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Food Importers: New opportunity in the Middle East food marketThe Middle East food market is developing great potential regarding the food market and the related sectors like restoration and food equipment. The reasons of this growth can be find in the huge pro capita income, often tax free, that temp consumer to spend money for food products, and in the even larger investment of western companies in the countries of the Gulf Cooperation Council: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates (UAE). The GCC countries have very small trade barriers and are very open to western products. These countries import more than 90% of food products and equipment because the duties on food products range are from 0 % to 12%. Moreover the presence of a great rate of foreign workforce in the area contributes to the growth of the food importers from other countries to satisfy the different eating habits of the people living there. Also for this reason even more multinational restaurant chains decide to open restaurants and fast food there: more then 50% of the franchise market is represented from restaurant chains. Middle Eastern consumer are attracted from the western eating habits and also from the efficiency of the western franchise model. Many of Middle eastern inhabitants have travelled in Europe and USA to study or for pleasure and when they return home, they like to find western food and eating habits also in their countries. That's is important for the food importers. Related to the spreading of fast foods and franchise restaurant is the development of shopping malls where the restoration point are very important to attract customers. They prefer to eat in fast food then in traditional restaurant because of convenience, consistency and above all the high persuasive image of western foods. This persuasion is persuade especially young people under 25 years that have money to spend in shopping centres and in fast food chains. In the last years the majority of customer in the region are in this age band and their foods needs are different from that of their parents, the young are oriented to western life style and consequent eating habits. This growing demand for western food and the high disposable income of the customer promote also the spread of large supermarkets, related also to the climate condition of the region the demand of beverage increases every year and there is the necessity of new retail points. Another factor that increase the potential of the food market in Middle East is the growing of the tourism industry, 25 % of tourism comes from Europe and consequently the visitors have pleasure to find their own dishes when they eat in the holiday village on the coast. But also the internal tourist flow increase the growth of restaurant chains and hotels. This can be a good opportunity to invest in Middle East, but operators have express concern over difficulty with source and distribution, but the distribution problems will be explained later. The shopping malls are not only used for buying goods, but they are considered also a new place where to make conversation and socialise with other people. The comfort of the malls, with air condition systems in region where the climate conditions don't allow a comfortable life, improves the socialisation opportunity for young people, women and extended families. The low rate of employed women - 90% of the inhabitants of the Middle East are Muslims and the woman has very low possibilities to emancipate herself - let possible the attendance of shopping centres, where men bring their wives to buy but also to frequent the extended family in a comfortable place. But there are also some problems that obstruct the increasingly development of the food market, as said above the difficulty of distribution, the dependence on central market and the concentration in few hands of the importer power. The Middle East is a difficult region for distribution and conservation of goods because of its climate conditions and lack of specific infrastructures: western companies have difficulty to store high volume of goods, but there are emerging distributors that accept to build the proper location with refrigerators and storage possibility to encounter the needs of western operators in the area. Without refrigeration and refrigerated truck the shipping and the distribution of some kinds of foodstuff is impossible. Key distributors for big geographical areas are emerging, but their numbers is few. Another problem is the dependence of restaurants on the central market of the city for every day needs, but the growing presence of chain restaurants and fast foods is changing this habits: the franchise companies build their own distribution channel in each country to encounter their needs and to overcome the difficulty represented from the traditional market and from the insufficient infrastructures. In the GCC countries there are numerous food importers, wholesalers, retailers and distributors, but in each country only a very small number of importers controls the retail food sector. