice operators.

Sector Data

Table 15 Foodservice Sales of Packaged Food by Sector: Volume 2004-2009

2004 2005 2006 2007 2008 2009 Confectionery ( tonnes) 2,108.5 2,234.1 2,382.1 2,496.0 2,634.5 2,782.9 Bakery products ( tonnes) 355,057.9 368,076.0 382,072.0 398,673.6 416,925.5 436,551.2 Ice cream ('000 litres) 4,606.4 4,821.5 5,068.5 5,360.1 5,657.0 5,925.0 Dairy products (not - - - - - - calculable) Sweet and savoury 2,100.6 2,208.1 2,279.3 2,356.0 2,408.4 2,457.0



snacks ( tonnes) Snack bars ( tonnes) - - - - - - Meal replacement - - - - - - products ( tonnes) Ready meals ( tonnes) 59.0 62.8 65.8 68.4 70.6 72.8 Soup ( tonnes) 474.7 498.8 531.0 571.1 595.0 614.9 Pasta ( tonnes) 3,340.0 3,480.9 3,659.2 3,911.7 4,043.5 4,187.4 Noodles ( tonnes) 1,169.5 1,218.1 1,302.5 1,395.9 1,450.0 1,510.7 Canned/preserved food ( 14,642.7 15,159.7 15,559.1 16,027.0 16,412.0 16,776.2 tonnes) Frozen processed food ( 15,726.0 16,550.3 17,197.3 18,057.2 18,616.9 19,135.8 tonnes) Dried processed food ( 51,889.5 55,314.6 58,532.3 61,894.4 65,597.8 69,079.1 tonnes) Chilled processed food 2,750.0 2,933.4 3,127.3 3,297.1 3,429.0 3,549.0 ( tonnes) Oils and fats ( tonnes) 31,883.0 33,391.1 35,129.6 37,275.0 39,379.0 41,009.4 Sauces, dressings and 35,373.0 37,047.7 38,890.5 40,516.2 41,909.4 43,213.6 condiments ( tonnes) Baby food (not - - - - - - calculable) Spreads ( tonnes) 1,560.1 1,645.0 1,737.4 1,837.5 1,950.5 2,066.4 Impulse and indulgence - - - - - - products (not calculable) Nutrition/staples (not - - - - - - calculable) Meal solutions ( tonnes) 69,346.4 72,574.5 75,695.2 78,863.4 81,361.5 83,692.4 Packaged food (not - - - - - - calculable) Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


Table 16 Foodservice Sales of Packaged Food by Sector: % Volume Growth 2004-2009

% volume growth 2008/09 2004-09 CAGR 2004/09 TOTAL Confectionery 5.6 5.7 32.0 Bakery products 4.7 4.2 23.0 Ice cream 4.7 5.2 28.6 Dairy products - - - Sweet and savoury snacks 2.0 3.2 17.0 Snack bars - - - Meal replacement products - - - Ready meals 3.1 4.3 23.4 Soup 3.3 5.3 29.5 Pasta 3.6 4.6 25.4 Noodles 4.2 5.3 29.2 Canned/preserved food 2.2 2.8 14.6 Frozen processed food 2.8 4.0 21.7 Dried processed food 5.3 5.9 33.1 Chilled processed food 3.5 5.2 29.1 Oils and fats 4.1 5.2 28.6 Sauces, dressings and condiments 3.1 4.1 22.2 Baby food - - - Spreads 5.9 5.8 32.5 Impulse and indulgence products - - - Nutrition/staples - - - Meal solutions 2.9 3.8 20.7 Packaged food - - - Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,




Table 17 Forecast Foodservice Sales of Packaged Food by Sector: Volume 2009-2014

2009 2010 2011 2012 2013 2014 Confectionery ( tonnes) 2,782.9 2,932.7 3,081.9 3,228.1 3,378.5 3,528.0 Bakery products ( tonnes) 436,551.2 456,138.4 476,001.9 496,112.4 516,596.6 538,708.5 Ice cream ('000 litres) 5,925.0 6,186.0 6,439.4 6,700.1 6,962.5 7,236.5 Dairy products (not - - - - - - calculable) Sweet and savoury 2,457.0 2,512.9 2,572.2 2,635.4 2,710.0 2,790.1 snacks ( tonnes) Snack bars ( tonnes) - - - - - - Meal replacement - - - - - - products ( tonnes) Ready meals ( tonnes) 72.8 75.0 77.5 80.3 83.2 86.0 Soup ( tonnes) 614.9 636.9 666.6 698.6 732.1 764.5 Pasta ( tonnes) 4,187.4 4,349.9 4,528.2 4,732.0 4,936.9 5,134.4 Noodles ( tonnes) 1,510.7 1,584.1 1,667.0 1,768.2 1,865.1 1,981.4 Canned/preserved food ( 16,776.2 17,169.0 17,610.7 18,092.6 18,608.1 19,188.1 tonnes) Frozen processed food ( 19,135.8 19,742.2 20,375.2 21,077.9 21,851.8 22,658.3 tonnes) Dried processed food ( 69,079.1 72,942.8 76,664.6 80,708.7 85,110.1 90,174.0 tonnes) Chilled processed food 3,549.0 3,675.3 3,837.0 4,011.6 4,199.0 4,399.7 ( tonnes) Oils and fats ( tonnes) 41,009.4 42,798.3 44,397.1 46,629.4 49,114.7 51,836.6 Sauces, dressings and 43,213.6 44,642.6 46,235.0 47,899.4 49,730.5 51,754.0 condiments ( tonnes) Baby food (not - - - - - - calculable) Spreads ( tonnes) 2,066.4 2,183.1 2,299.8 2,422.4 2,551.3 2,687.0 Impulse and indulgence - - - - - - products (not calculable) Nutrition/staples (not - - - - - - calculable) Meal solutions ( tonnes) 83,692.4 86,274.1 89,139.0 92,202.0 95,551.8 99,204.7 Packaged food (not - - - - - - calculable) Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


Table 18 Forecast Foodservice Sales of Packaged Food by Sector: % Volume Growth 2009-2014

% volume growth 2013/14 2009-14 CAGR 2009/14 TOTAL Confectionery 4.4 4.9 26.8 Bakery products 4.3 4.3 23.4 Ice cream 3.9 4.1 22.1 Dairy products - - - Sweet and savoury snacks 3.0 2.6 13.6 Snack bars - - - Meal replacement products - - - Ready meals 3.3 3.4 18.1 Soup 4.4 4.4 24.3 Pasta 4.0 4.2 22.6 Noodles 6.2 5.6 31.2 Canned/preserved food 3.1 2.7 14.4 Frozen processed food 3.7 3.4 18.4 Dried processed food 5.9 5.5 30.5 Chilled processed food 4.8 4.4 24.0 Oils and fats 5.5 4.8 26.4 Sauces, dressings and condiments 4.1 3.7 19.8



Baby food - - - Spreads 5.3 5.4 30.0 Impulse and indulgence products - - - Nutrition/staples - - - Meal solutions 3.8 3.5 18.5 Packaged food - - - Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


IMPULSE AND INDULGENCE PRODUCTS – KEY TRENDS AND DEVELOPMENTS

Headlines

• Current value sales growth reach almost 13% in 2009, with sales exceeding SR12 billion

• Suppliers defy the global economic downturn and maintain strong demand through aggressive activities across all categories

• Snack bars maintains its position as the most dynamic category in 2009, with sales up by more than 18% to almost SR48 million

• Unit prices increase by an average of around 7% across all product types

• Master Foods Middle East FZE leads in a highly fragmented environment, with share rising to over 8% in 2008

• The forecast period is projected to see constant value sales growing at a healthier CAGR of 4%

Trends

• The impulse and indulgence products segment is growing rapidly; its current value sales growth in 2009 was above the review period average. Saudi Arabia is a wealthy and young community and the majority of consumers enjoy high per capita and disposable incomes. As a result, most impulse and indulgence products, especially chocolate confectionery, are perceived as affordable luxuries.

• In spite of the economic downturn and rising unit prices across all categories, at around 7% in 2009 saw leading suppliers such as Master Foods Middle East FZE, Nestlé SA, Cadbury Ltd, Nabisco Arabia Co Ltd (NAARCO) and International Foodstuffs Co maintain high demand across all product types through very aggressive activities, including dynamic new product launches and product diversification, extensive television advertising and attractive in-store promotions, especially on multi-packs. Sales benefited also from the range of newcomers which entered a number of categories during the previous two years and into 2009. Examples include Kuwait Danish Dairy Co in dairy products; Mass Food Co in snack bars; Midor AG and Jules Destrooper NV in biscuits; Galler Chocolaterie SA in tablets among many others.

• Premiumisation and tapping into growing demand for quality products remained the main focus of existing players’ and newcomers’ activities, especially in chocolate confectionery and biscuits. Health-positioned and child-orientated products were also other areas of focus for suppliers in order to improve per capita consumption, especially in breakfast cereals and snack bars. Packaging was also an important area for development with convenient packs for on-the-go consumption the fastest growing trend in this regard (such packs are increasingly seen in many categories such as confectionery, especially gum, as well as in biscuits and pastries).

• In a reflection of its performance over the review period, snack bars maintained its position as the most dynamic category within impulse and indulgence products. Sales continued to grow rapidly in 2009, driven mainly by key launches from previous years, including the Temmy’s range of products introduced in 2006/2007 by Mass Food Co and Balisto from Mars Inc, introduced in 2008. 2009 continued to see further newcomers including, for example, Heartland, a low-fat granola bar from Heartland Inc. Although lacking in advertising support, such launches, in particular Temmy’s, helped achieve better penetration among many Saudis, who are unfamiliar with such types of snacks.



• Distribution was a main contributor to the growing popularity of impulse and indulgence snack products as they are widely available in many types of outlets, even including independent small grocers. Impulse and indulgence products are purchased either during family shopping trips or by schoolchildren and adults whilst out.


• Apart from the high share held by artisanal production due to the strong presence of such products within unpackaged pastries and cakes as well as ice cream, impulse and indulgence products appeared to be a highly fragmented environment; none of the suppliers was able to achieve a double-digit value share in 2008. This reflects the fierce competition among giant multinational, regional and local suppliers present in this category of high potential.

• In 2008, Master Foods Middle East FZE was able to maintain leadership and to achieve further rises in its value share. The company demonstrated strong leadership in chocolate confectionery with an impressive value share of 43% in 2008, despite the increased threat from major competitors such as Nestlé SA, Cadbury Ltd and Ferrero SpA. It also improved its limited presence in other product areas such as sugar confectionery, cakes and biscuits. The company appeared most dynamic in terms of advertising, promotion and new product launches, such as Galaxy Senzi in 2008 and Galaxy Smooth Dark in 2009, both in chocolate confectionery. Major headway was made by Galaxy Jewels in standard boxed assortments, Galaxy in tablets, Snickers in countlines and M&M’s in bagged selflines/softlines.

• International Foodstuffs Co continued to perform well in 2008 and was the best performer in terms of retail value share growth. The company dominated sales of impulse ice cream, thanks to the wide range of products that it offers. It continued to expand both in terms of product variety, particularly due to its range of multi-packs, and in the number of points of sale in which its products are present across the main cities of the Kingdom.

• Despite the presence of many multinational companies, local producers were able to achieve a strong foothold within many categories, particularly where multinationals are absent or have limited presence. Leading local suppliers included National Biscuits & Confectionery Co Ltd and Deemah - United Food Industries Corp Ltd, the second and third ranked operators in biscuits, and Halwani Bros Co, the leading company in sugar confectionery. Other strong local players include National Food Co (Americana), the leading company in cakes and Al Rasheed Food Co, the leading company in pastries. Local companies tend to compete mainly on price and distribution as well as niches, as is the case with Halwani Bros Co, which led sales of halva.

• The impulse and indulgence category witnessed the entry of many new arrivals during the latter part of the review period and all contributed to the expansion of many categories and to the development of many important trends such as premiumisation and the growing demand for quality and health-positioned products. Examples include Mass Food Co in snack bars, Galler Chocolaterie SA, Chocolat Stella SA and Alfred Ritter GmbH & Co KG in tablets and Midor AG and Jules Destrooper NV in biscuits.

• Due to the strong presence of both multinational and local brands within impulse and indulgence products, private label remained very small across most sectors, with only 3% value share in 2008, unchanged from the previous year. The main operators with private label included chained retailers such as Carrefour, Al Sadhan, Azizia Panda and Al Othaim. Private label tends to offer lower quality products retailing at a lower price, which makes them very appealing to the less well-off members of the population and the huge number of low-income Asian expatriates. Major international retailers import popular private label lines from abroad, menaing there is wide product availability in sectors such as sweet & savoury snacks, where private label accounts for 25% of sector sales

Prospects

• The forecast period is projected to see constant value sales of impulse and indulgence products growing at a healthier CAGR than that of the review period, calculated at 4% between 2009 and 2014. Demographic factors, characterised by the healthy growth rate and the youthful nature of the Saudi population; increasing per capita incomes; the growing influence of Western lifestyles; the growing trend towards spending more time in shopping centres and the dramatic development of the retail infrastructure due to the boom in supermarkets/hypermarkets and the emergence of vending machines, will all provide excellent stimuli for the continued development of new snacking habits.



• The forecast period is projected to see a continuation of the same trends demonstrated during the latter part of the review period, namely premiumisation and a growing demand for quality and health-positioned products. These will continue to be supplier-driven trends through more aggressive activities projected to continue in terms of new product launches, advertising and promotions. Such activities, which showed no signs of slowing down even during the 2008/2009 financial crisis, are projected to increase during the forecast period with multinationals such as Master Foods Middle East FZE, Nestlé SA, Cadbury Ltd and Nabisco Arabia Co Ltd (NAARCO) all projected to lead these activities.

• Confectionery and pastries will continue to drive sales towards the end of the forecast period, constant value sales of which will account for 26% and 27% of total retail sales in 2014. However, strong competition will continue to come from biscuits, which will remain the main area of focus of multinationals, locals and newcomers due to the growing trend towards snacking on biscuits. On the other hand, the snack bars category will maintain its position as the most dynamic over the forecast period. Key launches, including mainly Temmy’s (Mass Food Co) in 2007 and Balisto (Mars Inc) in 2008 will be major contributors to the future performance of impulse and indulgence products.

• Potential company activity is expected to be focused on impulse and indulgence products aimed at the whole family and designed to be consumed indoors rather than outdoors (for example multi-packs in dairy-based ice cream, chocolate confectionery, pastries and biscuits, take-home ice cream and boxed assortments). Due to the conservative nature of the Kingdom and the very hot climate that persists all year round, snacking in Saudi Arabia typically takes place inside the home, amongst family or friends. The late 2009 television advertisement for Galaxy Jewels aims to encourage consumption of the brand by the whole family while watching television rather than traditional consumption during festive occasions.

Sector Data

Table 19 Sales of Impulse and Indulgence Products by Sector: Volume 2004-2009

2004 2005 2006 2007 2008 2009 Confectionery ( tonnes) 56,933.0 59,952.8 63,144.4 65,795.5 68,714.5 71,890.6 Pastries ( tonnes) 119,617.0 128,765.2 138,507.6 149,518.6 159,274.6 168,731.9 Cakes ( tonnes) 46,010.0 47,921.0 50,050.2 52,357.9 54,789.0 57,116.1 Biscuits ( tonnes) 64,520.0 68,135.1 72,406.8 77,069.7 81,766.4 86,472.2 Ice cream ('000 litres) 54,921.3 57,654.2 60,701.4 63,911.9 67,186.1 70,299.5 Sweet and savoury 50,280.7 51,797.7 53,034.9 57,370.9 61,164.4 64,045.7 snacks ( tonnes) Snack bars ( tonnes) 394.6 441.1 493.9 558.4 632.6 709.7 Impulse and indulgence - - - - - - products (not calculable) Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


Table 20 Sales of Impulse and Indulgence Products by Sector: Value 2004-2009

SR million 2004 2005 2006 2007 2008 2009 Confectionery 2,087.1 2,211.4 2,343.2 2,510.3 2,865.5 3,264.5 Pastries 2,103.1 2,255.8 2,419.8 2,627.2 3,029.1 3,455.4 Cakes 986.6 1,029.6 1,077.8 1,139.1 1,290.3 1,450.0 Biscuits 931.3 988.3 1,054.8 1,147.8 1,336.7 1,554.8 Ice cream 871.5 919.2 972.9 1,048.8 1,176.3 1,263.7 Sweet and savoury snacks 1,108.8 1,129.6 1,142.1 1,202.1 1,310.9 1,398.2 Snack bars 23.2 26.3 29.8 34.2 40.1 47.5 Impulse and indulgence 8,111.6 8,560.2 9,040.4 9,709.6 11,049.0 12,434.2 products Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,




Table 21 Sales of Impulse and Indulgence Products by Sector: % Volume Growth 2004-2009

% volume growth 2008/09 2004-09 CAGR 2004/09 TOTAL Confectionery 4.6 4.8 26.3 Pastries 5.9 7.1 41.1 Cakes 4.2 4.4 24.1 Biscuits 5.8 6.0 34.0 Ice cream 4.6 5.1 28.0 Sweet and savoury snacks 4.7 5.0 27.4 Snack bars 12.2 12.5 79.8 Impulse and indulgence products - - - Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


Table 22 Sales of Impulse and Indulgence Products by Sector: % Value Growth 2004-2009

% current value growth 2008/09 2004-09 CAGR 2004/09 TOTAL Confectionery 13.9 9.4 56.4 Pastries 14.1 10.4 64.3 Cakes 12.4 8.0 47.0 Biscuits 16.3 10.8 66.9 Ice cream 7.4 7.7 45.0 Sweet and savoury snacks 6.7 4.7 26.1 Snack bars 18.4 15.4 104.7 Impulse and indulgence products 12.5 8.9 53.3 Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


Table 23 Company Shares of Impulse and Indulgence Products 2004-2008

% retail value rsp Company 2004 2005 2006 2007 2008 Master Foods Middle 7.5 7.8 8.1 8.2 8.3 East FZE Saudi Snack Foods Co 4.2 4.2 4.1 4.0 3.8 Nestlé SA 3.4 3.5 3.4 3.3 3.3 National Biscuits & 3.0 3.1 3.1 3.1 3.1 Confectionery Co Ltd Deemah - United Food 2.3 2.3 2.4 2.5 2.4 Industries Corp Ltd Halwani Bros Co 2.1 2.2 2.2 2.1 2.1 International 1.1 1.3 1.5 1.9 2.1 Foodstuffs Co Cadbury Ltd 1.7 1.7 1.8 1.8 1.9 Nabisco Arabia Co Ltd 1.5 1.6 1.7 1.7 1.8 (NAARCO) Al Jazirah Food 2.1 2.0 1.8 1.7 1.7 Processing Co Ltd Saudi Dairy & Foodstuff 1.7 1.6 1.5 1.5 1.4 Co Ltd (SADAFCO) Ülker Gida Sanayi ve 1.1 1.2 1.2 1.3 1.4 Ticaret AS National Food Co 1.2 1.2 1.3 1.3 1.4 (Americana) Al Rasheed Food Co 1.1 1.1 1.1 1.2 1.2 Saudi Ice-Cream Factory 1.3 1.2 1.1 1.1 1.0 Ferrero SpA 1.0 1.0 0.9 0.9 1.0



Procter & Gamble Arabia 1.0 1.0 1.0 1.0 0.9 Arabian Food & Dairy 0.9 0.9 0.9 0.9 0.9 Factories Co Kraft Jacobs Suchard Ltd 1.0 0.9 0.9 0.9 0.9 Cadbury Adams Middle 0.9 0.9 0.9 0.9 0.8 East SAL Wrigley Co Ltd, The 0.6 0.6 0.6 0.7 0.7 Danone, Groupe 0.7 0.7 0.7 0.7 0.7 United Biscuits 0.5 0.5 0.6 0.6 0.7 International Bahlsen GmbH & Co KG 0.6 0.6 0.6 0.6 0.7 Western Bakeries Co 0.4 0.4 0.5 0.5 0.6 Storck GmbH & Co 0.6 0.6 0.6 0.6 0.6 Batterjee Foodstuffs 0.7 0.7 0.7 0.7 0.6 Factory Loacker SpA, A 0.4 0.5 0.5 0.5 0.6 Chocolaterie Guylian NV 0.5 0.5 0.5 0.5 0.5 Lorenz Bahlsen Snack- 0.4 0.5 0.5 0.5 0.5 World GmbH & Co KG Germany Al Rabie AlSaudia Dairy 0.5 0.5 0.4 0.2 - Co Ltd Artisanal 35.9 36.0 36.2 36.3 36.5 Private Label 3.3 3.1 3.0 3.0 3.0 Generics 0.1 0.1 0.1 0.1 0.1 Others 14.7 13.9 13.6 13.2 12.8 Total 100.0 100.0 100.0 100.0 100.0 Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


Table 24 Brand Shares of Impulse and Indulgence Products 2005-2008

% retail value rsp Brand Company 2005 2006 2007 2008 Galaxy Master Foods Middle 3.8 3.9 4.0 4.0 East FZE Deemah Deemah - United Food 2.0 2.1 2.1 2.1 Industries Corp Ltd Tasali Saudi Snack Foods Co 2.3 2.2 2.1 1.9 Champion National Biscuits & 1.7 1.7 1.8 1.8 Confectionery Co Ltd Al Nakhlah Halva Halwani Bros Co 1.7 1.6 1.5 1.6 Lay's Saudi Snack Foods Co 1.5 1.5 1.6 1.5 Gandour Al Jazirah Food 1.8 1.6 1.5 1.4 Processing Co Ltd Ülker Ülker Gida Sanayi ve 1.2 1.2 1.3 1.4 Ticaret AS Americana National Food Co 1.2 1.3 1.3 1.3 (Americana) Al Rasheed Al Rasheed Food Co 1.1 1.1 1.2 1.2 Kwality Saudi Ice-Cream Factory 1.2 1.1 1.1 1.0 Igloo International 0.7 0.8 1.0 1.0 Foodstuffs Co M&M's Master Foods Middle 0.8 0.9 0.9 0.9 East FZE Pringles Procter & Gamble Arabia 1.0 1.0 0.9 0.9 Snickers Master Foods Middle 0.8 0.9 0.9 0.9 East FZE Tea Shop National Biscuits & 1.0 1.0 0.9 0.9 Confectionery Co Ltd KitKat Nestlé SA 0.7 0.8 0.8 0.8 Oreo Nabisco Arabia Co Ltd 0.7 0.7 0.7 0.8 (NAARCO)



Toblerone Kraft Jacobs Suchard Ltd 0.8 0.8 0.8 0.8 Twix Master Foods Middle 0.6 0.6 0.7 0.7 East FZE Quality Street Nestlé SA 0.7 0.7 0.7 0.7 Bahlsen Bahlsen GmbH & Co KG 0.6 0.6 0.6 0.7 Lusine Western Bakeries Co 0.4 0.5 0.5 0.6 Loacker Loacker SpA, A 0.5 0.5 0.5 0.6 Jumboo Batterjee Foodstuffs 0.7 0.6 0.6 0.5 Factory Nestlé Classic Nestlé SA 0.6 0.6 0.5 0.5 London Dairy International 0.2 0.3 0.4 0.5 Foodstuffs Co Mövenpick Saudi Dairy & Foodstuff 0.6 0.5 0.5 0.5 Co Ltd (SADAFCO) Halwani Halwani Bros Co 0.5 0.5 0.5 0.5 Guylian Chocolaterie Guylian NV 0.5 0.5 0.5 0.5 Al Rabie Al Rabie AlSaudia Dairy 0.5 0.4 0.2 - Co Ltd Artisanal 36.0 36.2 36.3 36.5 Private label Private Label 3.1 3.0 3.0 3.0 Others 28.6 28.4 28.0 27.7 Total 100.0 100.0 100.0 100.0 Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


Table 25 Forecast Sales of Impulse and Indulgence Products by Sector: Volume 2009-2014

2009 2010 2011 2012 2013 2014 Confectionery ( tonnes) 71,890.6 75,197.0 78,560.4 81,982.9 85,355.7 88,628.2 Pastries ( tonnes) 168,731.9 177,970.3 185,778.9 193,372.0 200,841.3 207,997.1 Cakes ( tonnes) 57,116.1 59,423.0 61,706.4 64,002.3 66,257.6 68,378.0 Biscuits ( tonnes) 86,472.2 91,086.4 95,680.3 100,215.3 104,588.4 108,680.7 Ice cream ('000 litres) 70,299.5 73,347.9 76,338.0 79,219.0 82,053.1 84,697.1 Sweet and savoury 64,045.7 67,158.1 70,521.1 74,140.2 78,206.4 82,873.4 snacks ( tonnes) Snack bars ( tonnes) 709.7 791.4 871.7 951.8 1,031.8 1,108.4 Impulse and indulgence - - - - - - products (not calculable) Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


Table 26 Forecast Sales of Impulse and Indulgence Products by Sector: Value 2009-2014

SR million 2009 2010 2011 2012 2013 2014 Confectionery 3,264.5 3,381.8 3,505.9 3,634.3 3,767.2 3,906.5 Pastries 3,455.4 3,578.5 3,698.8 3,818.6 3,936.0 4,068.3 Cakes 1,450.0 1,481.1 1,511.3 1,540.1 1,573.1 1,608.9 Biscuits 1,554.8 1,646.0 1,739.8 1,835.5 1,930.0 2,021.8 Ice cream 1,263.7 1,254.6 1,257.3 1,287.2 1,322.7 1,364.9 Sweet and savoury snacks 1,398.2 1,494.3 1,600.5 1,714.1 1,844.5 1,997.7 Snack bars 47.5 52.1 56.9 61.7 66.5 71.2 Impulse and indulgence 12,434.2 12,888.4 13,370.5 13,891.4 14,439.8 15,039.3 products Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


Table 27 Forecast Sales of Impulse and Indulgence Products by Sector: % Volume Growth 2009-2014



% volume growth 2013/14 2009-14 CAGR 2009/14 TOTAL Confectionery 3.8 4.3 23.3 Pastries 3.6 4.3 23.3 Cakes 3.2 3.7 19.7 Biscuits 3.9 4.7 25.7 Ice cream 3.2 3.8 20.5 Sweet and savoury snacks 6.0 5.3 29.4 Snack bars 7.4 9.3 56.2 Impulse and indulgence products - - - Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


Table 28 Forecast Sales of Impulse and Indulgence Products by Sector: % Value Growth 2009-2014

% constant value growth 2009-14 CAGR 2009/14 TOTAL Confectionery 3.7 19.7 Pastries 3.3 17.7 Cakes 2.1 11.0 Biscuits 5.4 30.0 Ice cream 1.6 8.0 Sweet and savoury snacks 7.4 42.9 Snack bars 8.4 49.8 Impulse and indulgence products 3.9 21.0 Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


NUTRITION/STAPLES – KEY TRENDS AND DEVELOPMENTS

Headlines

• Current value sales rose by 12% in 2009 to approach an impressive SR32 billion

• Demand remains high for all nutrition/staples products, despite rising unit prices and the economic slowdown

• Oils and fats is the most dynamic category in 2009 with current value sales up by 24% to reach SR3 billion

• 2009 sees strong increases in unit price across many sectors, particularly oils and fats

• Almarai Co Ltd maintains its position as the largest and best-performing company in 2008; the company’s value share increased by around one percentage point over the year to near 11%

• Constant value sales are forecast to show a healthier CAGR of close to 5% to approach SR40 billion towards the end of 2014

Trends

• Consumer demand for all nutrition/staples products remained high and dynamic in 2009, despite rising unit prices and the economic slowdown. The majority of Saudi consumers enjoy high per capita and disposable incomes and many nutrition/staples products such as bread, rice and dairy products are considered to be basic necessities in all Saudi Arabians’ daily diets. Demographic factors such as the rapid population growth rate, alongside the Kingdom’s strong economy which tackled the global financial crisis successfully, both assured steady growth in all nutrition/staples product types.

• Suppliers, namely local giants such as Almarai Co Ltd and Saudi Vegetable Oil & Ghee Co (SAVOLA), as well as multinational companies such as Al Safi Danone Ltd and Nestlé SA, played a major role in



developing nutrition/staples products and maintaining dynamism in many categories through aggressive new product development processes, advertising campaigns and in-store promotions. The main areas of focus in their activities included health-orientated products such as low fat/fat free products, pro/pre biotic products and vitamin-enriched products. Packaging was also another important area for development with PET packs being the fastest growing packaging type among nutrition/staples products overall (increasingly featuring in dairy products, oils and fats and even dried processed food).

• Nutrition/staples products in Saudi Arabia do not face any notable threats from other categories such as meal solutions, sales and growth of which remained relatively small in 2009. This indicates the very strong Saudi Arabian consumer preference towards fresh produce for traditional products such as dairy products (namely yoghurt and cheese), bread and rice, the largest and most popular product categories in nutrition/staples in 2009. Nonetheless, Saudi consumers, in particular those from the younger generation who enjoyed better education and awareness, are showing increased interest year on year in more ‘modern’ types of food, such as breakfast cereals, spreads, meal replacement products, pasta and noodles.

• In a continuation of the trend from the previous year, current value sales grew rapidly in 2009, outpacing the average growth rate of the review period. Despite the slight decline in the wholesale price of many raw materials such as wheat, vegetable and seed oil and milk towards the end of 2009, unit prices showed further increases during the year, yet at a lower rate than 2008’s rise.

• Oils and fats was the most dynamic category in terms of sales growth in current value terms, which stood at massive 24% in 2009. Despite the appreciable development of palm oil production, the country is still largely dependent on imported raw oils such as corn oils, sunflower oil, olive oil and other types of oil needed for food production. In terms of volume sales growth, baby food maintained its position as the most dynamic category thanks to demographic factors including a strong birth rate and a high proportion of children aged 0-14, improvements in distribution in the grocery channel and the rising number of women joining the workforce.


• Artisanal production accounted for the largest portion of sales in 2008, at more than 11% of retail value sales. This was mainly a result of traditional production and distribution patterns, which remain embedded in the country, namely for the largest individual product type, bread. Bread has long been produced and sold from small and often family-run local bakeries. However in a continuation of the trend demonstrated over the review period, artisanal continued losing share to key large brands present across all product types including bread.

• Competition within nutrition/staples is very intense, characterised by local producers holding the major share of value sales. Local producers appeared dominant in the largest categories, where products are consumed daily by Saudi Arabians. These included mainly Almarai Co Ltd in dairy products, Al Muhaidib Grains Co in rice, Saudi Vegetable Oil & Ghee Co (SAVOLA) in oils and fats and Herfy Food Service Co Ltd and Al Rasheed Food Co in bread. Such local giants enjoy many competitive edges in terms of pricing, production capacity, product variety and distribution. Producers such as Almarai Co Ltd and Saudi Vegetable Oil & Ghee Co (SAVOLA) also outperformed the competition through aggressive advertising and promotional campaigns as well as new product launches and innovations.

• Multinationals featured strongly in many sectors/categories where the market is largely reliant on imported merchandise and domestically produced brands were absent. These included, for example, Kellogg Co and Nestlé SA in breakfast cereals, Unilever Group in meal replacement products and Wyeth-Ayerst International in baby food. Multinationals with joint ventures also appeared dominant in many product areas, such as Al Safi Danone Ltd in dairy products, Saudi Food Industries Co Ltd in baby food and Bestfoods Saudi Arabia in oils and fats. Saudi consumers perceive international brands to stand for high quality and taste, although many are offered at very affordable prices.

• Almarai Co Ltd maintained its position as the largest and best-performing company in 2008. The company continued to grow rapidly in its core business, dairy products, with strong gains achieved in cheese, yoghurt and milk through product diversification, expansion in production capacity and aggressive advertising campaigns for its brand Al Marai. The company benefited from its innovative products, which included variants of its Zady brand in yoghurt in 2007, Al Marai Lacto-free in milk and Bon Sweet in other dairy products, and in 2008 Al Marai Trim in drinking yoghurt and Al Marai Mira, Al Marai Cheddar Classic and Al Marai Halloum in cheese. The company also strengthened its leading position in butter, benefiting from the continued boycott of its major competitor, Danya Foods Ltd (Arla Foods Amba).



• Key losers in 2008 included Al Safi Danone Ltd, Nestlé SA and Danya Foods Ltd. Al Safi Danone lost share in milk and yoghurt to Almarai Co and was unable to achieve any notable presence in the largest and most dynamic dairy product type, cheese; Nestlé lost share in powder milk due to massive competition from the range of low-priced brands introduced over 2007/2008 from local trading companies; Danya Foods Ltd also suffered from the continued boycott of Danish products and from increased threats from local suppliers such as Almarai Co Ltd and National Agricultural Development Co (NADEC). The share held by private label products also slipped significantly in 2008 with losses in the rice category amongst others.

Prospects

• In addition to demographic and buoyant macroeconomic factors continuing to drive sales, growth factors will include shifting lifestyles and a strong product diversification process, with increased demand for products with value-added features as well as health-positioned products, particularly among the large number of people suffering from obesity and excessive weight in the Kingdom. On the other hand, emerging sectors such as breakfast cereals, meal replacement products and spreads will maintain their fast momentum due to further improvements in penetration among Saudis.

• Unit prices, which reached sky-high levels across all product types during 2008/2009, are projected to start declining gradually throughout the forecast period in a number of key categories due to global commodity price declines for basic food materials such as grains and milk. Government plans set out recently, to invest in the cultivation of a range of essential cereals in countries with low production costs such as Sudan and Egypt, are also likely to help to reduce the prices of cereals and grains.

• Key areas of potential company activity will continue to be seen in health-orientated products such as low fat/fat-free products, low-sugar/sugar-free products and pro/pre biotic products. Health-orientated products such as Al Marai Trim (Almarai Co Ltd) and Activia (Al Safi Danone Ltd) in yoghurt, Sahvita (Sahary Food Industries Co) and Americana Hamra from National Food Co (Americana) in bread and Kellogg’s Special K (Kellogg Co) and Fitness (Nestlé SA) in breakfast cereals are all expected to achieve strong gains over the forecast period. New product development focusing on health issues will drive such trends strongly. From the consumer side, the forecast period is also likely to see a stronger shift towards health and wellness products as bad eating habits and diseases such as obesity, hypertension and diabetes are all reaching alarming proportions.

Sector Data

Table 29 Sales of Nutrition/Staples by Sector: Volume 2004-2009

'000 tonnes 2004 2005 2006 2007 2008 2009 Bread 2,659.0 2,753.1 2,848.5 2,945.5 3,041.6 3,137.4 Breakfast cereals 10.3 11.3 12.3 13.4 14.5 15.6 Dairy products - - - - - - Meal replacement products 0.0 0.1 0.1 0.1 0.1 0.1 Oils and fats 215.0 224.4 234.4 245.1 256.1 266.6 Baby food - - - - - - Spreads 21.3 22.5 23.8 25.2 26.7 28.3 Pasta 29.0 29.6 30.6 33.2 35.4 37.3 Noodles 22.1 23.3 24.6 26.4 28.0 29.3 Rice 988.4 1,004.3 1,038.7 1,092.7 1,154.7 1,217.5 Nutrition/staples - - - - - - Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


Table 30 Sales of Nutrition/Staples by Sector: Value 2004-2009

SR million 2004 2005 2006 2007 2008 2009 Bread 4,286.8 4,493.3 4,706.0 5,094.3 6,152.8 7,058.4 Breakfast cereals 253.9 278.1 307.4 340.8 404.0 473.5



Dairy products 7,405.7 7,829.0 8,315.9 9,135.6 10,586.7 11,429.4 Meal replacement products 5.0 5.7 6.6 7.5 8.8 10.6 Oils and fats 1,440.9 1,567.3 1,660.2 1,893.3 2,442.3 3,039.5 Baby food 762.4 868.5 1,034.5 1,318.6 1,799.2 2,167.4 Spreads 453.4 480.5 509.1 550.1 635.8 721.2 Pasta 170.6 176.0 183.5 196.8 211.6 225.8 Noodles 267.6 281.9 303.9 327.9 349.8 370.7 Rice 4,263.0 4,446.3 4,614.1 4,920.6 5,576.1 6,014.6 Nutrition/staples 19,309.2 20,426.6 21,641.1 23,785.5 28,167.0 31,511.3 Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


Table 31 Sales of Nutrition/Staples by Sector: % Volume Growth 2004-2009

% volume growth 2008/09 2004-09 CAGR 2004/09 TOTAL Bread 3.2 3.4 18.0 Breakfast cereals 7.4 8.6 51.3 Dairy products - - - Meal replacement products 8.6 10.6 65.2 Oils and fats 4.1 4.4 24.0 Baby food - - - Spreads 5.9 5.8 32.4 Pasta 5.3 5.2 28.6 Noodles 4.9 5.9 33.0 Rice 5.4 4.3 23.2 Nutrition/staples - - - Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


Table 32 Sales of Nutrition/Staples by Sector: % Value Growth 2004-2009

% current value growth 2008/09 2004-09 CAGR 2004/09 TOTAL Bread 14.7 10.5 64.7 Breakfast cereals 17.2 13.3 86.5 Dairy products 8.0 9.1 54.3 Meal replacement products 21.2 16.0 110.4 Oils and fats 24.5 16.1 110.9 Baby food 20.5 23.2 184.3 Spreads 13.4 9.7 59.1 Pasta 6.7 5.8 32.3 Noodles 6.0 6.7 38.5 Rice 7.9 7.1 41.1 Nutrition/staples 11.9 10.3 63.2 Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


Table 33 Company Shares of Nutrition/Staples 2004-2008

% retail value rsp Company 2004 2005 2006 2007 2008 Almarai Co Ltd 7.6 8.1 9.2 9.9 10.7 Al Muhaidib Grains Co 4.6 5.2 5.9 6.2 6.1 Al Safi Danone Ltd 6.2 6.4 6.6 6.1 5.3 Nestlé SA 4.2 4.0 4.0 4.0 3.8 Saudi Vegetable Oil & 3.5 3.5 3.1 2.9 3.3 Ghee Co (SAVOLA)



Saudi New Zealand Milk 1.9 1.9 2.3 2.3 2.3 Products Co Ltd Saudi Dairy & Foodstuff 3.0 2.9 2.8 2.7 2.3 Co Ltd (SADAFCO) Sunrice Australia Pty Ltd 1.8 1.9 1.9 1.9 1.9 National Agricultural 1.6 1.7 1.8 1.9 1.9 Development Co (NADEC) Al Othman Agricultural 1.3 1.3 1.6 1.6 1.5 & Processing Co Al-Muhaidib Foods 1.1 1.1 1.4 1.6 1.5 Kraft Jacobs Suchard Ltd 1.4 1.3 1.4 1.3 1.3 Emirates Refinery Co Ltd 0.2 0.4 0.7 1.1 1.3 Wyeth-Ayerst 0.6 0.8 0.9 1.0 1.3 International Sunbulah Food & Fine 1.2 1.2 1.3 1.3 1.2 Pastries Manufacturing Co Ltd Saudi Food Industries 1.2 1.1 1.1 1.2 1.1 Co Ltd Deemah - United Food 1.0 0.9 1.2 1.1 1.1 Industries Corp Ltd National Food 1.0 1.0 1.0 1.1 1.1 Industries Co Ltd Danya Foods Ltd 3.9 3.9 1.2 1.4 1.1 Herfy Food Service Co Ltd 0.6 0.7 0.8 0.8 0.9 Ajwa Grain Trading Co 3.0 2.9 1.4 0.9 0.9 Pinehill Arabia Food Ltd 0.8 0.9 0.9 0.9 0.8 Western Bakeries Co 0.5 0.6 0.6 0.6 0.8 Nutricia SA 0.3 0.4 0.5 0.7 0.8 Halwani Bros Co 0.7 0.7 0.8 0.8 0.8 Bestfoods Saudi Arabia 1.0 0.9 0.9 0.8 0.8 Al Rasheed Food Co 0.6 0.6 0.7 0.7 0.7 Abbott Laboratories Inc 0.4 0.4 0.4 0.5 0.6 Kellogg Co 0.5 0.5 0.6 0.6 0.6 Gulf Vegetable Oil Co Ltd 0.6 0.6 0.5 0.5 0.4 Artisanal 12.5 12.2 11.9 11.6 11.3 Private Label 10.4 9.8 9.9 9.6 9.0 Generics 0.1 0.1 0.1 0.1 0.1 Others 20.8 20.2 20.7 20.4 21.2 Total 100.0 100.0 100.0 100.0 100.0 Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


Table 34 Brand Shares of Nutrition/Staples 2005-2008

% retail value rsp Brand Company 2005 2006 2007 2008 Al Marai Almarai Co Ltd 8.1 9.1 9.8 10.7 Al Safi Al Safi Danone Ltd 4.9 5.0 4.5 3.8 Muhaidib Al Muhaidib Grains Co 3.0 3.3 3.5 3.5 Saudia Saudi Dairy & Foodstuff 2.8 2.7 2.6 2.3 Co Ltd (SADAFCO) Nido Nestlé SA 2.2 2.3 2.2 2.1 Sun White Sunrice Australia Pty Ltd 1.9 1.9 1.9 1.9 Nadec National Agricultural 1.7 1.8 1.9 1.8 Development Co (NADEC) Afia Saudi Vegetable Oil & 1.8 1.7 1.5 1.7 Ghee Co (SAVOLA) Two Girls Al-Muhaidib Foods 1.1 1.4 1.6 1.5 Nada Al Othman Agricultural 1.3 1.5 1.5 1.5 & Processing Co Pride Deemah - United Food 0.9 1.1 1.1 1.1 Industries Corp Ltd



