Saudi Arabia Food Market

Q1 2018
www.bmiresearch.com
SAUDI ARABIA
FOOD & DRINK REPORT
INCLUDES 5-YEAR FORECASTS TO 2021
Published by:BMI Research

Saudi Arabia Food & Drink Report Q1 2018
INCLUDES 5-YEAR FORECASTS TO 2021
Part of BMI’s Industry Report & Forecasts Series
Published by: BMI Research
Copy deadline: October 2017
ISSN: 1749-2920
BMI Research © 2017 Business Monitor International Ltd

2 Broadgate Circle All rights reserved.
London
EC2M 2QS All information contained in this publication is
United Kingdom copyrighted in the name of Business Monitor
Tel: +44 (0) 20 7248 0468 International Ltd, and as such no part of this
Fax: +44 (0) 20 7248 0467 publication may be reproduced, repackaged,
Email: subs@bmiresearch.com redistributed, resold in whole or in any part, or used
Web: http://www.bmiresearch.com in any form or by any means graphic, electronic or
mechanical, including photocopying, recording,
taping, or by information storage or retrieval, or by
any other means, without the express written consent
of the publisher.
DISCLAIMER
All information contained in this publication has been researched and compiled from sources believed to be accurate and reliable at the time of
publishing. However, in view of the natural scope for human and/or mechanical error, either at source or during production, Business Monitor
International Ltd accepts no liability whatsoever for any loss or damage resulting from errors, inaccuracies or omissions affecting any part of the
publication. All information is provided without warranty, and Business Monitor International Ltd makes no representation of warranty of any kind
as to the accuracy or completeness of any information hereto contained.
CONTENTS
BMI Industry View ............................................................................................................... 7

Latest Updates And Industry Developments ................................................................................................... 7
SWOT .................................................................................................................................... 9
Food & Drink ........................................................................................................................................... 9
Industry Forecast .............................................................................................................. 11

Food ..................................................................................................................................................... 11
Latest Updates ....................................................................................................................................... 11
Structural Trends ................................................................................................................................... 12
Table: Food Sales (Saudi Arabia 2014-2021) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Drink .................................................................................................................................................... 14
Latest Updates ....................................................................................................................................... 14
Table: Non-Alcoholic Drinks Sales (Saudi Arabia 2014-2021) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Mass Grocery Retail ................................................................................................................................ 18
Latest Updates ....................................................................................................................................... 18
Industry Risk/Reward Index ............................................................................................. 20

MENA Food & Drink (Food & Non-Alcoholic Drinks) Risk/Reward Index ......................................................... 20
Market Overview ............................................................................................................... 29

Food ..................................................................................................................................................... 29
Recent Developments .............................................................................................................................. 29
Market Drivers And Trends ...................................................................................................................... 29
Drink .................................................................................................................................................... 33
Mass Grocery Retail ................................................................................................................................ 35
Competitive Landscape .................................................................................................... 36

Table: Key Players In Saudi Arabia's Food And Drink Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Table: Key Players In Saudi Arabia's Mass Grocery Retail Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Company Profile ................................................................................................................ 38

Panda Retail Company (Savola Group) ....................................................................................................... 38
Almarai ................................................................................................................................................. 41
Al Rabie Saudi Foods ............................................................................................................................... 44
Aujan Group Holding ............................................................................................................................... 46
© Business Monitor International Ltd Page 4

Carrefour MAF ....................................................................................................................................... 48

LuLu (EMKE Group) ............................................................................................................................... 50
Saudia Dairy & Foodstuff Company (SADAFCO) .......................................................................................... 53
Demographic Forecast ..................................................................................................... 56

Demographic Outlook .............................................................................................................................. 56
Table: Population Headline Indicators (Saudi Arabia 1990-2025) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Table: Key Population Ratios (Saudi Arabia 1990-2025) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Table: Urban/Rural Population & Life Expectancy (Saudi Arabia 1990-2025) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Table: Population By Age Group (Saudi Arabia 1990-2025) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Table: Population By Age Group % (Saudi Arabia 1990-2025) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Glossary ............................................................................................................................. 61
Food & Drink ........................................................................................................................................ 61
Mass Grocery Retail ............................................................................................................................... 61
Methodology ...................................................................................................................... 63
Food & Drink (Non-Alcoholic Drinks) Risk/Reward Index ............................................................................... 64
Table: Food & Drink (Alcoholic Drinks) Risk/Reward Index, Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Food & Drink (Alcoholic Drinks) Risk/Reward Index ..................................................................................... 68
Table: Food & Drink (Alcoholic Drinks) Risk/Reward Index, Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

BMI Industry View

BMI View: Saudi Arabia's food and drink sector faces a number of challenges which will dampen growth
prospects for investors over the short term. Anaemic economic growth, combined with new regulations such
as the selective tax on sugary drinks and tobacco and restrictions on non-Saudi employees in the grocery
retail sector, raise the risks for companies operating in the market. We maintain a more optimistic outlook
over the back end of our 2017-2021 forecast period as the economy picks up in line with oil prices, with
Saudi Arabia offering one of the largest and most youthful consumer bases in the MENA region.
Food And Drink Spending

(2014-2021)
250,000
200,000
150,000
100,000
50,000
0
2014 2015 2016e 2017f 2018f 2019f 2020f 2021f
Food, sales, SARmn Non-alcoholic drinks, sales, SARmn
e/f = BMI estimate/forecast. Source: BMI, national statistics
Latest Updates And Industry Developments

■ The Saudi Arabian economy will fall into recession in 2017 before returning to modest growth in 2018.
With our expectations for oil sector growth to remain in negative territory in the second half of 2017, and
for the government's paring back of fiscal consolidation measures to only slowly feed through to stronger
consumer spending, we are now forecasting a recession of 0.5% in 2017, before gradually picking up to
1.3% in 2018.
■ Saudi Arabia's Ministry of Labour and Social Development has confirmed plans to ban foreign workers
from jobs in grocery stores by 2020. The move is part of the kingdom's wider 'Saudisation' agenda which
aims to reduce unemployment among Saudi nationals. We believe this poses a downside risk to
investment by grocery retailers as it will increase operating costs and drive up wage pressures.

■ Soft drink companies operating in Saudi Arabia are lowering prices and rolling out smaller can sizes in an
effort to mitigate against weaker demand following the introduction of 100% selective tax on sugary and
energy drinks in June 2017.
■ As part of Vision 2030 and the Kingdom's wider economic diversification efforts, Saudi Arabia's food
processing sector will continue to attract considerable investment, particularly in key segments such as
dairy and halal.
■ Looking beyond the short-term economic slowdown, premiumisation and rising health awareness will
fuel dynamism in Saudi Arabia's food and drink market over our five-year forecast period, as consumers
increasingly adopt Western-influenced consumption patterns.

SWOT
Food & Drink
SWOT Analysis
Strengths ■
Saudi Arabia is by far the largest market in the Gulf region, with a youthful population
of over 32mn.
■
Saudi Arabia is a good regional point of entry for investors seeking long-term volume
growth.
■
Like the rest of its Gulf peers, Saudi Arabia is home to a significant expatriate
population, providing a market for high-value packaged and processed foods.
■
High disposable incomes among a proportion of the population have created an
aspirational consumer base interested in premium products.
Weaknesses ■
Saudi Arabia has no formal alcoholic drinks industry.
■
The severe constraints on women's public participation inhibit their ability as a
demographic to maximise consumer spending power.
■
The private sector's dependence on expatriate labour, as well as the government's
'Saudisation' efforts, are a burden for potential investors.
■
Food manufacturers are highly dependent on imports for ingredients owing to the
country's severe agricultural shortcomings.
■
Weaker consumer sentiment could slow near-term premium spending.
Opportunities ■
Demand for processed and packaged goods among Saudi consumers is set to
continue increasing as tastes and preferences evolve and lifestyles become busier.
■
Long-term opportunities for premiumisation remain across all segments of the food
industry.
■
Rising health consciousness has significantly increased opportunities for food
producers that are able to introduce 'healthy' or 'light' options.

SWOT Analysis - Continued
Threats ■
Popular boycotts, particularly of Western brands, can be very damaging, as a
country's politics can severely influence consumption in the Middle East.
■
Persisting low oil prices could negatively affect government spending thus
undermining business and consumer confidence.

Industry Forecast
Food
BMI View: Saudi Arabia's consumers will come under pressure over 2017 as the economy falls into
recession. We expect consumers to cut back on premium food brands and place greater emphasis on
staples/private-label products on the back of the weak economic growth trajectory. With that said, we note
that food benefits from being an essential spending category, and that growth will therefore
remain positive, albeit well-below previous years.
Latest Updates
■ The Saudi Arabian economy will fall into recession in 2017 before returning to modest growth in 2018.
With our expectations for oil sector growth to remain in negative territory in the second half of 2017 and
for the government's paring back of fiscal consolidation measures to only slowly feed through to stronger
consumer spending, we are now forecasting a recession of 0.5% in 2017, before gradually picking up to
1.3% in 2018.
■ We forecast food sales to grow 3.7% in 2017, with a CAGR of 5.6% between 2017 and 2021. While we
expect growth to strengthen from 2018 onwards, this is considerably below the 9.4% CAGR recorded
between 2010 and 2015.
Food Sales
(2014-2021)
250,000 10
200,000
8
150,000
100,000
4
50,000
0 2
2014 2015 2016e 2017f 2018f 2019f 2020f 2021f
Food, sales, SARmn (LHS) Food, sales, SARmn, % growth y-o-y (RHS)

Structural Trends
We maintain the view that the Saudi Arabian economy will enter into recession and contract by 0.5% in
2017, as cuts in oil production agreed to at the November OPEC meeting severely weigh on headline
growth. As fiscal consolidation and oil production cuts hit economic activity, we expect consumer spending
to experience slower growth over the short term and to struggle to recover to pre-2015 rates. We forecast
real household spending growth to grow at a tepid rate of 1.0% y-o-y in 2017.
With business and consumer confidence under pressure, weaker economic activity will weigh on the growth
of employment in the private sector, while government officials (based on announcements in October 2016)
will be faced with wage cuts and suspended bonuses, while ministers face 20% salary cuts. This will further
deter consumer spending over our short-term outlook.
We forecast food sales to grow 3.7% in 2017, with a CAGR of 5.6% between 2017 and 2021. While we
expect growth to strengthen from 2018 onwards, this is considerably below the 9.4% CAGR recorded
between 2010 and 2015. This slowdown in spending can be attributed to consumers cutting back on higher-
value premium products, with greater emphasis on local markets and private label goods.
Nonetheless, Saudi Arabia's food sector does benefit from a sizeable population of around 33mn, with an
average household of 6.4 persons in 2017. This, combined with the fact that food is an essential spending
category, means Saudi Arabia's food and drink sector will remain relatively resilient during the weaker
consumer environment compared to other retail sectors.
Saudi Arabia's population is expected to reach roughly 34.9mn by 2021, (up from 30.9mn in 2014) making
it the only market in the Gulf region that can realistically provide investors with long-term volume growth
potential. Despite moves to increase indirect taxes such a VAT in the GCC, in an attempt to offset the sharp
decline in oil revenues, premiumisation will remain an important growth factor in Saudi Arabia. Saudi
Arabia's expatriate population is expected to be one of the key drivers for premiumisation. The upside of
this is that Saudi Arabia is also much less reliant on attracting expatriates to maintain the size of the
consumer base than markets, such as the UAE.
Looking beyond the short-term slowdown, we expect sustainable growth in the domestic food industry to
spill over into the wider region, with high-performing local companies Almarai and Savola increasingly
looking to expand operations throughout the Gulf. With the country's growing infrastructure investment, we
expect improved transport and logistics networks to support regional trade. The government is encouraging
private investment in the region in order to enhance its economic ties with key allies.

