Gulfood 2014 and some emerging markets.

Well it’s certainly been an eventful start to 2014 and after the mayhem that is Gulfood we look forward to a few quiet weeks in the office as we complete our data for Jordan, Libya and other markets.

Those who traversed the Halls of Sheikh Saeed 1, 2, 3 will no doubt have come across the energy drinks stands of some of the biggest manufacturers in the region. As live DJ’s blasted out tunes, energy drinks were available for all those passing, to help lift the sometimes flagging spirits. Manufacturers from the Gulf, Europe, US and Asia all flock to the region given the growth figures of energy drinks across all markets in the GCC. The news after Gulfood that Saudi Arabia has restricted the sale of energy drinks in education, health and government facilities, among other places, follows earlier restrictions in European countries such as France, Denmark and Norway more than a decade ago, though they are now available in all European countries. Consumers will still be able to purchase Red Bull and other energy drinks in the Kingdom, however the ban is expected to have an impact on sales. Of bigger concern to Red Bull and other energy drinks suppliers may be the complete ban on the advertising of energy drinks and sponsorship of events. Red Bull in particular sponsors a large number of events across the region with ‘Red Bull Flugtag Flying Challenge’ and others now being outlawed.

Update on Iraq

Even though carbonated soft drinks have doubled in per capita consumption in Iraq over the last 5 years and still bottled water consumption has almost tripled, the uncertain nature of this market remains prohibitive for many companies. With a large and growing population (33 million) with low per capita consumption and an underdeveloped retail market, Iraq could be a booming market in a few short years. Iraq is struggling to increase its attractiveness as a business environment, though public corruption remains a barrier for many companies looking to do business here. Iraq is improving it’s ranking on the Corruption Perception Index and if this trend continues we could well see further investment of foreign companies in Iraq. News of the Dubai Chamber of Commerce opening a representative office in the Kurdistan region of Iraq certainly signals intent from the UAE to help grow this underdeveloped market.

Per Capita Consumption Iraq and Neighbouring Countries (litres)

2012

CSD

JNSD

Packaged Water

Dilute Drinks

Malt Beverages

IRAQ

50

13

28

0.5

1.3

JORDAN

40

15

72

1

0.6

IRAN

27

13

14

2

4

KSA

67

38

169

5

3.9

KUWAIT

70

38

93

6

4

 

Source: ManSci estimates.

We were pleased to see a number of exhibitors from Iranian companies at Gulfood 2014. From our trip to Iran earlier this year, where we experienced the heaviest snowfalls in five decades, it was good to see a number of our partners enjoying the warm weather afforded by Dubai in February. The high cost of local production is driving Iranian exports around the GCC region where consumers can afford the higher prices. The lifting of some US-led trade restrictions in 2013 saw Iranian products appearing in various markets, including DAITY doogh in Kuwait, Kalleh doogh in UAE and TAKDANEH juice and nectar in UAE.

 

We look forward to delivering further news on the growth of markets in Iraq and Iran as we continue to publish data and reports for these two interesting markets.

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