Kraft Kraft Jacobs Suchard Ltd 1.0 1.1 1.0 1.0 Anchor Saudi New Zealand Milk 0.7 0.9 1.0 1.0 Products Co Ltd Luna National Food 0.8 0.9 1.0 1.0 Industries Co Ltd Al Arabi Saudi Vegetable Oil & 0.9 0.8 0.8 0.9 Ghee Co (SAVOLA) Herfy Herfy Food Service Co Ltd 0.7 0.8 0.8 0.9 Cérélac Saudi Food Industries 0.8 0.8 0.9 0.9 Co Ltd Indomie Pinehill Arabia Food Ltd 0.9 0.9 0.9 0.8 Lusine Western Bakeries Co 0.6 0.6 0.6 0.8 Mazola Bestfoods Saudi Arabia 0.9 0.8 0.8 0.8 Al Rasheed Al Rasheed Food Co 0.6 0.7 0.7 0.7 S-26 Wyeth-Ayerst International 0.4 0.4 0.5 0.6 Halwani Halwani Bros Co 0.6 0.7 0.6 0.6 Bebelac Nutricia SA 0.3 0.4 0.5 0.6 Nour Emirates Refinery Co Ltd 0.2 0.3 0.5 0.6 Kiri Saudi New Zealand Milk 0.5 0.5 0.5 0.5 Products Co Ltd Similac Abbott Laboratories Inc 0.3 0.4 0.4 0.5 Rashaqa Al Safi Danone Ltd 0.7 0.7 0.6 0.5 Puck Danya Foods Ltd 1.4 0.4 0.6 0.5 Al Shifa Sunbulah Food & Fine 0.5 0.5 0.5 0.5 Pastries Manufacturing Co Ltd Artisanal 12.2 11.9 11.6 11.3 Private label Private Label 9.8 9.9 9.6 9.0 Others 35.6 33.8 33.4 34.2 Total 100.0 100.0 100.0 100.0 Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


Table 35 Forecast Sales of Nutrition/Staples by Sector: Volume 2009-2014

'000 tonnes 2009 2010 2011 2012 2013 2014 Bread 3,137.4 3,233.1 3,328.3 3,423.0 3,516.9 3,608.7 Breakfast cereals 15.6 16.7 17.7 18.7 19.7 20.7 Dairy products - - - - - - Meal replacement products 0.1 0.1 0.1 0.1 0.1 0.1 Oils and fats 266.6 276.9 287.0 298.0 309.9 323.0 Baby food - - - - - - Spreads 28.3 29.8 31.4 33.0 34.6 36.2 Pasta 37.3 39.4 41.8 44.3 47.1 50.2 Noodles 29.3 30.7 32.0 33.6 35.3 37.2 Rice 1,217.5 1,287.9 1,363.8 1,437.1 1,519.3 1,600.3 Nutrition/staples - - - - - - Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


Table 36 Forecast Sales of Nutrition/Staples by Sector: Value 2009-2014

SR million 2009 2010 2011 2012 2013 2014 Bread 7,058.4 7,331.8 7,597.4 7,857.5 8,107.6 8,353.9 Breakfast cereals 473.5 505.2 535.7 567.1 599.0 631.6 Dairy products 11,429.4 11,561.9 11,939.0 12,401.6 12,926.3 13,511.1 Meal replacement products 10.6 11.5 12.5 13.4 14.3 15.3 Oils and fats 3,039.5 3,129.8 3,201.7 3,286.7 3,379.2 3,499.0



Baby food 2,167.4 2,357.6 2,539.9 2,709.4 2,873.4 3,023.0 Spreads 721.2 749.6 783.5 819.0 857.0 893.1 Pasta 225.8 241.3 259.2 279.1 302.2 328.8 Noodles 370.7 392.7 415.3 440.8 468.6 500.6 Rice 6,014.6 6,501.0 7,051.9 7,605.1 8,241.2 8,910.4 Nutrition/staples 31,511.3 32,782.4 34,336.0 35,979.7 37,768.9 39,666.9 Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


Table 37 Forecast Sales of Nutrition/Staples by Sector: % Volume Growth 2009-2014

% volume growth 2013/14 2009-14 CAGR 2009/14 TOTAL Bread 2.6 2.8 15.0 Breakfast cereals 5.0 5.9 32.9 Dairy products - - - Meal replacement products 5.4 6.5 37.0 Oils and fats 4.2 3.9 21.2 Baby food - - - Spreads 4.7 5.1 28.2 Pasta 6.5 6.1 34.5 Noodles 5.5 4.9 26.9 Rice 5.3 5.6 31.4 Nutrition/staples - - - Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


Table 38 Forecast Sales of Nutrition/Staples by Sector: % Value Growth 2009-2014

% constant value growth 2009-14 CAGR 2009/14 TOTAL Bread 3.4 18.4 Breakfast cereals 5.9 33.4 Dairy products 3.4 18.2 Meal replacement products 7.6 44.3 Oils and fats 2.9 15.1 Baby food 6.9 39.5 Spreads 4.4 23.8 Pasta 7.8 45.6 Noodles 6.2 35.0 Rice 8.2 48.1 Nutrition/staples 4.7 25.9 Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


MEAL SOLUTIONS – KEY TRENDS AND DEVELOPMENTS

Headlines

• Meal solutions record a steady growth rate close to 6% in current value sales to SR4.2 billion in 2009

• The increased prices of many fresh products during 2008/2009 is encouraging larger numbers of consumers, particularly those on low incomes, to switch to these alternatives

• Ready meals is the most dynamic category in 2009 with healthy growth of 7% in current value terms, to surpass SR33 million

• Unit prices saw relatively moderate increases in comparison with other packaged food categories



• National Food Co (Americana) retains its position as the leading and best performing company in meal solutions; the company’s share increased to almost 9% in 2009

• Value sales are expected to grow at a healthier CAGR of over 6% in constant terms over the forecast period, to reach SR5.7 billion

Trends

• Meal solutions grew steadily in 2009. The increased prices of many fresh produce items during 2008/2009 encouraged a larger number of consumers, particularly those on lower incomes, to switch to these products which are perceived to offer a cheaper alternative.

• Despite the economic downturn, growth in 2009 was similar to the strong average annual rate seen over the review period. A key factor continuing to influence overall sales was the demographic nature of the Kingdom, with more than 25% of the population being foreign expatriates living in the country. Saudi Arabia has a diversified expatriate community made up of different nationalities from different continents including Arabs, Asians, and Westerners. The number of expatriates continued to increase in 2009 and suppliers responded to growing demand through intensive product diversification. This has had a very positive impact on meal solutions sales during the review period due to the fact that each distinct consumer group prefers to purchase particular cuisines.

• In a continuation of the trends of the previous year, movements in unit prices across all meal solution products were minor in 2009, thanks to the strong penetration of locally produced brands and private label products across many categories. This had a positive impact on sales growth, as many Saudi Arabian consumers demonstrated a strong shift towards these cheap and convenient alternatives to fresh produce.

• Ready meals was the fastest growing category in 2009, sales of which were up by around 7% in 2009 in current value terms. Albeit from a low base, this growth is primarily the result of the strong performance demonstrated in canned/preserved ready meals, the largest and most dynamic product type within ready meals. Convenience and the wider availability of tuna flavours, including Mexican salad with tuna, sweetcorn with tuna, rice with tuna, and beans with tuna, in addition to the affordable unit price, makes products within this category appealing to a wide consumer group.

• Impressive and continual improvements in distribution patterns also played a major role in maintaining dynamism across many sectors. The recent rapid increase in the number of modern retail outlets, namely supermarkets/hypermarkets, enabled many emergent products as well as many trendy and innovative products within ready meals, frozen processed food and chilled processed food to be readily accessible to a receptive population.


• Meal solutions is a highly fragmented environment, characterised by the dominance of local producers that are able to compete in terms of price, production capacity, distribution and product variety. The top four companies in 2008 ranking position were: National Food Co (Americana), the leading company in frozen processed food; Saudi Food Industries Co Ltd, the leading company in soup; National Food Industries Co Ltd, the leading company in canned/preserved food; and Halwani Bros Co, the leading company in chilled processed food.

• National Food Co (Americana) was able to maintain its position as the largest and best performing company in meal solutions, extending its value share by half a percentage point over the year to almost 9% in 2008. The company led sales of frozen processed food and ranked second and fourth in chilled processed food and ready meals. The company attributes its success to a combination of factors including quality control, wide distribution, increased availability, product variety and brand equity. National Food Co (Americana) remains a very strong competitor in the marketplace and has adopted an intensive advertising and marketing strategy, including satellite television advertising and in-store promotions to ensure increased demand for its products.

• Despite the strong performances achieved by local producers with local brands, foreign suppliers (either with local manufacturing facilities such as Nestlé SA through its joint-ventured company, Saudi Food Industries Co Ltd, or those supplying the market through imports such as Bolton Alimentari SpA) were able to maintain their strong presence in this category. Saudi Food Industries Co Ltd, which led sales of soup through its flagship brand Maggi, and Bolton Alimentari SpA, through its best-selling ready meals brand



Rio Mare, were able to excel through aggressive television advertising and attractive in-store promotions offering consumers free gifts, for example, with multi-packs.

