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Kuwait Food & Drink Report Q1 2012
Business Monitor International, Nov 2011, Pages: 76
We remain very positive on our outlook for Kuwait, as it continues to be a relatively stable country in an increasingly volatile region. For the time being, we are retaining our positive outlook on Kuwait’s economy heading into 2012. Heavy public spending, both directly and through its impact on private consumption and fixed investment, will contribute to a relatively robust expansion of GDP next year. On the back of rising oil production, we are revising up our forecast for real GDP growth in 2011 from 5.3% to 6.1%, while we are sticking to our forecast for real GDP growth of 5.5% in 2012.
We continue to expect that the Kuwaiti government’s KWD31.0bn development plan will have a positive impact on the Kuwait’s economy. The five-year plan, initiated in February 2010, is an attempt to strengthen the country’s non-hydrocarbon private sector through large investments in infrastructure, health and education. We expect these policies to impact positively on the country’s growth prospects – and in particular its outlook for private consumption, which we expect to grow by an average of 4.8% year-on-year (y-o-y) in the period 2012-2015.
Headline Industry Data
- 2011 food consumption growth in local currency = 7.7%; forecast to 2016 = 29.8%
- 2011 per capita food consumption growth = 2.5%; forecast to 2016 = 16.1
- 2011 soft drink sales growth = 1.8%; forecast to 2016 = 24.1%
- 011 hypermarket sales growth = 7.5%; forecast to 2016 = 51.6%
Key Industry Trends
Growing Investments in Concept Chains: In October 2011, Epicure Group, the food and beverage arm of The Sultan Group, announced plans to open a new burger chain restaurant in Kuwait. While the name of the restaurant chain has not yet been revealed, the concept will be a sophisticated burger restaurant; the company is working with Thomas Klein International, a Dubai-based restaurant consultant.
Géant Plans Regional Expansions: In September 2011, French hypermarket chain Géant, operated by retail giant Casino, announced plans for a major expansion throughout the Middle East. According to Arif Shaikh, managing director of Géant’s operations in the Middle East, the company plans to open five hypermarkets and 30 smaller stores over the next three years in Bahrain, Kuwait and the UAE, its key Gulf markets. Within two years, the company is also planning on entering Qatar and Oman. He went on to say that Géant has embarked on an aggressive expansion plan since the financial crisis brought down real estate prices throughout the region.
Key Risks To Outlook
Growing Unrest: Although political unrest in Kuwait has not been on a scale comparable to other countries in the Gulf region, notably nearby Bahrain, levels of discontent appear to be rising heading into 2012. In particular, anti-government sentiment has been aroused by controversy over a corruption scandal involving several members of parliament; thousands of Kuwaitis have come out to protest against the regime. We see a growing possibility that this unrest could translate into more pronounced political instability in Kuwait.
Business Monitor International's Kuwait Food and Drink Report provides industry professionals and strategists, corporate analysts, food and drink associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Kuwait's food and drink industry.
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