Table: Food Sales (Saudi Arabia 2014-2021)
2014 2015 2016e 2017f 2018f 2019f 2020f 2021f
Food, sales, SARmn 133,450.7 144,948.6 151,751.6 157,341.2 166,723.2 176,996.5 187,904.8 199,114.6
Food, sales, SARmn, 8.4 8.6 4.7 3.7 6.0 6.2 6.2 6.0
% growth y-o-y
Bread, rice and 18,539.0 19,948.6 21,041.8 21,948.4 23,486.8 25,194.6 27,033.3 28,949.2
cereals, sales, SARmn
Bread, rice and 12.3 7.6 5.5 4.3 7.0 7.3 7.3 7.1
cereals, sales,
SARmn, % growth y-
o-y
Pasta products, sales, 3,073.6 3,544.6 3,612.8 3,663.6 3,738.5 3,806.0 3,861.7 3,902.6
SARmn
Pasta products, sales, -6.2 15.3 1.9 1.4 2.0 1.8 1.5 1.1
SARmn, % growth y-
o-y
Baked goods, sales, 1,764.9 1,864.2 1,922.2 1,968.2 2,042.3 2,119.1 2,195.9 2,269.8
SARmn
Baked goods, sales, 6.1 5.6 3.1 2.4 3.8 3.8 3.6 3.4
SARmn, % growth y-
o-y
Meat and Poultry, 41,664.6 44,766.5 47,039.6 48,916.6 52,085.2 55,580.3 59,319.3 63,190.6
sales, SARmn
Meat and Poultry, 11.0 7.4 5.1 4.0 6.5 6.7 6.7 6.5
sales, SARmn, %
growth y-o-y
Fish and fish 8,475.0 9,851.7 10,352.3 10,765.6 11,463.4 12,233.2 13,056.7 13,909.4
products, sales,
SARmn
Fish and fish 2.6 16.2 5.1 4.0 6.5 6.7 6.7 6.5
products, sales,
SARmn, % growth y-
o-y
Dairy, sales, SARmn 15,499.8 17,574.1 18,360.9 19,005.3 20,082.8 21,257.1 22,497.8 23,766.4
Dairy, sales, SARmn, 3.2 13.4 4.5 3.5 5.7 5.8 5.8 5.6
% growth y-o-y
Oils and Fats, sales, 5,359.8 5,561.2 5,822.3 6,036.8 6,396.9 6,791.2 7,209.8 7,640.1
SARmn
Oils and Fats, sales, 13.5 3.8 4.7 3.7 6.0 6.2 6.2 6.0
SARmn, % growth y-
o-y
Fresh and preserved 15,989.5 17,215.9 18,070.6 18,775.4 19,963.3 21,270.9 22,666.9 24,109.3
fruit, sales, SARmn
Fresh and preserved 10.4 7.7 5.0 3.9 6.3 6.6 6.6 6.4
fruit, sales, SARmn, %
growth y-o-y
Fresh vegetables, 11,960.3 12,759.2 13,274.2 13,692.8 14,386.5 15,133.7 15,913.5 16,700.8
sales, SARmn

Food Sales (Saudi Arabia 2014-2021) - Continued
2014 2015 2016e 2017f 2018f 2019f 2020f 2021f
Fresh vegetables, 8.1 6.7 4.0 3.2 5.1 5.2 5.2 4.9
sales, SARmn, %
growth y-o-y
Sugar and sugar 5,855.4 6,183.1 6,331.0 6,444.9 6,621.1 6,793.0 6,952.4 7,092.4
products, sales,
SARmn
Sugar and sugar 3.9 5.6 2.4 1.8 2.7 2.6 2.3 2.0
products, sales,
SARmn, % growth y-
o-y
Other food products, 5,268.9 5,679.5 5,923.9 6,123.6 6,456.3 6,817.5 7,197.3 7,584.0
sales, SARmn
Other food products, 7.9 7.8 4.3 3.4 5.4 5.6 5.6 5.4
sales, SARmn, %
growth y-o-y
Drink
BMI View: Given the country's total ban on alcohol consumption, Saudi Arabia's non-alcoholic drinks
market will drive industry growth. Despite weak economic conditions over the short-term, we expect
premiumisation and rising health awareness to fuel dynamism in the market over our five-year forecast
period, as consumers increasingly adopt Western-influenced consumption patterns. We expect investment
across new product ranges to pick up from 2018 onwards, with particularly strong growth opportunities for
fruit and vegetable juices.
Latest Updates
■ We have modestly revised our carbonates growth forecasts for Saudi Arabia in response to the
introduction of a 100% selective tax on energy drinks and a 50% tax on sugary soft drinks in June
2017. Consumers will likely shift their consumption patterns and look for cheaper healthier alternatives,
while companies have lowered prices to help offset the slowdown in sales.
■ Low-income consumers will be hardest hit by the selective tax. However, incomes are relatively high in
Saudi Arabia, and we believe the majority of consumers can afford to pay the additional SAD1.75
(USD0.5) (average cost of Coke/Pepsi 0.33 litres size).
■ Non-alcoholic drinks sales (local currency) are forecast to grow 3.7% in 2017, reaching nearly SAR14bn
(USD3.7bn), with a compound annual growth rate (CAGR) of 5.6% to 2021.
■ Fruit and vegetable juices sales will experience the fastest growth of 8.5% CAGR over the next five years
to 2021.

Structural Trends
Alcoholic Drinks
Saudi Arabia has some of the Gulf region's most severe alcoholic drinks restrictions. Saudi law does not
tolerate the consumption or distribution of alcoholic drinks to any extent, meaning that alcoholic drinks are
not sold in hotels or restaurants. However, there is a demand and illegal channels exist. There are also
opportunities for producers of non-alcoholic beers and malt-based beverages.
Non-Alcoholic Drinks
The soft drinks sub-sector is by far the most important and dynamic in Saudi Arabia's drinks industry. The
country's hot and arid climate and the ban on the sales of alcoholic drinks have given the sub-sector a major
boost. Saudi Arabia's soft drinks industry is easily the region's largest in volume and value terms, which
comes as no surprise given the size of the population. Local consumers tend to be both brand loyal and
aspirational, and are increasingly interested in new and innovative products.
Non-Alcoholic Drinks Sales

(2014-2021)
20,000 10
15,000 8
10,000 6
5,000 4
0 2
2014 2015 2016e 2017f 2018f 2019f 2020f 2021f
Non-alcoholic drinks, sales, SARmn (LHS)
Non-alcoholic drinks, sales, SARmn, % growth y-o-y (RHS)

Carbonated soft drinks remain an important non-alcoholic drinks segment in Saudi Arabia, accounting for
close to 30% of the overall soft drinks value sales in 2017. Opportunities remain prevalent, particularly in
the low-calorie segment, largely owing to rising health-consciousness and very high rates of obesity and
diabetes in the country.
Due to rising health awareness, the demand for healthier food and drink options will rise across the Gulf
Cooperation Council (GCC) region. In June 2017, Saudi Arabia introduced a 100% tax on energy drinks
and a 50% tax on other sugary soft drinks (eg, carbonates). The tax marks a big change in policy for the
kingdom, which has traditionally kept taxation minimal but now plans a series of levies, including VAT, by
2020 to close a fiscal budget gap that totalled SAR297bn in 2016. The regressive nature of the tax means
lower-income consumers will be hardest hit, particularly as these consumers tend to purchase carbonated
drinks on a frequent basis, often due to a lack of awareness of health concerns such as obesity.
The introduction of the tax will result in a shift in consumer preferences, away from energy drinks and
carbonates and towards healthier products, such as fruit and vegetable juices. We forecast strong growth
over our five-year forecast period for fruit and vegetable juice sales, growing by a CAGR of 8.5% to 2021.
We expect that rising disposable income as well as a high expatriate population in the country will boost
growth of healthier foods as international companies increase investment in Saudi Arabia. In January 2016,
US-based Company Del Monte announced its plans to expand its operations across the region by acquiring
farms in Saudi Arabia and Jordan. With its increasing investment in fruit and vegetable farms, the company
is able to meet and benefit from rising demand for healthy foods across the region. In 2015, Del Monte
launched a range of healthy foods, such as fruit smoothies and juices, for the retail market in Saudi Arabia.
Fruit juice sales are also increasingly driven by the fast food sector, which has now switched to serving its
meals with juice rather than carbonated soft drinks.
As in the wider Gulf region, bottled water sales have risen sharply in Saudi Arabia over the past decade,
driven by rising incomes. Concerns over the safety of tap water and Saudi Arabia's hot climate provide a
great environment for the bottled water industry. Also, a big trend over the period was the performance of
bulk water, which includes home filtration systems. As a result of growing investment in home filtration
systems, bottled water sales growth will lag behind other categories over 2017 to 2021 growing at a CAGR
of 5.9%. However, the share of mineral water sales will remain the highest at around 50% of total soft
drinks sales.
Saudi Arabia's increasingly Westernised lifestyle, driven by a large youth population, will boost the hot
drinks industry, with coffee becoming increasingly popular. European-style cafes will grow with the rise in

Westernisation in the country, with El Farouki Coffee Centre among the country's leading coffee houses,
and growing demand for instant coffee is also giving opportunities for international giant Nestlé to penetrate
the market.
Table: Non-Alcoholic Drinks Sales (Saudi Arabia 2014-2021)
2014 2015 2016e 2017f 2018f 2019f 2020f 2021f
Non-alcoholic drinks, sales, 11,826.9 12,862.0 13,474.4 13,977.6 14,822.2 15,747.0 16,729.0 17,738.1
SARmn
Non-alcoholic drinks, sales, 8.6 8.8 4.8 3.7 6.0 6.2 6.2 6.0
SARmn, % growth y-o-y
Coffee, teas and other hot drinks, 6,733.9 7,493.0 7,923.9 8,286.0 8,713.0 9,260.5 9,820.4 10,385.3
sales, SARmn
Coffee, teas and other hot drinks, 13.1 11.3 5.8 4.6 5.2 6.3 6.0 5.8
sales, SARmn, % growth y-o-y
Soft drinks, sales, SARmn 5,093.0 5,369.0 5,550.5 5,691.7 6,109.2 6,486.6 6,908.6 7,352.8
Soft drinks, sales, SARmn, % 3.1 5.4 3.4 2.5 7.3 6.2 6.5 6.4
growth y-o-y
Fruit and vegetable juices, sales, 879.9 1,045.8 1,125.1 1,192.7 1,326.6 1,442.8 1,566.0 1,694.1
SARmn
Fruit and vegetable juices, sales, 12.4 18.9 7.6 6.0 11.2 8.8 8.5 8.2
Mineral or spring waters, sales, 2,589.2 2,742.9 2,811.1 2,883.9 3,079.6 3,293.7 3,481.7 3,744.1
SARmn
Mineral or spring waters, sales, 0.1 5.9 2.5 2.6 6.8 7.0 5.7 7.5
Carbonated drinks, sales, SARmn 1,623.9 1,580.3 1,614.3 1,615.0 1,703.0 1,750.0 1,860.9 1,914.7
Carbonated drinks, sales, 3.5 -2.7 2.2 0.0 5.4 2.8 6.3 2.9

Mass Grocery Retail
BMI View: Despite low consumer confidence stemming from weak economic activity, Saudi Arabia holds
significant expansion opportunities for grocery retailers. The mass grocery retail sector will continue to
benefit from the kingdom's large and growing population size, and its increasing adoption of modern
formalised shopping trends. While hypermarkets/supermarkets dominate, we believe underpenetrated
discount and convenience formats will gain momentum over the longer term as we have seen with
developed markets globally.
Latest Updates
■ Since the government's decision to increase foreign business ownership from 75% to 100% in June 2016,
we hold a favourable outlook for investment in the retail sector over the next five years.
■ Hypermarket and supermarket store formats remain the most prevalent and will continue to dominate the
competitive landscape.
■ Growing demand for convenience retailing will drive an uptick in investment for residential retailing,
though expansion will be gradual.
Structural Trends
We hold a positive outlook for Saudi Arabia's food retailing sector as government moves towards more
investor friendly policies. The decision to allow 100% foreign ownership in the wholesale and retail sector
will attract positive investment from international retailers. In our view, this move will be crucial for growth
in the mass grocery retail (MGR) sector, particularly at a time when business confidence is on a downward
trend.
We believe that Saudi Arabia's MGR sector holds strong growth opportunities driven by a sustainable
consumer base. The country holds a favourable consumer demographic, such as a sizable
population forecast to reach 32.7mn in 2017. The country's young and rapidly growing population,
combined with high per capita food consumption will bode well for food retailers investing in the Saudi
market.
The hypermarket format will continue to dominate the sector, accounting for nearly half of total MGR sales.
Ongoing store launches will support the structural transition from informal to formal retailing in Saudi
Arabia's MGR sector. However, as consumer preferences start to shift, the prevalence of traditional
hypermarket and supermarket formats will begin to face growing competition from the currently under-
developed convenience and discount formats.

As retailers seek to penetrate residential areas and demand for proximity rises, reinforced by the fact that
women in the country are not allowed to drive, convenience stores will become increasingly popular.
Another major driving factor will be continued investments in the sector by leading industry players, and we
expect domestic retailers to lead the formalisation process.
Underlining the strength of the leading Saudi players (especially in hypermarkets), the Gulf region's two
leading hypermarket retailers Carrefour MAF and EMKE-owned Lulu currently play second fiddle. We
believe that market-leader Panda, owned by Savola, is best placed to continue driving the formalisation
process. Having pursued strong non-organic investment over the past few years, it will most likely pursue a
strategy of organic growth in the coming years.
Meanwhile, multi-segment retailer al-Othaim is also strongly positioned with its convenience, hypermarket
and convenience store formats. We expect all three segments to grow considerably over the forecast period
to 2021, shifting the retail segment away from baqalas - local corner stores that remain prevalent across the
kingdom.