• The most notable advertising campaign during 2009 was launched by Sadia SA. The company, which operates in frozen processed food, aimed to reinvigorate its position and strength in this arena through aggressive television advertising focusing on its high quality frozen processed products and through product diversification to cover areas other than its core business in frozen processed red meat. For example, in 2009 the company entered frozen ready meals, offering a range of frozen pizzas.

• Private label products have achieved appreciable penetration through many product types, particularly in canned/preserved food where pricing is the main factor in determining purchases. The main operators in private label included leading chained retailers such as Carrefour, Azizia Panda, Al Othaim and Al Sadhan. The share held by private label grew steadily from 2003 to 2006, however, a significant drop in share occurred at the end of the review period due to increased competition from aggressively advertised and promoted economy brands from leading local suppliers such as National Food Co (Americana) and National Food Industries Co Ltd.

Prospects

• Meal solutions is projected to exhibit a healthier performance over the forecast period than that witnessed during the review period. Several factors will contribute to this performance, including the expected increased activity from local producers in terms of advertising and promotional campaigns, as well as new product launches and product diversification in terms of flavour variety. Continual development in distribution patterns, namely within the supermarkets/hypermarkets channel, accompanied by increasing consumer preference for more convenient products, will also stimulate sales, sustaining rapid growth.

• Ready meals will retain its position as the most dynamic category over the forecast period, constant value sales of which are projected to grow by around 9% per annum between 2009 and 2014. Albeit from a low base, strong demand will be largely driven by the young, working consumer group who also drive the changes in lifestyle towards Westernisation, modernisation and convenience. The demographic nature of the country, with foreign expatriates representing around 25% above of the total Saudi population in 2009, alongside the constant increase in employment rates of Saudi women, will also be important growth factors.

• Potential forecast period threats to growth will continue to come from nutrition/staples, the largest category in packaged food, with expected sales calculated to approach an impressive SR40 billion in constant terms by the end of 2014, compared to SR5.7 billion for meal solutions in the same year. Despite the gradual shift towards modern and convenient alternatives offered by meal solutions products, consumer preferences remain strongly in favour of nutrition/staples due to the nature of the traditional Saudi diet. Suppliers operating within the nutrition/staples categories are projected to continue focusing on the health benefits that such products offer compared to the processed food available within the meal solutions category

• Ongoing company expansion strategies, particularly in terms of local manufacturers, are likely to have an impact across a number of categories within meal solutions, including frozen processed food, ready meals and chilled processed food. Leading local suppliers such as Halwani Bros Co in chilled processed food, National Food Co (Americana) in frozen processed food and Sunbulah Food & Fine Pastries Manufacturing Co Ltd in ready meals, will continue to grasp the opportunity created by the absence of strong multinationals to expand their presence through increasing capacity, improving distribution and broadening their product offer.

Sector Data

Table 39 Sales of Meal Solutions by Sector: Volume 2004-2009

'000 tonnes 2004 2005 2006 2007 2008 2009 Ready meals 0.8 0.9 1.0 1.1 1.1 1.2 Canned/preserved food 85.4 89.3 92.2 95.6 99.4 102.8 Frozen processed food 37.0 38.9 40.8 43.0 45.0 46.9 Dessert mixes 3.2 3.3 3.3 3.4 3.6 3.7 Dinner mixes - - - - - - Chilled processed food 9.7 10.3 10.7 11.3 12.1 12.7



Sauces, dressings and 65.0 68.3 72.6 77.0 81.1 84.7 condiments Soup 2.3 2.4 2.5 2.7 2.9 3.0 Meal solutions 202.6 212.4 222.1 233.0 244.1 253.8 Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


Table 40 Sales of Meal Solutions by Sector: Value 2004-2009

SR million 2004 2005 2006 2007 2008 2009 Ready meals 21.7 24.5 26.8 29.0 31.3 33.5 Canned/preserved food 1,005.6 1,048.8 1,079.7 1,123.1 1,185.7 1,246.7 Frozen processed food 684.6 720.6 755.0 789.1 848.1 900.4 Dessert mixes 59.1 60.0 61.5 62.6 66.5 69.4 Dinner mixes - - - - - - Chilled processed food 272.9 287.9 307.1 324.5 363.2 385.3 Sauces, dressings and 1,071.1 1,121.4 1,188.7 1,255.4 1,333.8 1,408.1 condiments Soup 92.9 96.2 102.4 110.0 117.5 124.2 Meal solutions 3,186.2 3,335.0 3,494.4 3,664.7 3,914.9 4,134.2 Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


Table 41 Sales of Meal Solutions by Sector: % Volume Growth 2004-2009

% volume growth 2008/09 2004-09 CAGR 2004/09 TOTAL Ready meals 5.0 7.6 44.3 Canned/preserved food 3.4 3.8 20.3 Frozen processed food 4.1 4.9 26.7 Dessert mixes 3.2 2.8 15.0 Dinner mixes - - - Chilled processed food 5.5 5.6 31.3 Sauces, dressings and condiments 4.4 5.4 30.3 Soup 4.4 5.6 31.1 Meal solutions 4.0 4.6 25.3 Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


Table 42 Sales of Meal Solutions by Sector: % Value Growth 2004-2009

% current value growth 2008/09 2004-09 CAGR 2004/09 TOTAL Ready meals 6.9 9.1 54.2 Canned/preserved food 5.2 4.4 24.0 Frozen processed food 6.2 5.6 31.5 Dessert mixes 4.5 3.3 17.5 Dinner mixes - - - Chilled processed food 6.1 7.1 41.2 Sauces, dressings and condiments 5.6 5.6 31.5 Soup 5.7 6.0 33.7 Meal solutions 5.6 5.3 29.8 Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,




Table 43 Company Shares of Meal Solutions 2004-2008

% retail value rsp Company 2004 2005 2006 2007 2008 National Food Co 7.5 7.4 8.0 8.3 8.8 (Americana) Saudi Food Industries 6.6 6.9 7.0 7.0 7.1 Co Ltd National Food 6.5 6.7 6.8 6.8 6.8 Industries Co Ltd Halwani Bros Co 5.3 6.0 5.8 5.4 5.7 Gulf Food Industries 3.8 4.1 4.4 4.4 4.5 Bolton Alimentari SpA 2.8 3.0 3.1 3.3 3.4 Al Munajjam Meat Factory 2.1 2.2 2.1 2.1 2.3 Pure Food Ltd 1.0 1.5 1.8 2.2 2.3 Saudi Dairy & Foodstuff 2.1 2.0 2.0 1.9 2.0 Co Ltd (SADAFCO) Nashar Meat Co 2.4 2.5 2.6 1.9 1.9 Sunbulah Food & Fine 1.7 1.8 1.9 1.8 1.8 Pastries Manufacturing Co Ltd Al Watania Poultry Farms 1.4 1.4 1.5 1.6 1.6 Saudi Fisheries Co 1.6 1.6 1.7 1.7 1.6 American Garden 1.6 1.5 1.5 1.5 1.5 Products Inc Jufaila Co 1.3 1.3 1.2 1.4 1.5 Kawasho Thailand 1.3 1.4 1.3 1.4 1.4 Nestlé SA 1.2 1.3 1.3 1.3 1.3 Botan Seafoods Thailand 1.5 1.4 1.3 1.2 1.3 Heinz Co, HJ 1.7 1.6 1.4 1.3 1.2 Batterjee Foodstuffs 1.2 1.3 1.3 1.2 1.2 Factory Bestfoods Saudi Arabia 1.0 1.0 1.1 1.1 1.1 Food Products Co Saudi 1.0 1.0 1.1 1.1 1.1 Arabia Safcol Holdings 1.3 1.3 1.2 1.1 1.1 (Thailand) Co Ltd Mujally Ahmed Bamujally 1.4 1.3 1.1 1.1 1.0 United Co Mansour Factory 0.7 0.8 0.8 0.9 0.9 Sadia SA 0.8 0.7 0.7 0.8 0.8 Al Othman Agricultural 0.6 0.7 0.8 0.8 0.8 & Processing Co Global Food Industries 0.6 0.6 0.7 0.7 0.7 UAE Conservas Modernies 0.6 0.6 0.7 0.7 0.7 Chtura Zamil Food Industrial Ltd 1.3 1.1 1.0 0.9 0.7 Private Label 7.6 8.0 8.4 8.3 7.8 Others 28.4 25.8 24.8 25.0 23.9 Total 100.0 100.0 100.0 100.0 100.0 Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


Table 44 Brand Shares of Meal Solutions 2005-2008

% retail value rsp Brand Company 2005 2006 2007 2008 Americana National Food Co 7.4 8.0 8.3 8.8 (Americana) Maggi Saudi Food Industries 5.9 6.0 6.1 6.2 Co Ltd