Industry Risk/Reward Index

MENA Food & Drink (Food & Non-Alcoholic Drinks) Risk/Reward Index
BMI View: MENA ranks fourth out of six regions globally in our Food and Non-Alcoholic Drinks Risk/
Reward Index. The Middle Eastern sub-region remains the outperformer, occupying the top five MENA
spots. We highlight Morocco as a North Africa bright spot, placing in sixth position in the region and first
in North Africa, outperforming two of the GCC markets.
Middle East Remains Top Pick To North Africa

MENA - Food & Non-Alcoholic Drinks Risk/Reward Heat Map
Note: Scores out of 100; higher score= more attractive market. Source: BMI
Important Note: Our entire Food & Drink Risk/Reward Index (RRI) includes two Food & Drink Risk/
Reward indices: our Food & Non-Alcoholic Drinks RRI and our Alcoholic Drinks RRI. The first
quantifies the risks and rewards associated with food and non-alcoholic drink sales in each country, while
the other quantifies the risks and rewards associated with the alcoholic drinks sector.
Main Regional Features And Latest Updates
■ The Middle East and North Africa (MENA) region is ranked fourth in BMI's Food & Non-Alcoholic
Drinks RRI. The regional average RRI score is 47.0, compared to the global average of 50.0.
■ The UAE remains the most attractive market in the region for food and non-alcoholic drinks in MENA
and is the region's only country to score within the global top 10.
■ Our top five countries in our MENA RRI score above the global average of 50.0.
■ Morocco slips out of the top five, ranking sixth. Its sixth position is worth highlighting, as it far exceeds it
North African regional peers as well as two Gulf Cooperation Council (GCC) markets.

Strong Rewards Balanced With Risks

MENA - Food & Non-Alcoholic Drinks Risk/Reward Index
Note: Scores out of 100; higher score = more attractive market. Source: BMI
Sin Tax: Not A Major Threat To Consumption
The UAE has introduced excise tariffs at a rate of 100% on tobacco and energy drinks, and 50% on sugary
drinks, with the law coming into effect on October 1 2017. Following in the footsteps of Saudi Arabia,
which implemented a similar levy in June 2017, the move towards so-called 'sin taxes' by GCC states aims
to discourage consumption of unhealthy products, while also providing a welcome boost to fiscal revenues
amid the low oil price environment.

Affluent Consumer Able To Absorb Added Cost

UAE - Household Disposable Income Breakdown
100
50
0
2017f 2018f 2019f 2020f 2021f
Households Disposable Income USD1,000-5,000, % total households
Households Disposable Income USD50,000+, % total households
f = BMI forecast. Source: BMI, UAE National Bureau of Statistics
In terms of sales and consumption of carbonates, we believe the overall impact of the excise duty in the
UAE will be limited. We have only slightly adjusted our forecasts for consumption of carbonated drinks in
response to the tax, with the five-year (2017-2021) compound annual growth rate (CAGR) projected to be
4.9%, compared to 5.2% CAGR previously.
Below we outline the key factors behind this modest revision:
■ We were already forecasting slower growth in carbonates relative to other soft drinks categories, such as
mineral water and fruit and vegetable juices, as we were already anticipating health consciousness trends
to prevail in consumption patterns.
■ The tax will have minimal impact on our carbonates forecasts for 2017 given that it does not come into
effect until Q417. We forecast 5.1% y-o-y growth in 2017, down from 5.35% y-o-y previously. We
expect to see a more marked slowdown in growth in 2018, with sales growth slowing by one percentage
point to 4.7% y-o-y.
■ The majority of consumers in the UAE are high earners, with our forecasts showing over three quarters of
the population having disposable incomes of USD25,000-plus in 2017, and 44% with a disposable
income of USD50,000-plus. Given that retail prices of carbonated drinks in the UAE range between
AED1.5 (USD0.40) and AED3 (USD0.80), this level of disposable income is more than sufficient to
absorb a 50% to 100% price increase.

■ The regressive nature of the tax means lower-income consumers will be hardest hit, particularly as these
consumers tend to purchase carbonated drinks on a frequent basis, often due to a lack of awareness of
health concerns such as obesity.
■ Energy drinks such as Red Bull are most exposed. We expect consumers to switch to other beverages for
sources of caffeine, such as coffee or carbonates - which have a lower price point to begin with and are
subject to a 50% rather than 100% tax rate.
UAE Still An Outperformer
The UAE is the MENA region's outperformer in our Food & Non-Alcoholic Drinks RRI, with the country
obtaining a score of 74.0 out of 100. This score places the country in the top 10 globally, finishing in third
position. The UAE is, however, the only MENA state to place within the global top 10, with the region's
second-placed state, Saudi Arabia, trailing the UAE by some distance with a score of 61.7, which equates to
29th place out of 107 states measured worldwide in our RRI.
The UAE's top regional position is earned through high scores for both industry rewards and industry risks,
scoring highly for per capita food and drink spending. While the country and the population might be
relatively small and so the volume of food and drink consumption is lower, the comparative wealth of the
population ensures high spending levels on food and drink. The country also offers growth potential for the
sector, with the household spending real growth outlook over the next five years (2017-2021) projected by
BMI to average an annual increase of 4.1%. The UAE's strong food and drink spending growth outlook
ensures the country's industry reward score of 79.6, which is the highest industry reward score in the region.

UAE Top Market

UAE And MENA RRI Breakdown
Note: Scores out of 100, higher score = more attractive market. Source: BMI
From an industry risks perspective, the UAE benefits from its position as a regional business and logistics
hub. This has meant that the country has developed a robust regulatory framework for international
companies to operate in and a strong infrastructure network, with its airports and ports functioning as
transhipment points, offering companies plenty of supply chain options at competitive rates. The country's
industry risk score of 79.9 is also a high score for the country by comparison to the region.
Morocco Outperforms North Africa And Two GCC Markets
Morocco stands out in our MENA Food and Non-Alcoholic Drinks RRI owing to it high score for North
Africa of 50.5. This places Morocco in sixth place out of 14 MENA markets, far higher than other North
African peers. Morocco ranks first in the sub-region (North Africa) and we also highlight that the country
outperforms two of the GCC countries - Bahrain and Oman. Bahrain scores 44.2 and Oman scores 45.5,
ranking ninth and eighth respectively.

Morocco Offers Large Consumer Base

Selected Countries - Population (mn)
60
40
20
0
2015 2016e 2017f 2018f 2019f 2020f 2021f
Morocco Bahrain Kuwait Oman Qatar
f = BMI forecast. Source: National sources, BMI
Morocco benefits from a large population of over 35mn and an urban population of close to 60%, leading to
a rewards score of 52.8. Although Bahrain and Oman have high urbanisation rates of nearly 90% and 80%
respectively, they each are home to a consumer base of less than 5mn. However, we caution that Morocco's
risks scores reflect the key downside risks to operating in a North African market. Its risks score of 44.9 is
below the two aforementioned GCC countries, due to higher logistics risks and much weaker retail
formalisation.

MENA Food & Non-Alcoholic Drinks Risk/ Reward Index

Rewards & Risks Scores

MENA Food & Non-Alcoholic Drinks Rewards

Industry Rewards & Country Rewards Scores

MENA Food & Non-Alcoholic Drinks Risks

Industry Risks & Country Risks Scores
Note: Scores out of 100, higher score= more attractive market. Source: BMI
Please Note: Our Risk/Reward Indices are updated frequently and, as a result, scores in this section may not
match scores in the rest of the report.

Market Overview
Food
Recent Developments
■ In January 2017, one of the world's largest poultry exporters, Brazil-based BRF, launched its new
subsidiary, Dubai-based One Foods Holdings. Backed by resources from its parent company and other
potential shareholders, One Foods could become the pre-eminent halal meat company in the world,
expanding beyond the Middle East into Asia and Europe over the longer term. We previously highlighted
that the Muslim demographic as an opportunity for consumer-facing companies, as halal products can be
marketed to a population of nearly 2bn people.
■ Saudi Arabia is by far the largest food manufacturer in the GCC, producing over 74% of total food and
dairy produce in the region.
■ As part of Vision 2030 and the Kingdom's wider economic diversification efforts, Saudi Arabia's food
processing sector will continue to attract considerable investment, particularly in key segments such as
dairy and halal.
Market Drivers And Trends
Food Processing
The country's food processing sector will continue to attract strong investment, particularly in key segments
such as dairy, which are contributing to growth in local food consumption as consumers increasingly prefer
higher-value, processed food products. The ongoing development of organised retail channels also
contributes to food consumption growth. The expansion of organised retail will continue to strengthen
internal trade systems, which are expected to contribute to lower overheads and cost savings that can be
passed on to consumers.
As part of Saudi Arabia's Vision 2030 and wider economic diversification efforts, government-endorsed
programmes relating to food security - including King Abdulla's Initiative for Saudi Agricultural Investment
Abroad - have reinforced Saudi Arabia's commitment to become a manufacturing heavyweight, by enabling
domestic food manufactures to compete on an international scale in terms of their product technology, price
and quality.
Like all Gulf Cooperation Council (GCC) countries, Saudi Arabia is highly reliant on food imports, with
about 80% of its food demand met by imports. Meat consumption in the country remains high, and we
forecast that meat and poultry sales will experience positive growth over our forecast period to 2021,
reaching a 6.2% compound annual growth rate (CAGR). This is largely supported by the country's well-
developed poultry segment, which stems from the government's effort to reduce dependence on suppliers.

Furthermore, the country opened up to more export markets by lifting a 15-year ban on French beef in
October 2015. The rise in imports will support the country's growing consumer base as well as strong food
consumption as household spending is sustained over our forecast period.
Dairy Processing
Saudi Arabia's bustling dairy industry has been at the forefront of the food industry's expansion and
continues to grow rapidly. Higher incomes, the increasing use of white goods, growing consumer interest in
healthy eating and the continued emergence of major domestic manufacturers have seen the sector emerge
as a major economic contributor over the past decade.
Saudi Arabia's dairy industry is comfortably the Gulf region's most competitive, and the country's main
dairy companies have invested heavily in vertically integrating their operations. The industry is led by the
increasingly ambitious Almarai, the region's largest dairy company by market value. Almarai's core
competitive advantage is the company's highly developed distribution network. More recently, the company
purchased 12,000 hectares of farmland in Argentina through farm operator Fondomonte in order to beef up
its supply chain. The largest food producer in the Persian Gulf, Almarai produced roughly 1bn litres of milk
in 2013.
In the past, the fresh food industry has suffered due to the inefficient transportation of produce from the
point of production, an issue that Almarai has been working to address through greater investments.
Through a joint venture with the soft drinks giant PepsiCo, Almarai has been expanding beyond the Gulf
region and into the wider Middle East through acquisitions. In addition to Almarai, other prominent players
in the dairy industry include al-Safi Danone and SADAFCO.
Furthermore, improved production practices have been matched by improvements in the standards of
imported cattle, helping transform Saudi Arabia from a dairy importer to a fast-growing dairy exporter.
While the export market remains an important source of revenue for the industry, domestic demand for
dairy remains the primary driver of industry growth. The characteristics of the industry enable it to appeal to
health-conscious Saudi consumers, while economic growth has had a positive impact on the ability of the
average consumer to purchase, and have the means of storing, dairy produce.

Agriculture
In socioeconomic terms, the agricultural sector is crucial to the Saudi economy, as it provides employment
for a significant segment of the population that has little formal education. The majority of agricultural
production in Saudi Arabia is in the north of the country, in areas such as Qasim, Hail and Wadi. The
leading crops include wheat, watermelon, dates and tomatoes.
Wheat production has collapsed since the government changed its support policy at the end of 2007 in a bid
to preserve water resources. The Saudi government intended to reduce state wheat purchases from local
farmers by 12.5% on an annual basis until 2016 (by which time it expected to be totally import dependent).
We see a plummeting trend in line with the reduction of state support to the end of our outlook period to
2021.
Over the review period, Saudi Arabia's agricultural production has remained fairly stable, thanks in part to
the subsidies that were in place. The sector looks likely to expand and this will remain a key government
focus despite objections by critics. However, over the long term, significant advancements are not expected,
with geographic and climatic limitations too severe for the proposed level of government investment to
overcome.
Meanwhile, Saudi Arabia has actively sought to enter into long-term lease agreements with a number of
African countries for agricultural land. The country's agricultural minister has encouraged companies to
invest in farms in Africa as it looks to secure supplies of food imports to replace phased-out local
production. In 2011, Saudi Star Agricultural Development announced plans to invest USD2.5bn by 2020
in the development of a rice-farming project on 10,000 hectares of land in Ethiopia on lease for 60 years,
with plans to rent a further 290,000 hectares from the government.
Halal
The importance of the halal food industry is continuing to grow in the Middle East, with Saudi Arabia
hosting the first international conference on halal food in February 2012 in Riyadh. The long-term outlook
for the halal food industry is captured by the fact that the world's Muslim population represents close to
25% of global population, or over 1.6bn. As investment into the industry increases, competition among
producers will intensify, which will lead to a rise in the output of halal products.

While Middle Eastern consumers traditionally prefer fresh meat, health and hygiene scares have been a
major driver of changing consumer habits and have ultimately benefited the packaged-meat industry. Meat
and halal products are now being imported from many countries, including Australia, New Zealand, Ireland,
Brazil, Canada and the US. In fact, most distributors of halal products are not from Muslim countries, with
many international producers having recognised the potential in the market.
Although it is Malaysia that has taken the lead in developing and modernising this sector, regional
producers have increased production and are slowly reducing the Gulf region's import dependence.
Companies such as UAE-based al-Islami Foods have started to assume the regional mantle.
In January 2017, one of the world's largest poultry exporters, Brazil-based BRF, launched its new
subsidiary, Dubai-based One Foods Holdings. The company will focus solely on halal meat production,
focusing largely on the Middle East and North Africa region, targeting large Muslim economies such as the
UAE and Saudi Arabia.
BRF initially planned to launch an initial public offering (IPO) for One Foods Holdings in April 2017;
however, following disappointing quarterly results, momentum for a public stock listing has lost steam.
According to anecdotal reports, sovereign wealth funds Qatar Investment Authority and the Abu Dhabi
Investment Authority have signalled that they would be more willing to participate in a private placement
of stock than an IPO at this point. A private placement would help increase the value of One Foods, which
is estimated to be around USD6.5bn.
We previously highlighted the Muslim demographic as an opportunity for consumer-facing companies, and
backed by resources from its parent company and other potential shareholders, One Foods could become the
pre-eminent halal meat company in the world, expanding beyond the Middle East into Asia and Europe over
the longer term.
Food Services
The fast food sector continues to be one of the key channels within the consumer food services industry in
Saudi Arabia. We expect growth in this channel to remain strong due to rising purchasing power among
Saudi consumer which is enabling them to increasingly enjoy eating out as leisure activity.
Global fast-food giant McDonald's continues to lead the fast food sector in Saudi Arabia. The firm is
represented by Riyadh International Catering Corp and opened its first restaurant in 1993. Today there are

134 outlets in the Kingdom. Other international brands present in the market include KFC and Pizza Hut.
One of the most successful local chains is Herfy, which was established in 1981 and offers a menu similar
to that of many western fast food chains. It has a total of more than 212 restaurants and 4,000 employees
throughout Saudi Arabia. It also has many subsidiaries including Herfy Bakery and a soon to be built meat
processing plant. Another major local brand is Albaik which was founded in 1974. The restaurant primarily
sells roasted chicken and shrimp with a variety of sauces. There are a total of 68 branches with more than 40
branches in Jeddah where it is headquartered.
Drink
Recent Developments
■ Alcohol is banned in Saudi Arabia under Islamic law, and punishments for drinking alcohol are strictly
applied.
■ Soft drink companies operating in Saudi Arabia are lowering prices and rolling out smaller can sizes in an
effort to mitigate against weaker demand following the introduction of 100% selective tax on sugary and
energy drinks in June 2017.
■ The entrance of chains such as Starbucks and Tim Hortons points to increasing demand for Western-
style caffeinated products.
Alcoholic Drinks
Alcohol is banned in Saudi Arabia under Islamic law, and punishments for drinking alcohol are strictly
applied. Despite this, Saudi Arabia's large expatriate community and Western military personnel serving in
the country are still able to obtain alcohol that is home-brewed or through various routes operating out of
neighbouring Gulf states. This is a point of conflict in the country, with Saudi nationals believing that by
encouraging smuggling, Westerners are not showing respect for Saudi lifestyles and religion.
Soft Drinks
Saudi Arabia's soft drinks industry is increasingly competitive across all segments. Competition within the
carbonates, juices and bottled water sub-sectors is particularly fierce, leading to frequent new product
developments and launches supported by significant marketing and promotional spending.
PepsiCo's core brands (bottled by the National Bottling Company in Saudi Arabia) continue to dominate
the Saudi carbonates market, accounting for more than 70% of volume sales. The Coca-Cola Company's

unfamiliar second-place position in Saudi Arabia, and indeed much of the Middle East region, has
traditionally owed much to regional perceptions and strong geopolitical influences. Although Saudi Arabia
is one of the few notable emerging markets in which Coca-Cola is not a leader, it has progressed
promisingly over the past two decades, having previously been absent from the market.
Saudi Arabia is the Gulf region's largest bottled water market, with a number of prominent domestic
producers accounting for the majority of sales. Leading the domestic contingent is Makkah Water - owner
of the Safa and Mozn brands. UAE-based Masafi is also a major producer of bottled water in the region and
has recently launched a range of premium juices that are being processed and bottled at its plant in the
UAE. Leading players in fruit juices include Almarai, The National Fruit Juice Company and al-Rabi
Saudi Food Company.
Other market entrants into the juice sub-sector include dairy companies al-Safi Danone and SADAFCO.
Meanwhile, Zamzam Cola has entered the carbonates sub-sector, Red Bull is active in energy drinks, and
Nestlé and Coca-Cola are making inroads into bottled water. Red Bull leads the emerging energy drink
market ahead of PepsiCo's Pepsi X brand.
Hot Drinks
Saudi Arabia's hot drinks sector is very mature. Major players within the sector include local manufacturers
Tea Factory and AMS Baeshen & Co, and global major Nestlé. The teabag market is dominated by
Unilever's Lipton Tea brand. Lipton has been available in the Gulf since the 1960s and is particularly
popular. Its ability to innovate and cater to developing consumer preferences sets it apart from its
competitors. Lipton produces a variety of black and green teas from its regional manufacturing headquarters
in Dubai. Its Jebel Ali-based facility is the second largest teabag factory in the world with a production
capacity of around 5bn tea bags per annum.
Lipton has also steadily introduced a range of fruit teas across the Gulf Cooperation Council, and has a
market share in excess of 70%. A steady rise in health consciousness is set to boost tea sales. Coffee is also
widely enjoyed across the country, with the entrance of chains such as Starbucks and Tim Hortons pointing
to increasing demand for Western-style caffeinated products.

Mass Grocery Retail
Recent Developments
■ Saudi Arabia's Ministry of Labour and Social Development is moving ahead with plans to ban foreign
workers from jobs in grocery stores. The move is part of the kingdom's wider 'Saudisation' agenda which
aims to reduce unemployment among Saudi nationals. We believe this poses a downside risk to
investment by grocery retailers as it will increase operating costs and drive up wage pressures.
■ UAE-based EMKE plans to open six Lulu stores in Saudi Arabia over 2017, following the eight
hypermarkets launched in 2016.
■ With the informal sector still accounting for slightly less than half of grocery sales in Saudi Arabia,
significant room for expansion exists.
■ The rate of formal mass grocery retail (MGR) penetration in Saudi Arabia has lagged behind Gulf states,
such as the UAE, where the size of the market is much smaller and the spending power of most of the
population generally much higher.
■ Much of the sales in the MGR sector are expected to be driven by strong growth in modern grocery
retailers.
Having attracted considerable investment over recent years, Saudi Arabia's MGR industry has continued to
gradually consolidate, with market leader Panda (owned by Savola) in particular continuing to pursue
significant organic and non-organic expansion. With non-organic growth avenues all but extinguished,
Panda has since focused on organic store growth.
UAE based Majid al-Futtaim is a leading hypermarket operator in the country under the Carrefour
banner, having acquired the French retailer's 25% stake in their Middle East/North Africa joint venture in
2013. It will retain the banner until 2025, with its impressive buying power likely to allow it to keep prices
reasonably low and affordable.
Other prominent players in organised retail include the hypermarket operator al-Othaim, hypermarket/
supermarket-focused Bin Dawood and the UAE-based EMKE with its LuLu hypermarkets. EMKE plans to
open six Lulu stores in Saudi Arabia over 2017, following the eight hypermarkets launched in 2016. The
company chairman also announced that by 2020 they aim to have 20 hypermarkets in operation.
Upmarket retailer Spinneys, which has presence across the region, recently announced plans to open 10
outlets in the country over the next decade, in cities including Jeddah and Riyadh.

Competitive Landscape
Table: Key Players In Saudi Arabia's Food And Drink Sector
Company Country Of Ownership Sub-Sector Sales Sales Fiscal Employ

Origin (SARmn) (USDmn) Year End ees
Savola Group Saudi Private Food - edible oil, 25,312 na Dec-16 23,000+
Arabia company dairy, sugar, mass
grocery retail
Almarai Company Saudi Private Food - dairy, fruit 14,699 na Dec-16 34,000
Arabia company juice
Unilever NAME UK Parent Food & beverages na 950e* na na
company:
Unilever
Group
Aujan Group Holding Saudi Beverage - soft na na na 2,500e
Arabia drinks
Al-Rabie Saudi Foods Co. Saudi Private Beverages na 350e na 1,200
Arabia company
Al-Safi Dairy Saudi Parent Food - dairy na 275e na 2,000e
Arabia company:
Danone
Saudi Dairy and Foodstuff Saudi Food & beverages 1,838 na Mar-15 2,200
Company (SADAFCO) Arabia
Hail Agricultural Saudi Parent Agribusiness & na na na 1,500+
Development Co (HADCO)** Arabia company: food
Almarai
Arab Supply & Trade Saudi Agribusiness na na na 5,000+
Corporation Arabia
Arabian Agricultural Services Saudi Agribusiness na na na 1,800
Co (ARASCO) Arabia
Zamzam Group Saudi Beverage - na na na 7,780
Arabia carbonates
National Bottling Company Saudi Beverage - na na na 1,500
(PepsiCo) Arabia carbonates
Coca Cola Bottling US Beverage - na na na na
Company of Saudi Arabia carbonates
Makkah Water Saudi Beverage - bottled na na na na
Arabia water
Nestlé Middle East Switzerland Food & beverages na na na 4,000
e = BMI estimate, na = not available; *includes Middle East Sales; **HADCO was acquired by Almarai in July 2009.
Source: Company results, trade press, BMI
Table: Key Players In Saudi Arabia's Mass Grocery Retail Sector

Key Players In Saudi Arabia's Mass Grocery Retail Sector - Continued
Company Country Ownership Sales Sales Fiscal Fascia Format Outlets Year Em-
Of Origin (SARmn) (USDmn) Year Est ployees
End
Panda Retail Saudi Parent 26,425 na Dec-15 496 1979 15,000e
Company Arabia company:
Savola
Group
Panda Super- 151 na na
market
Hyper Hyper- 63 na na
Panda market
Pandati Con- 282 na na
venience
store
Carrefour France/ Parent na 500e na Carrefour Hyper- 12 1995 6,000
MAF UAE company: MAF market
Majid al
Futtaim
Super- 4 na na
market
EMKE Group UAE/India Private na 1,100e na Lulu Hyper- 8 1966 na
company market
Farm Saudi na 60e na Farm Super- 47 1978 1,000
Superstores Arabia Super- market
stores
Al-Raya Saudi Private na na na Al-Raya na 45 1992 1,000+
Super- Arabia company
markets
Bin Dawood Saudi Private na na na Super- 20 1984 na
Arabia company market
Al-Sadhan Saudi Private na na na Al-Sadhan Hyper- na 1953 450
Trading Co Arabia company market
e = BMI estimate, na = not available; *Giant Stores are in the process of being converted to the al-Azizia Panda and Hyper
Panda fascias. Source: Company results, trade press, BMI

Company Profile
Panda Retail Company (Savola Group)
SWOT Analysis
Strengths ■
Saudi Arabia's leading mass grocery retailer with estimated market share of around
8%.
■
Acquired the retail operations of the Giant Store and Géant chains from two of its
rivals.
■
Having a real estate arm gives Savola major advantage, as it will help in obtaining
prime pieces of real estate for the construction of new hypermarkets at reasonable
prices and ahead of the competition.
Weaknesses ■
Consumer spending power across the entire population in Saudi Arabia is fairly low
by Gulf standards, with access to mass grocery retailers fairly uneven across the
country.
■
There is little room left for non-organic growth in Saudi Arabia.
Opportunities ■
Significant scope for organic growth remains across both the hypermarket and
supermarket segments as the local mass grocery retail industry continues to
formalise.
■
Panda has managed to establish a successful private label range, the popularity of
which is expected to grow as consumers slowly warm to what is a relatively new
addition to the country's mass grocery retailer framework.
■
Expansion opportunities exist across the wider Middle East and North Africa region
through both the Panda and Giant Stores banners.
Threats ■
Panda's hypermarket business faces strong competition from the Carrefour formats
and local rival al-Othaim.

Company Overview Panda was established in 1978 and expanded throughout the 1980s. In 1994 Panda
merged with Azizia to form the largest food retail chain in Saudi Arabia, becoming part
of the Savola Group in 1998. The company has since established itself as the country's
leading retailer. In 2008, Savola acquired an 80% stake in the Giant Stores chain from
domestic company AK al-Muhaidib and Sons Group to become one of the region's
largest retailers, with a combined turnover of more than USD1bn. It is Saudi Arabia's
only national supermarket chain, operating over 400 outlets.
Strategy Having established market domination in the Gulf's biggest market, both geographically
and in terms of population, Panda's ultimate aim is to be the leading retailer in the
Middle East, taking on both MAF's Carrefour format, al-Othaim and EMKE.
Domestically, it intends to adopt an aggressive store-opening strategy to maintain its
market leadership while retaining profitability. Panda has determined that the
hypermarket format will be its main driver of growth, and its parent company Savola's
establishment of an independent real-estate company should aid the group in achieving
this aim. Savola's real estate arm, which is part of a wider bid for diversification, will
help in obtaining prime pieces of real estate for the construction of new hypermarkets at
reasonable prices and ahead of the competition. However, the company will also
continue to pursue expansions in the important supermarket store format.
Developments 2017
Net revenue for Q117 reached SAR5.8bn, down from SAR6.4bn for the same quarter
last year, representing a year-on-year decrease of 9.4%
2015
Savola Group has posted a 47% y-o-y decline in its net profit to SAR371.6mn
(USD99.1mn) for Q315. The decline has been attributed to the return on the sale of
some investment assets via the divestment of its entire stake in a real estate project,
according to the company. Operating profit dropped 21% y-o-y to SAR510.6mn
(USD136.2mn) during the quarter, driven by increased operating expenses due to
growth and expansion in retail sector operations. Sales stood at SAR5.9bn (USD1.6bn)
during Q315 (Just-Food). The group reported a further 53.3% drop in Q316 profits
while also halving its quarterly dividend. Net profit in Q316 was reported to be
SAR173.3mn (USD46.3mn).
On the domestic front, Panda expanded its store network, consisting of supermarkets,
hypermarkets and convenience stores, to 300 in 2015. The company plans to invest
AED1bn-2bn per annum over the next four to five years in new stores and warehouses,
and the expansion of its fleet.

Total revenue declined from SAR26,588mn in 2014 to SAR26,425mn in 2015, which is

largely a result of underperformance in the retail segment.
2014
According to announcements in October 2014, the company was among the first-round
bidders for a potential acquisition of Kuwait-based Americana. The average offer for the
deal was valued at about KWD1.41bn (USD5bn) or about KWD3.5 (USD12.3) a share.
However, the deal is likely to fetch more than USD4bn, reports Bloomberg. The firm has
also received a joint bid from Kohlberg Kravis Roberts & Co and CVC Capital Partners,
while Advent International and TPG Capital have submitted a separate bid.
In August 2014, the company announced that it will open between eight and 12
supermarkets and hypermarkets in the UAE over the next three years, with an
investment of AED2bn-3bn, according to the company's chief executive, Muwaffaq M.
Jamal. The company was also looking to enter Egyptian market by the end of 2015,
with up to seven outlets in Cairo, which will be a combination of standalone stores and
stores within shopping malls.
Financial Data Revenue
■ 2016: SAR25,312mn
■ 2015: SAR25,126mn
■ 2014: SAR26,588mn
■ 2013: SAR25,281mn

Almarai
SWOT Analysis
Strengths ■
The largest Gulf dairy company by market value.
■
Almarai has been diversifying through acquisitions both in terms of geography and
business categories.
■
Almarai's first-rate and hands-on distributional system is unmatched regionally, with a
broad network of delivery trucks and sales depots.
■
Joint venture with PepsiCo has significantly raised its international profile.
■
Almarai has reported strong financials in recent quarters.
■
The company receives support from the Saudi government, which seeks to
encourage the development of non-hydrocarbon sectors.
■
Excellent brand awareness and reputation among consumers.
Weaknesses ■
Restrictions imposed by the Saudi government make it difficult for foreign investors to
own equity in Almarai.
■
The company has been affected by higher by higher commodity prices and expansion
costs.
Opportunities ■
Demand for dairy products remains strong in the Gulf and in less-developed wider
Middle East regions.
■
Outperforming fruit juice unit is expected to continue growing sharply.
■
By expanding its operations further afield, Almarai is in a good position to benefit from
strong growth in other emerging markets.
■
Large investment plans for the period 2017-2021 could further strengthen company's
position.
Threats ■
The Saudi dairy market is highly competitive.
■
Unfavourable moves in dairy prices could affect the company.

SWOT Analysis - Continued
■
Profits have been threatened by higher operating costs.
Company Overview Saudi Arabia-based Almarai is the largest dairy company in the Gulf by market value.
Almarai became a publicly listed company in 2005 and soon began acquiring smaller
Saudi dairy companies to integrate into its business. It now has a total production
capacity of 1.8mn litres of milk per day. It is a vertically integrated organisation that
covers all supply chain activities ranging from dairy farming and food processing to
marketing, sales and distribution.
Strategy Almarai recently indicated that it would push investment in its poultry segment, as it
views the segment as the strongest growth opportunity over the medium term.
Almarai's poultry business has been outperforming Almarai's more traditional
businesses in terms of revenue growth since it entered the market in 2010. However,
despite this growth, the poultry sector remains unprofitable given the large initial
investment and the slow flock-building process. Production costs for local broiler
farmers are in general very high due to heavy dependence on imported feed
ingredients, poultry equipment and medicine, and the high costs of temperature control.
Almarai has been recording losses in its poultry due to high feed costs and mortality
rates.
Developments 2017
Almarai was named Saudi Arabia's top brand in terms of quality and reputation,
surpassing a number of global brands in YouGov's latest BrandIndex survey.
2015
In May 2015, Almarai revealed its plans to invest about SAR21bn (USD5.59bn) in its
business between 2016 and 2020. The latest investment plans follow the company's
earlier plans to invest SAR15.7bn (USD4.2bn) until 2017 to expand its business across
dairy, bakery and poultry segments. The new investment plan will enable the company
to strengthen its presence in all segments and geographies, and double its revenues,
reports Food Business Review. Almarai plans to expand its farming, manufacturing,
distribution and logistics activities across all segments.
In H115, the company reported consolidated net profit of SAR836.9mn, which marked
an increase of 18.4% compared to the same period of last year (SAR 706.9mn). Net
income for the first half of 2015 also saw an increase of 11.3% y-o-y, climbing to
SAR6,686.8mn. Profits for Q216 were up 18.6%, accounting to SAR628.8mn up from
SAR530.4mn in the year before.

2014
In mid-2014, the company revealed a USD345mn investment plan to set up a new juice
factory and create a new dairy farm in Egypt.
2013
In early May 2013, the company revealed that it plans to raise at least USD500mn from
the sale of its debut international Islamic bond, targeting regional investors. The
company said the proceeds will be used to finance growth in the form of factories,
farms and distribution capabilities, with plans to invest SAR3bn (USD800mn) annually
over the next five years.
Financial Data Revenue
■ 2016: SAR14.699mn
■ 2015: SAR13.795mn
■ 2014: SAR12.606mn
■ 2013: SAR11.219mn

Al Rabie Saudi Foods

SWOT Analysis
Strengths ■
Al Rabie is the established market leader in the lucrative fruit juice division.
■
Operating presence across a diverse range of food and drink segments.
■
Strategic emphasis on health and wellbeing is a promising long-term strategy.
Weaknesses ■
The sharp pace at which consumer preferences are evolving within the sector means
the company must invest to retain its leadership position in the market, particularly as
regional competition increases.
■
The global economic downturn impacted consumer confidence in Saudi Arabia, and
has slowed the premiumisation trend from taking hold, which is important for Al
Rabie's long-term growth.
Opportunities ■
Fruit juice consumption is forecast to experience strong growth both in Saudi Arabia
and regionally.
■
Rising health consciousness is likely to boost demand for low-calorie juice drinks and
functional drinks.
■
Opportunities exist for a more segmented product portfolio.
■
The company is aiming for expansion in European and the U.S. markets.
Threats ■
The juice and dairy segments are highly competitive, with a number of domestic and
regional companies increasing volumes and investment into value-added product
portfolio enhancers.
Company Overview Al Rabie Saudi Foods produces a range of food and drink products and is the largest
juice manufacturer in the Middle East. As well as a wide variety of juices, the company
also produces dairy products, iced coffee, chocolate drinks, tomato paste, chickpeas
and soya products. Established in 1980 as the Saudi Irish Dairy Company, the company

changed its name in 1983. The company also has branches in Bahrain. Popular brands
include Al Rabie and Awal Qatfa.
Strategy Al Rabie has also been investing into public education campaigns regarding the health
benefits of some of its key product groups, such as soya-based foods. Social
responsibility programmes are also a key element of the company's marketing and
growth strategy.
The company's export team has also reportedly moved ahead with plans to release its
value-added products in the US, focusing on various juice and nectar products along
with its Awal Qatfa brand (ready-to-eat food products from Al Rabie).
Developments 2016
As part of the company's overseas push, Al Rabie signed an agreement with a local
partner in Malaysia. The agreement serves to distribute the company's products across
the Malaysian market; in addition to exporting to the Canadian market.
2014
In 2014, the company inaugurated a new production factory in the city of Jazan. The
new factory was set to produce juices and soft processed foods. It will serve the city of
Jazan and wider Saudi Arabia, as well as northern Africa. 'The new factory is an
implementation of the company's expansion strategy, in order to meet the consumers'
demand to Al Rabie products, locally and regionally as well as MENA,' said Monther Al
Harthi, the CEO of Al Rabie.
In April 2014, the company indicated that it would be sponsoring the Jeddah Green
Sports team for women in different sport categories during 2014. The team has been
active in promoting the role of women in a largely patriarchal society, and we believe it
will position Al Rabie foods as an open and forward-looking company, which could
generate good publicity and boost volume sales for the company's products. In July,
the company also signed a partnership to distribute 100,000 meals to fasting individuals
during the holy month of Ramadan.
Financial Data ■ Estimated annual sales: USD350mn

■ Established: 1980

Aujan Group Holding

SWOT Analysis
Strengths ■
Aujan is one of the soft drinks industry's leaders, producing a number of popular
brands.
■
Aujan has established a strong management, manufacturing and distribution
infrastructure on which it can expand, and is committed to technological
advancement in each of those areas.
Weaknesses ■
The company's planned expansions, both in the Gulf region and further afield, require
significant investment, especially as consumer preferences and expectations evolve
rapidly.
Opportunities ■
Coca-Cola's investment will allow Aujan to pursue its international expansion plans
for brands including Barbican and Rani, as well as building upon the regional success
of its Vimto brand.
■
Aujan's partnership with energy drinks manufacturer Base is a wise strategic move in
a country with a fast-growing youthful market, as it will allow the company to diversify
its portfolio to capture a greater share of this emerging functional drinks segment.
■
Investment into re-emerging Iraq will open up access to the large and
underdeveloped soft drinks market.
■
A ban on alcoholic drinks in Saudi Arabia and many of its neighbouring countries
means that soft drinks sales are forecast to experience strong growth.
Threats ■
Aujan faces strong competition from a number of local and international players in the
soft drinks sector.
■
Aujan could suffer from anti-American sentiments due to its partnership with The
Coca-Cola Company.

Company Overview Established in 1905, Aujan is the largest privately owned beverage company in the Gulf
Cooperation Council. The company's brands include Rani, Barbican and Vimto, and it is
also the regional distributor for a number of recognisable confectionery products,
including Wrigley's chewing gum and the Cadbury chocolate range. Aujan has
operations in 15 regional locations, with a presence in 50 countries, and more than
2,500 employees.
Strategy Aujan's strategy for growth has been to focus on its five key brands, which include Rani,
Vimto and Barbican, as a means of increasing revenues. In recent years, Aujan has
started to look further afield for growth and has been eyeing regional markets as a
means of expansion. Specifically, Aujan is aiming to have its brands available in 100
countries. The company is also looking at additional production facilities in Iraq, North
Africa and most likely, Egypt.
Developments 2015
In early February 2015, the company revealed its USD500mn investment plans in the
MENA region. The company's CEO Nicolaas Nusmeier said that the investments will be
made over the next three years: 'major investments in capacity, geographical coverage,
and brand development will allow us to capitalise on the growth potential for the
beverage industry in the MENA region.'
2014
In early 2014, the company acquired the majority stake in National Beverage Company,
the manufacturer and distributor of Coca-Cola and Pampa products in Lebanon.
Nicolaas Nusmeier, CEO of Aujan, said: 'his partnership reflects ACCBC's commitment
to invest in beverages for long term growth, and we look forward to developing and
growing this business over time'.
In February 2014 the company said it was ready to spend USD100mn building a fruit-
juice factory in Egypt over the next few years, Reuters reported, citing Meshal
Alkadeeb, vice president of strategy and business development. The plant is expected
to be commissioned between 2016 and 2017.

Carrefour MAF
SWOT Analysis
Strengths ■
The company's considerable buying power keeps shelf prices relatively low,
particularly for branded goods.
■
Carrefour MAF has raised the bar in terms of the variety and volume of goods it
stocks.
■
Carrefour has now also branched out into the supermarket format with Carrefour
Market.
Weaknesses ■
Carrefour MAF will need to continue investing to compete with other MGR players in
the country.
■
As most mass grocery retail outlets are located in large shopping malls, this restricts
expansion, with the process of finding locations often costly and difficult.
Opportunities ■
Saudi Arabia's MGR segment is expected to record strong growth over the coming
years.
■
The company has been rapidly expanding its store network.
Threats ■
The hypermarket and supermarket segments will face increasing competition from
discount and convenience stores.
■
Growing economies could potentially undermine Carrefour's expansion plans.
Company Overview Carrefour entered Saudi Arabia in 2004 and currently operates 12 hypermarkets and
four supermarkets in the kingdom. Under a franchise agreement, Carrefour stores are
operated by Majid Al Futtaim (MAF) group in Saudi Arabia and other regional countries.

Strategy Carrefour MAF's strategy for the Middle East region has been to drive modernisation
and strengthen its brand, rather than delay significant store expansion. Its home market,
the UAE, continues to be its most important in the region.
In a surprise move, in May 2013, Carrefour sold its 25% stake in its MENA joint venture
to MAF for AED2.5bn (EUR530mn). Under the agreement, MAF will retain a franchise
agreement with Carrefour until 2025 so the stores will retain the popular Carrefour
banner until then. MAF is now well positioned to expand operations both domestically
and internationally (a promising prospect for the company).
Developments 2017
Carrefour MAF acquired Retail Arabia in July 2017, the franchise owner of Geant
hypermarkets in UAE, Bahrain and Kuwait, and will rebrand its 29 stores under the
Carrefour brand before the end of 2017. It also launched five new Carrefour
hypermarkets and nine supermarkets in the first six months of 2017, strengthening its
presence to more than 210 outlets in 15 countries across the MENA region.
2016
The company has two malls in the pipeline for Saudi Arabia. Construction on City
Centre Ishbiliyah is planned to start in 2018/19 in East Riyadh, with completion
expected in 2021/22. Construction on the Mall of Saudi, which will be located in North
Riyadh, is planned to commence in 2020; it is expected to open in 2023/24.
2015
On 20 April 2015, MAF opened a Carrefour hypermarket in the city of Hofuf, Saudi
Arabia. MAF is also active in retail developments overseas. In May 2016, MAF opened
the first Carrefour hypermarket in Nairobi, Kenya while in June 2016, the Reem Mall,
Abu Dhabi's $1 billion retail hub under construction, announced Carrefour as its
hypermarket operator.
2013
In autumn 2013, the chief executive of MAF Properties, George Kostas, stated that the
UAE, Saudi Arabia and Egypt are the three key markets that the company plans to
focus on in the next two to three years following an extensive strategy review.

LuLu (EMKE Group)

SWOT Analysis
Strengths ■
LuLu benefits from considerable brand equity and a reputation for quality.
■
Lulu Group benefits from being highly diversified, with operations across a wide
geographic profile as well as cross-sector operations.
Weaknesses ■
EMKE will have to invest heavily in order to realise its ambitious expansion plans for
both the Saudi market and the greater region.
■
Competition in the sector has grown significantly in recent years, as more
international mass grocery retail operators have entered the market.
■
The Saudi market is considerably different than the smaller Gulf markets that EMKE is
used to operating in and will present more logistical challenges.
Opportunities ■
The emergence of stand-alone retail outlets appears the logical next step for Saudi
Arabia's mass grocery retail industry.
■
There is plenty of untapped potential in the country's convenience stores sector.
■
EMKE has ambitious expansion plans for the Saudi market.
Threats ■
Global commodity prices are continuing to rise, which means that consumers could
once again become very cost-conscious and cut back on non-essential purchases.
■
EMKE will face increased competition as more international companies enter the
Saudi market.
Company Overview Abu Dhabi-based food and retail group EMKE operates the LuLu hypermarket chain in
the Middle East as well as a number of supermarkets and now convenience stores
under the LuLu Express banner. It has been steadily growing its store presence since it
first entered the Saudi market in 2009 and currently has five hypermarkets in the
country.

Strategy EMKE's strategy for its LuLu stores is to use the network to bring modern, organised
retailing within reach of the entire Gulf population and beyond. It has pursued this aim
through an ambitious and expansive store-opening programme, with further regional
expansion plans including outlets in the UAE, Oman, Yemen, and Kuwait, before
eventually investing in expansion to Africa and India. Despite being expensive, the
profitability and inevitable level of competition in the region in the coming years makes
EMKE's rapid growth strategy for the LuLu brand a sensible one.
Recently, the company has been exploring new store formats and focusing its
expansions on its LuLu Express format, with three new stores recently opened in the
UAE. EMKE plans to use this smaller Express format as a means of penetrating more
residential communities. The new outlets will focus on the quality and diversity of the
products on offer, as EMKE looks to compete with local rivals and regional major MAF-
owned Carrefour. EMKE will also continue to stress hygiene, food safety, waste
disposal and quality control as a means of drawing customers away from traditional
markets. Larger outlets will also have a hot food section, as well as ready-to-eat foods
as the company looks to take advantage of the rising demand for convenience foods
along with increasingly busy lifestyles.
Developments 2017
The group plans to expand by additional six stores in Saudi Arabia over 2017, following
its eight hypermarket launch early this year. The company chairman also announced
that by 2020 they will increase the number of outlets to 20.
2016
Lulu Group opened its sixth hypermarket in Dammam, Saudi Arabia on 13th January
2016 and plans to open an additional four before the end of the year. Targeted locations
are two stores in Jeddah and one store in Hofuf and Hail. The company further
expanded its operations by opening its 125th hypermarket worldwide in Jeddah. A
company spokesperson said it was planning to add 12 more outlets in the country,
which are slated to open by 2018 and further invest SAR800mn in the next two years.
2015
In March 2015, LuLu strengthened its retail footprint in Saudi Arabia with the opening of
a new hypermarket in Jubail, an industrial city in the country's eastern province. Jubail
Governor Badr bin Mohammed Al Otaishan officially inaugurated the hypermarket,
which is located at King Faisal Street and is the company's fifth in the country. In total,
the company operates 118 outlets in 31 countries.
2014
In autumn 2014, LuLu bought a 10% stake in UK-based trading firm The East India
Company and a 40% stake in its fine foods subsidiary for around USD82mn. According

to Yusuff Ali, the new investment will enable the fine foods unit to expand its store
network in Europe, the Far East and prepare for a launch in the US.
Financial Data Estimated Middle East and North Africa sales: USD1.1bn

Saudia Dairy & Foodstuff Company (SADAFCO)

SWOT Analysis
Strengths ■
Through organic and acquisition-led growth, SADAFCO has established itself as one
of the market leaders in a number of dairy sub-sectors, including fresh milk and ice
cream.
■
SADAFCO's tomato paste brand leads the domestic market.
■
SADAFCO benefits from strong brand recognition and established distribution
networks across the company.
■
The company's partnership with the world's largest dairy exporter Fonterra is likely to
see the continued sharing of expertise and improved operational efficiencies.
Weaknesses ■
The company must continue to invest in product portfolio enhancements and
distributional efficiencies as sector-wide competition intensifies.
■
The local climate is not conducive to dairy farming, with the company constantly
looking for fresh water resources.
Opportunities ■
We expect steady growth in dairy demand in Saudi Arabia and the wider Middle East
region.
■
SADAFCO's fruit juice business is likely to benefit from forecast growth in the soft
drinks industry.
■
The country's snack foods sector is experiencing strong growth.
Threats ■
Saudi Arabia's dairy industry is the most competitive in the Gulf region.
■
Unfavourable shifts in dairy prices could affect the company, particularly since local
consumers are already price sensitive.
■
Rival dairy company Almarai has been investing heavily in expansion.

Company Overview Established in 1976 in Jeddah, SADAFCO began production in 1977. The original focus
was on dairy products and through a series of acquisitions over the following years the
company has now expanded its product range. Through a joint venture with Saudi New
Zealand Milk Products, it now produces cheese, and through the acquisition of Sara
Snack Foods Factory in 1995, it entered the snack food market. In 2005, the company
launched an initial public offering and is now listed on the Saudi Stock Exchange.
Strategy SADAFCO will look to maintain its dominant position in Saudi Arabia while also
increasing geographical diversification in the region. The company has a well-
established sales and distribution network that enables it to maintain a strong brand in
its domestic market. SADAFCO has been investing heavily in distributing its milk
products to school children and public awareness campaigns regarding the health
benefits of dairy products. The company will continue to invest heavily in advertising
and marketing as it continues to launch new and value-added products.
The company now also exports its products to a number of countries, including other
Gulf states, Djibouti, Egypt, Jordan, Lebanon, Iran, Sudan, Syria and Pakistan, and has
established subsidiaries in the UAE, Qatar, Bahrain and Jordan, where it markets its
products through external distributors and agents. These regional markets will continue
to be important growth engines for the company.
Developments 2017
Despite the drop in overall consumption levels amid weak consumer demand,
SADAFCO achieved consistent net margins in Q217, roughly in line with previous
quarters. The company recorded net profit of SAR75mn in Q217 compared to
SAR81mn in Q117, while revenues dropped from SAR453mn to SAR441mn over the
same period.
2016
The company has expanded its beverage portfolio by introducing two new products
which are unique to the Saudi Arabian market: the Saudia Date Milk range and Saudia
Soy.
2013
In May 2013, SADAFCO announced the reopening and expansion of its production
facilities in Dammam, Saudi Arabia. With the company's enhanced production
capacities, SADAFCO is well placed to meet rising consumer demand, producing its
Crispy Snacks range, tomato paste and feta cheese.

Financial Data ■ 2016/2017 sales: SAR1,858mn

■ 2015/16 sales: SAR1,983mn
■ 2014/15 sales: SAR1,681mn

Demographic Forecast
Demographic Outlook
Demographic analysis is a key pillar of BMI's macroeconomic and industry forecasting model. Not only
is the total population of a country a key variable in consumer demand, but an understanding of
the demographic profile is essential to understanding issues ranging from future population trends to
productivity growth and government spending requirements.
The accompanying charts detail the population pyramid for 2017, the change in the structure of
the population between 2017 and 2050 and the total population between 1990 and 2050. The tables show
indicators from all of these charts, in addition to key metrics such as population ratios, the urban/rural split
and life expectancy.
Population
(1990-2050)
60
40
20
0
1990
2000
2005
2010
2015
2020f
2025f
2030f
2035f
2040f
2045f
2050f
Saudi Arabia - Population, mn
f = BMI forecast. Source: World Bank, UN, BMI

Saudi Arabia Population Pyramid

2017 (LHS) & 2017 Versus 2050 (RHS)
Source: World Bank, UN, BMI
Table: Population Headline Indicators (Saudi Arabia 1990-2025)
1990 2000 2005 2010 2015 2020f 2025f
Population, total, '000 16,326 20,764 23,905 27,425 31,557 34,709 37,290
Population, % y-o-y 2.3 2.9 2.9 2.5 1.7 1.3
Population, total, male, '000 9,144 11,309 13,304 15,400 17,892 19,946 21,264
Population, total, female, '000 7,181 9,455 10,600 12,025 13,664 14,762 16,025
Population ratio, male/female 1.27 1.20 1.26 1.28 1.31 1.35 1.33
na = not available; f = BMI forecast. Source: World Bank, UN, BMI
Table: Key Population Ratios (Saudi Arabia 1990-2025)
1990 2000 2005 2010 2015 2020f 2025f
Active population, total, '000 9,012 12,209 15,105 18,438 22,389 24,977 26,706
Active population, % of total population 55.2 58.8 63.2 67.2 70.9 72.0 71.6
Dependent population, total, '000 7,314 8,554 8,800 8,986 9,167 9,732 10,584
Dependent ratio, % of total working age 81.2 70.1 58.3 48.7 40.9 39.0 39.6