Halwani Halwani Bros Co 5.2 5.1 4.7 4.9 California Garden Gulf Food Industries 4.1 4.4 4.4 4.5 Rio Mare Bolton Alimentari SpA 3.0 3.1 3.3 3.4 Luna National Food 3.4 3.5 3.5 3.4 Industries Co Ltd Green Farm National Food 2.4 2.4 2.4 2.5 Industries Co Ltd Mehran Pure Food Ltd 1.5 1.8 2.2 2.3 Saudia Saudi Dairy & Foodstuff 2.0 2.0 1.9 2.0 Co Ltd (SADAFCO) Sunbulah Sunbulah Food & Fine 1.7 1.7 1.7 1.6 Pastries Manufacturing Co Ltd Al Watania Al Watania Poultry Farms 1.4 1.5 1.6 1.6 Al Asmak Saudi Fisheries Co 1.6 1.7 1.7 1.6 American Garden American Garden 1.5 1.5 1.5 1.5 Products Inc Al Jazzar Nashar Meat Co 2.0 2.0 1.5 1.5 Geisha Kawasho Thailand 1.4 1.3 1.4 1.4 Annadia Al Munajjam Meat Factory 1.2 1.2 1.3 1.4 Al Kabeer Jufaila Co 1.2 1.2 1.3 1.4 Botan Botan Seafoods Thailand 1.4 1.3 1.2 1.3 Kowais Batterjee Foodstuffs 1.3 1.3 1.2 1.2 Factory Safcol Safcol Holdings 1.3 1.2 1.1 1.1 (Thailand) Co Ltd Habra Al Munajjam Meat Factory 0.9 0.9 0.9 0.9 National Foods National Food 0.9 0.8 0.9 0.9 Industries Co Ltd Pamasco Mansour Factory 0.8 0.8 0.9 0.9 Sadia Sadia SA 0.7 0.7 0.8 0.8 Gloria Mujally Ahmed Bamujally 0.9 0.8 0.8 0.8 United Co Al Areesh Global Food Industries UAE 0.6 0.7 0.7 0.7 Chtura Conservas Modernies Chtura 0.6 0.7 0.7 0.7 Al Zamil Zamil Food Industrial Ltd 1.1 1.0 0.9 0.7 Baity ATTCO Inc 0.7 0.6 0.6 0.7 Top Top Halwani Bros Co 0.7 0.6 0.7 0.7 Private label Private Label 8.0 8.4 8.3 7.8 Others 32.9 31.9 32.0 30.8 Total 100.0 100.0 100.0 100.0 Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


Table 45 Forecast Sales of Meal Solutions by Sector: Volume 2009-2014

'000 tonnes 2009 2010 2011 2012 2013 2014 Ready meals 1.2 1.2 1.3 1.4 1.5 1.6 Canned/preserved food 102.8 106.6 110.9 115.8 121.3 127.4 Frozen processed food 46.9 48.9 51.2 53.8 56.6 59.6 Dessert mixes 3.7 3.8 3.9 4.1 4.3 4.5 Dinner mixes - - - - - - Chilled processed food 12.7 13.4 14.1 14.8 15.7 16.6 Sauces, dressings and 84.7 88.6 92.9 97.7 103.0 108.8 condiments Soup 3.0 3.2 3.3 3.5 3.7 3.9 Meal solutions 253.8 264.4 276.4 289.8 304.6 320.8 Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


Table 46 Forecast Sales of Meal Solutions by Sector: Value 2009-2014



SR million 2009 2010 2011 2012 2013 2014 Ready meals 33.5 36.1 39.1 42.6 46.5 50.9 Canned/preserved food 1,246.7 1,305.6 1,366.7 1,436.9 1,507.6 1,586.1 Frozen processed food 900.4 959.5 1,028.9 1,106.8 1,195.9 1,292.9 Dessert mixes 69.4 72.9 76.9 81.0 85.8 90.9 Dinner mixes - - - - - - Chilled processed food 385.3 408.5 433.6 462.3 496.3 532.5 Sauces, dressings and 1,408.1 1,491.7 1,587.9 1,694.5 1,816.4 1,950.6 condiments Soup 124.2 132.2 141.6 152.5 164.3 178.2 Meal solutions 4,134.2 4,370.5 4,635.6 4,934.0 5,266.3 5,631.2 Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


Table 47 Forecast Sales of Meal Solutions by Sector: % Volume Growth 2009-2014

% volume growth 2013/14 2009-14 CAGR 2009/14 TOTAL Ready meals 6.8 6.4 36.3 Canned/preserved food 5.0 4.4 23.9 Frozen processed food 5.4 4.9 27.2 Dessert mixes 4.5 4.0 21.7 Dinner mixes - - - Chilled processed food 6.1 5.5 30.6 Sauces, dressings and condiments 5.6 5.1 28.5 Soup 6.0 5.3 29.6 Meal solutions 5.3 4.8 26.4 Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


Table 48 Forecast Sales of Meal Solutions by Sector: % Value Growth 2009-2014

% constant value growth 2009-14 CAGR 2009/14 TOTAL Ready meals 8.7 52.0 Canned/preserved food 4.9 27.2 Frozen processed food 7.5 43.6 Dessert mixes 5.5 30.9 Dinner mixes - - Chilled processed food 6.7 38.2 Sauces, dressings and condiments 6.7 38.5 Soup 7.5 43.4 Meal solutions 6.4 36.2 Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews,


DEFINITIONS This report analyses the market for packaged food in Saudi Arabia. For the purposes of the study, the market has been defined as follows:

• Confectionery

• Bakery products



• Ice cream

• Dairy products

• Sweet and savoury snacks

• Snack bars

• Meal replacement products

• Ready meals

• Soup

• Pasta

• Noodles

• Canned/preserved food

• Frozen processed food

• Dried processed food

• Chilled processed food

• Oils and fats

• Sauces, dressings and condiments

• Baby food

• Spreads Explanations of Saudi Arabian words and/or terminology used in this report are as follows:

• GCC: Gulf Cooperation Council.

• Ramadan: the period of 30 days of fasting from sunrise to sunset that is obligatory for Muslims.

• Hajj: the pilgrimage to Mecca that takes place at the end of Ramadan.

• Omrah: the pilgrimage to Mecca that takes place at any time during the year.

• Halva or Halawa: made of crushed sesame, sugar (or honey) and nuts and served as a dessert (sweet).

• Hummus: traditional dip made from chick peas.

• M’tabbal: a type of dip made from smashed egg plant, yoghurt and tahina.

• Laban: drinking yoghurt.

• Maamol: a type of pastry filled with crushed dates.

• Tahina: paste of crushed sesame seeds, vinegar, garlic, lemon juice and olive oil, served as a condiment (savoury).

• Shabura: a very popular bread substitute that is consumed largely by Saudis. It is similar to rusks, available in many variants such as brown, roasted and original, and is commonly consumed with dips or with tea. The bulk of Shabura sales traditionally come from freshly prepared products sold in local bakeries. However, a noticeable shift towards branded products is strongly evident; examples of packaged brands include Americana from National Food Co (Americana) and Herfy from Herfy Food Service Co Ltd.

• UAE: United Arab Emirates.

• SAVOLA: abbreviated name for Saudi Vegetable Oil & Ghee Co.

• Sunbulah: abbreviated name for Sunbulah Food & Fine Pastries Manufacturing Co Ltd.

• SADAFCO: abbreviated name for Saudi Dairy & Foodstuff Co Ltd.

• Nadec: abbreviated name for National Agricultural Development Co.



• Saudisation: the government policy of actively employing or promoting Saudi Arabian nationals to positions formerly occupied by expatriate workers.

Sources used during research include the following:

Summary 1 Research Sources

Official Sources Astra Food processing

Central Depet of Statistics

Jeddah Chamber of Commerce & Industry

Ministry of Commerce & Industry

USDA Foreign Agreculture Services

Trade Press Al Eqtisadyah Daily

Al Jazirah Daily

Al Riyadh Daily

Al Sharq Al Awsat

Al Watan Daily

Al Yaum Daily

Alam Al Eqtisad Economic Magazine

Arab News

Arab News Daily

Arabian Business

Baking & Snacking International

Caterer ME

Caterer ME magazine

Dairy Industries International

Economic World Magazine

Food & Drink

Guld Marketing Review

Gulf Industry Magazine

Gulf Marketing Review

Gulf News

Middle East Daily

Middle East Food Magazine

Middle East Grocer

Okaz Daily

Retail Middle East

Retail News ME

Retail News Middle East

Source: Euromonitor International

packaged food - saudi arabia

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