Key Population Ratios (Saudi Arabia 1990-2025) - Continued
1990 2000 2005 2010 2015 2020f 2025f
Youth population, total, '000 6,854 7,931 8,091 8,169 8,204 8,428 8,777
Youth population, % of total working age 76.1 65.0 53.6 44.3 36.6 33.7 32.9
Pensionable population, '000 459 623 708 817 963 1,303 1,806
Pensionable population, % of total working age 5.1 5.1 4.7 4.4 4.3 5.2 6.8
Table: Urban/Rural Population & Life Expectancy (Saudi Arabia 1990-2025)
1990 2000 2005 2010 2015e 2020f 2025f
Urban population, '000 12,503.6 16,579.9 19,358.6 22,512.1 26,233.5 29,194.6 31,707.2
Urban population, % of total 76.6 79.8 81.0 82.1 83.1 84.1 85.0
Rural population, '000 3,823.3 4,184.4 4,547.1 4,913.6 5,323.7 5,515.0 5,583.1
Rural population, % of total 23.4 20.2 19.0 17.9 16.9 15.9 15.0
Life expectancy at birth, male, years 67.5 70.9 71.7 72.3 73.1 73.9 74.6
Life expectancy at birth, female, years 70.9 74.3 74.7 75.2 76.1 77.0 77.9
Life expectancy at birth, average, years 69.0 72.4 73.1 73.6 74.4 75.2 75.9
Table: Population By Age Group (Saudi Arabia 1990-2025)
1990 2000 2005 2010 2015 2020f 2025f
Population, 0-4 yrs, total, '000 2,707 2,702 2,745 2,918 2,960 3,057 2,944
Population, 40-44 yrs, total, '000 674 1,214 1,550 1,936 2,892 3,446 3,182
Population, 45-49 yrs, total, '000 476 854 1,073 1,524 2,087 2,856 3,178

Population By Age Group (Saudi Arabia 1990-2025) - Continued
1990 2000 2005 2010 2015 2020f 2025f
Population, 50-54 yrs, total, '000 339 479 752 1,014 1,537 1,966 2,628
Population, 55-59 yrs, total, '000 275 363 440 711 989 1,422 1,860
Population, 60-64 yrs, total, '000 243 296 354 412 689 909 1,343
Population, 65-69 yrs, total, '000 202 234 268 320 381 609 828
Population, 100+ yrs, total, '000 0 0 0 0 0 0 0
Table: Population By Age Group % (Saudi Arabia 1990-2025)
1990 2000 2005 2010 2015 2020f 2025f
Population, 0-4 yrs, % total 16.59 13.01 11.48 10.64 9.38 8.81 7.90

Population By Age Group % (Saudi Arabia 1990-2025) - Continued
1990 2000 2005 2010 2015 2020f 2025f
Population, 100+ yrs, % total 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Glossary
Food & Drink
Food Consumption: All four food consumption indicators (food consumption in local currency, food
consumption in US dollar terms, per capita food consumption and food consumption as a percentage of
GDP) relate to off-trade food and non-alcoholic drinks consumption, unless stated in the relevant table/
section.
Off-trade: Relates to an item consumed away from the premises on which it was purchased. For example, a
bottle of water bought in a supermarket would count as off-trade, while a bottle of water purchased as part
of a meal in a restaurant would count as on-trade.
Canned Food: Relates to the sale of food products preserved by canning. This is inclusive of canned meat
and fish, canned ready meals, canned desserts and canned fruits and vegetables. Volume sales are measured
in tonnes as opposed to on a unit basis to allow for cross-market comparisons.
Confectionery: Refers to retail sales of chocolate, sugar confectionery and gum products. Chocolate sales
include chocolate bars and boxed chocolates; gum sales incorporate both bubble gum and chewing gum;
and sugar confectionery sales include hard-boiled sweets, mints, jellies and medicated sweets.
Trade: In the majority of BMI's Food & Drink reports, we use the UN Standard International Trade
Classification, using categories Food and Live Animals, Beverages and Tobacco, Animal and Vegetable
Oils, Fats and Waxes and Oil-seeds and Oleaginous Fruits. Where an alternative classification is used due to
data availability, this is clearly stated.
Drinks Sales: Soft drinks sales (including carbonates, fruit juices, energy drinks, bottled water, functional
beverages and ready-to-drink tea and coffee), alcoholic drinks sales (including beer, wine and spirits) and
tea and coffee sales (excluding ready-to-drink tea and coffee products that are incorporated under BMI's
soft drinks banner) are all off-trade only, unless stated.
Mass Grocery Retail
Mass Grocery Retail: BMI classifies mass grocery retail (MGR) as organised retail, performed by
companies with a network of modern grocery retail stores and modern distribution networks. MGR differs
from independent or traditional retail, which relates to informal, independent-owned grocery stores or
traditional market retailing. MGR incorporates hypermarket, supermarket, convenience and discount

retailing, and in unique cases cooperative retailing. Where supermarkets are independently owned and not
classified as MGR, BMI will state so clearly within the relevant report.
Hypermarket: BMI classifies hypermarkets as retail outlets selling both groceries and a large range of
general merchandise goods (non-food items) and typically more than 2,500sq m in size. Traditionally only
found on the outskirts of towns, hypermarkets are increasingly appearing in urban locations.
Supermarket: Supermarkets are the original and still most globally prevalent form of self-service grocery
retail outlet. BMI classifies supermarkets as more than 300sq m, up to the size of a hypermarket. The
typical supermarket carries both fresh and processed food and will stock a range of non-food items, most
commonly household and beauty goods. The average supermarket will increasingly offer some added-value
services, such as dry cleaning or in-store ATMs.
Discount Stores: Although most commonly between 500sq m and 1,500sq m in size, and thus of the same
classification as supermarkets, discount stores will typically have a smaller floor space than their
supermarket counterparts. Other distinguishing features include the prevalence of low-priced and private
label goods, an absence of added-value services, often called a no-frills environment, and a high product
turnover rate.
Convenience Stores: BMI's classification of convenience stores includes small outlets typically less than
300sq m in size, with long opening hours and located in high footfall areas. These stores mainly sell fast-
moving food and drink products (such as confectionery, beverages and snack foods) and non-food items,
typically stocking only two or three brand choices per item and often carrying higher prices than other
forms of grocery store.
Cooperatives: BMI classifies cooperatives as retail stores that are independently owned but club together
to form buying groups under a cooperative arrangement, trading under the same banner, although each is
privately owned. The arrangement is similar to a franchise system, although all profits are returned to
members. The term is becoming more archaic, with fewer cooperatives remaining that conform to this
model. Most cooperative groups now have a more centralised management structure, operate more like
normal supermarkets, and are thus classified as such in BMI's reports.

Methodology
How We Generate Our Industry Forecasts
BMI's industry forecasts are generated using the best-practice techniques of time-series modelling and
causal/econometric modelling. The precise form of model we use varies from industry to industry, in each
case being determined, as per standard practice, by the prevailing features of the industry data being
examined. BMI mainly uses OLS estimators and in order to avoid relying on subjective views and
encourage the use of objective views, BMI uses a 'general-to-specific' method. BMI mainly uses a linear
model, but simple non-linear models, such as the log-linear model, are used when necessary. During periods
of 'industry shock', for example a deep industry recession, dummy variables are used to determine the level
of impact.
Effective forecasting depends on appropriately-selected regression models. BMI selects the best model
according to various different criteria and tests, including, but not exclusive to:
■ R2 tests explanatory power; Adjusted R2 takes degree of freedom into account
■ Testing the directional movement and magnitude of coefficients
■ Hypothesis testing to ensure co-efficients are significant (normally t-test and/or P-value)
■ All results are assessed to alleviate issues related to auto-correlation and multi-co-linearity
BMI uses the selected best model to perform forecasting.
It must be remembered that human intervention plays a necessary and desirable role in all of BMI's industry
forecasting. Experience, expertise and knowledge of industry data and trends ensures that analysts spot
structural breaks, anomalous data, turning points and seasonal features where a purely mechanical
forecasting process would not.
Within the Food & Drink industry, this intervention might include, but is not exclusive to: significant
company expansion plans; new product development that might influence pricing levels; dramatic changes
in local production levels; product taxation; the regulatory environment and specific areas of legislation;
changes in lifestyles and general societal trends; the formation of bilateral and multilateral trading
agreements and negotiations; political factors influencing trade; and the development of the industry in
neighbouring markets that are potential competitors for foreign direct investment.

Example of Food Consumption Model:
(Food Consumption)t = β0 + β1*(GDP)t + β2*(Inflation)t + β3*(Lending Rate)t + β4* (Foreign Exchange

Rate)t + β5*(Government Expenditure)t + β6*(Food Consumption)t-1 + εt
Sourcing
BMI uses the following sources in the compilation of data, developments and analysis for its range of Food
& Drink reports: national statistics offices; local industry governing-bodies and associations; local trade
associations; central banks; government departments, particularly trade, agricultural and commerce
ministries; officially-released information and financial results from local and multinational companies;
cross-referenced information from local and international news agencies and trade press outlets; figures
from global organisations, such as the World Trade Organization (WTO), the World Health Organization
(WHO), the United Nations Food and Agricultural Organization (FAO) and the Organisation for Economic
Co-operation and Development (OECD).
Food & Drink (Non-Alcoholic Drinks) Risk/Reward Index
Our Food & Drink (Non-Alcoholic Drinks) Risk/Reward Index (RRI) quantifies and ranks a country's
attractiveness within the context of the Food & Drink (Non-Alcoholic Drinks) industry, based on the
balance between the Risks and Rewards of entering and operating in different countries.
We combine industry-specific characteristics with broader economic, political and operational market
characteristics. We weight these inputs in terms of their importance to investor decision making in a given
industry. The result is a nuanced and accurate reflection of the realities facing investors in terms of:
1) the balance between opportunities and risk; and
2) between sector-specific and broader market traits.
This enables users of the index to assess a market's attractiveness in a regional and global context.
The index uses a combination of our proprietary forecasts and analyst assessments of the regulatory climate.
As regulations evolve and forecasts change, so the index scores change providing a highly dynamic and
forward-looking result.

The Food & Drink (Non-Alcoholic Drinks) Risk/Reward Index universe comprises 107 countries.
Benefits of using BMI's Food & Drink (Non-Alcoholic Drinks) RRI
■ Global Rankings: One global table, ranking all the countries in BMI's universe for Food & Drink (Non-
Alcoholic Drinks) from least (closest to zero) to most attractive (closest to 100).
■ Accessibility: Easily accessible, top down view of the global, regional or sub-regional Risk/Reward
profiles.
■ Comparability: Identical methodology across 107 countries for Food & Drink (Non-Alcoholic Drinks)
allows users to build lists of countries they wish to compare, beyond the confines of a global or regional
grouping.
■ Scoring: Scores out of 100 with a wide distribution, provide nuanced investment comparisons. The higher
the score, the more favourable the country profile.
■ Quantifiable: Quantifies the rewards and risks of doing business in the Food & Drink (Non-Alcoholic
Drinks) sector in different countries around the world and helps identify specific flashpoints in the overall
business environment.
■ Comprehensive: Comprehensive set of indicators, assessing industry-specific risks and rewards alongside
political, economic and operating risks.
■ Entry Point: A starting point to assess the outlook for the Food & Drink (Non-Alcoholic Drinks) sector,
from which users can dive into more granular forecasts and analyses to gain a deeper understanding of
the market.
■ Balanced: Multi-indicator structure prevents outliers and extremes from distorting final scores and
rankings.
■ Methodology is a combination of proprietary BMI forecasts, analyst insights and globally acceptable
benchmark indicators (for example, World Bank's Doing Business Scores, Transparency International's
Corruption Perceptions Index).

Weightings Of Categories And Indicators
Food & Drink (Non-Alcoholic Drinks) Risk/Reward Index
Source: BMI
The RRI matrix is divided into two distinct categories:
Rewards
Evaluation of an industry's size and growth potential (Industry Rewards), and also macro industry and/or
country characteristics that directly impact the size of business opportunities in a specific sector (Country
Rewards).
Risks
Evaluation of micro, industry-specific characteristics, crucial for an industry to develop to its

potential (Industry Risks) and a quantifiable assessment of the country's political, economic and
operational profile (Country Risks).

Assessing Our Weightings
Our matrix is deliberately overweight on Rewards (60% of the final RRI score for a market) and within that,
the Industry Rewards segment (60% of the final Rewards score). This is to reflect the fact that when it
comes to long-term investment potential, industry size and growth potential carry the most weight in
indicating opportunities, with other structural factors (demographic, labour statistics and infrastructure
availability) weighing in, but to a slightly lesser extent. In addition, our focus and expertise in emerging and
frontier markets has dictated this bias towards industry size and growth to ensure we are able to identify
opportunities in countries where regulatory frameworks are not as developed and industry sizes are not as
big (in USD terms) as in developed markets, but where we know there is a strong desire to invest.
Indicators - Explanation And Sources
Table: Food & Drink (Alcoholic Drinks) Risk/Reward Index, Indicators
Indicator Source Rationale

Rewards
Industry Rewards
F&D Spending Per BMI Denotes per capita spending on food & non-alcoholic drinks in USD. Wealthier
Capita Forecast populations spend more on F&D products.
F&D Five-Year Growth BMI Denotes food & non-alcoholic drinks sector dynamism as a %. Scores based on
Rate Forecast annual average growth over our five-year forecast period.
Total F&D Expenditure BMI Denotes total household spending on food & non-alcoholic drinks in USDbn.
Forecast Large markets score higher than smaller ones.
Country Rewards
Population BMI Size of the population in millions as a measure for the total addressable market.
Forecast
Mass Affluent Class BMI Proportion of households with an income that exceeds USD10,000. Excludes
Forecast those in poverty but demonstrates potential demand for branded products.
Urban Population BMI Size of the urban population in millions. Higher urban population size is a positive
Forecast for distribution, higher economic development and accessing products through a
network of retailers.
Spending Population BMI Proportion of the population between 20-39 years old as a %. This is typically the
Forecast range that companies target as a high spending/trendsetting generation.
Risks
Industry Risks
Regulatory BMI Uses Operational Risk's Economic Openness as a proxy for determining the
Environment Operational ease of entering and doing business in a market.
Risk Index

Food & Drink (Alcoholic Drinks) Risk/Reward Index, Indicators - Continued

F&D Formalisation BMI Forecast Uses our urban/rural split (%) data as a proxy for determining the level of
retail/hospitality formalisation in the market. Highly urbanised markets allow
companies to easily serve more consumers.
Logistics Risk BMI Uses Operational Risk's Logistics Risk to determine the risks and costs
Operational associated with moving products around a market. Higher scores indicate
Risk Index quality transport, cheap fuel/electricity and high levels of tech adoption
Country Risks
Long-Term Economic BMI Country The Long-Term Economic Risk Index takes into account the structural
Risk Index Risk Index characteristics of economic growth, the labour market, price stability,
exchange rate stability and the sustainability of the balance of payments, as
well as fiscal and external debt outlooks for the coming decade.
Short-Term Economic BMI Country The Short-Term Economic Risk Index seeks to define current vulnerabilities
Risk Index Risk Index and assess real GDP growth, inflation, unemployment, exchange rate
fluctuation, balance of payments dynamics, as well as fiscal and external
debt credentials over the coming two years
Long-Term Political BMI Country The Long-term Political Risk Index assesses a country's structural political
Risk Index Risk Index characteristics based on our assumption that liberal, democratic states with
no sectarian tensions and broad-based income equality exhibit the strongest
characteristics in favour of political stability, over a multiyear timeframe.
Short-Term Political BMI Country The Short-Term Political Risk Index assesses pertinent political risks to
Risk Index Risk Index investment climate stability over a shorter time frame, up to 24 months
forward.
Operational Risk Index BMI The Operation Risk Index focuses on existing conditions relating to four
Operational main risk areas: Labour Market, Trade and Investment, Logistics, and Crime
Risk Index and Security.
Source: BMI
Food & Drink (Alcoholic Drinks) Risk/Reward Index
Our Food & Drink (Alcoholic Drinks) Risk/Reward Index (RRI) quantifies and ranks a country's
attractiveness within the context of the Food & Drink (Alcoholic Drinks) industry, based on the balance
between the Risks and Rewards of entering and operating in different countries.
We combine industry-specific characteristics with broader economic, political and operational market
characteristics. We weight these inputs in terms of their importance to investor decision making in a given
industry. The result is a nuanced and accurate reflection of the realities facing investors in terms of:
1) the balance between opportunities and risk; and
2) between sector-specific and broader market traits.

This enables users of the index to assess a market's attractiveness in a regional and global context.
The index uses a combination of our proprietary forecasts and analyst assessments of the regulatory climate.
As regulations evolve and forecasts change, so the index scores change providing a highly dynamic and
forward-looking result.
The Food & Drink (Alcoholic Drinks) Risk/Reward Index universe comprises 90 countries.
Benefits of using BMI's Food & Drink (Alcoholic Drinks) RRI
■ Global Rankings: One global table, ranking all the countries in BMI's universe for Food & Drink
(Alcoholic Drinks) from least (closest to zero) to most attractive (closest to 100).
■ Accessibility: Easily accessible, top down view of the global, regional or sub-regional risk/reward
profiles.
■ Comparability: Identical methodology across 90 countries for Food & Drink (Alcoholic Drinks) allows
users to build lists of countries they wish to compare, beyond the confines of a global or regional
grouping.
■ Scoring: Scores out of 100 with a wide distribution, provide nuanced investment comparisons. The higher
the score, the more favourable the country profile.
■ Quantifiable: Quantifies the rewards and risks of doing business in the Food & Drink (Alcoholic Drinks)
sector in different countries around the world and helps identify specific flashpoints in the overall
business environment.
■ Comprehensive: Comprehensive set of indicators, assessing industry-specific risks and rewards alongside
political, economic and operating risks.
■ Entry Point: A starting point to assess the outlook for the Food & Drink (Alcoholic Drinks) sector, from
which users can dive into more granular forecasts and analysis to gain a deeper understanding of the
market.
■ Balanced: Multi-indicator structure prevents outliers and extremes from distorting final scores and
rankings.
■ Methodology is a combination of proprietary BMI forecasts, analyst insights and globally acceptable
benchmark indicators (for example, World Bank's Doing Business Scores, Transparency International's
Corruption Perceptions Index).

Weightings Of Categories And Indicators
Food & Drink (Alcoholic Drinks) Risk/Reward Index
Source: BMI
The RRI matrix is divided into two distinct categories:
Rewards
Evaluation of an industry's size and growth potential (Industry Rewards), and also macro industry and/or
country characteristics that directly impact the size of business opportunities in a specific sector (Country
Rewards).
Risks
Evaluation of micro, industry-specific characteristics, crucial for an industry to develop to its

potential (Industry Risks) and a quantifiable assessment of the country's political, economic and
operational profile (Country Risks).

Assessing our Weightings
Our matrix is deliberately overweight on Rewards (60% of the final RRI score for a market) and within that,
the Industry Rewards segment (60% of the final Rewards score). This is to reflect the fact that when it
comes to long-term investment potential, industry size and growth potential carry the most weight in
indicating opportunities, with other structural factors (demographic, labour statistics and infrastructure
availability) weighing in, but to a slightly lesser extent. In addition, our focus and expertise in emerging and
frontier markets has dictated this bias towards industry size and growth to ensure we are able to identify
opportunities in countries where regulatory frameworks are not as developed and industry sizes are not as
big (in USD terms) as in developed markets, but where we know there is a strong desire to invest.
Indicators - Explanation And Sources
Table: Food & Drink (Alcoholic Drinks) Risk/Reward Index, Indicators

Rewards
Industry Rewards
Alcohol Consumption Per BMI Forecast Denotes per capita consumption of Alcoholic Drinks in litres. Measures
Capita which populations consume more on alcohol products at the individual
level rather than total size.
Alcohol 5-Year Growth BMI Forecast Denotes Alcoholic Drinks sector dynamism as a %. Scores based on
Rate annual average growth over our five-year forecast period.
Total Alcohol Consumption BMI Forecast Denotes total consumption of Alcoholic Drinks in millions of litres. Large
markets score higher than smaller ones.
Country Rewards
Population BMI Forecast Size of the population in millions as a measure for the total addressable
market.
Mass Affluent Class BMI Forecast Proportion of households with an income that exceeds USD10,000.
Excludes those in poverty but demonstrates potential demand for
branded alcohol products.
Urban Population BMI Forecast Size of the urban population in millions. Higher urban population size is
a positive for distribution, higher economic development and accessing
products through a network of retailers.
Spending Population BMI Forecast Proportion of the population between 20-39 years old as a %. This is
typically the range that companies target as a high spending/
trendsetting generation and are generally over the legal drinking age.
Risks
Industry Risks
Regulatory Environment BMI Uses Operational Risk's Economic Openness as a proxy for
Operational determining the ease of entering and doing business in a market.
Risk Index

Food & Drink (Alcoholic Drinks) Risk/Reward Index, Indicators - Continued

F&D Formalisation BMI Forecast Uses our Urban/Rural Split (%) data as a proxy for determining the level
of retail/hospitality formalisation in the market. Highly urbanised
markets allow companies to easily serve more consumers.
Logistics Risk BMI Uses Operational Risk's Logistics Risk to determine the risks and costs
Operational associated with moving products around a market. Higher scores
Risk Index indicate quality transport, cheap fuel/electricity and high levels of tech
adoption
Country Risks
Long Term Economic Risk BMI Country The LT ERI takes into account the structural characteristics of
Index Risk Index economic growth, the labour market, price stability, exchange rate
stability and the sustainability of the balance of payments, as well as
fiscal and external debt outlooks for the coming decade.
Short Term Economic Risk BMI Country The ST ERI seeks to define current vulnerabilities and assess real GDP
Index Risk Index growth, inflation, unemployment, exchange rate fluctuation, balance of
payments dynamics, as well as fiscal and external debt credentials over
the coming two years
Long Term Political Risk BMI Country The LT PRI assesses a country's structural political characteristics
Index Risk Index based on our assumption that liberal, democratic states with no
sectarian tensions and broad-based income equality exhibit the
strongest characteristics in favour of political stability, over a multiyear
timeframe.
Short Term Political Risk BMI Country The ST PRI assesses pertinent political risks to investment climate
Index Risk Index stability over a shorter time frame, up to 24 months forward.
Op Risk Index BMI The ORI focuses on existing conditions relating to four main risk areas:
Operational Labour Market, Trade and Investment, Logistics, and Crime and
Risk Index Security.
Source: BMI

Reproduced with permission of copyright owner. Further reproduction
prohibited without permission.

Saudi Arabia Food Market

Enviado por

Dados do documento

Título original

Direitos autorais

Formatos disponíveis

Compartilhar este documento

Compartilhar ou incorporar documento

Opções de compartilhamento

Você considera este documento útil?

Este conteúdo é inapropriado?

Direitos autorais:

Formatos disponíveis

Saudi Arabia Food Market

Enviado por

Direitos autorais:

Formatos disponíveis

Q1 2018

Published by:BMI Research

Part of BMI’s Industry Report & Forecasts Series

Published by: BMI Research

Copy deadline: October 2017

BMI Research © 2017 Business Monitor International Ltd

BMI Industry View ............................................................................................................... 7

Industry Forecast .............................................................................................................. 11

Industry Risk/Reward Index ............................................................................................. 20

Market Overview ............................................................................................................... 29

Competitive Landscape .................................................................................................... 36

Company Profile ................................................................................................................ 38

© Business Monitor International Ltd Page 4

Carrefour MAF ....................................................................................................................................... 48

Demographic Forecast ..................................................................................................... 56

© Business Monitor International Ltd Page 5

BMI Industry View

Food And Drink Spending

e/f = BMI estimate/forecast. Source: BMI, national statistics

Latest Updates And Industry Developments

© Business Monitor International Ltd Page 7

© Business Monitor International Ltd Page 8

© Business Monitor International Ltd Page 9

SWOT Analysis - Continued

© Business Monitor International Ltd Page 10

e/f = BMI estimate/forecast. Source: BMI, national statistics

© Business Monitor International Ltd Page 11

© Business Monitor International Ltd Page 12

Table: Food Sales (Saudi Arabia 2014-2021)

2014 2015 2016e 2017f 2018f 2019f 2020f 2021f

© Business Monitor International Ltd Page 13

Food Sales (Saudi Arabia 2014-2021) - Continued

2014 2015 2016e 2017f 2018f 2019f 2020f 2021f

e/f = BMI estimate/forecast. Source: BMI, national statistics

© Business Monitor International Ltd Page 14

Non-Alcoholic Drinks Sales

e/f = BMI estimate/forecast. Source: BMI, national statistics

© Business Monitor International Ltd Page 15

© Business Monitor International Ltd Page 16

Table: Non-Alcoholic Drinks Sales (Saudi Arabia 2014-2021)

2014 2015 2016e 2017f 2018f 2019f 2020f 2021f

e/f = BMI estimate/forecast. Source: BMI, national statistics

© Business Monitor International Ltd Page 17

Mass Grocery Retail

© Business Monitor International Ltd Page 18

© Business Monitor International Ltd Page 19

Industry Risk/Reward Index

Middle East Remains Top Pick To North Africa

Main Regional Features And Latest Updates

© Business Monitor International Ltd Page 20

Strong Rewards Balanced With Risks

Sin Tax: Not A Major Threat To Consumption

© Business Monitor International Ltd Page 21

Affluent Consumer Able To Absorb Added Cost

f = BMI forecast. Source: BMI, UAE National Bureau of Statistics

Below we outline the key factors behind this modest revision:

© Business Monitor International Ltd Page 22

UAE Still An Outperformer

© Business Monitor International Ltd Page 23

UAE Top Market

Morocco Outperforms North Africa And Two GCC Markets

© Business Monitor International Ltd Page 24

Morocco Offers Large Consumer Base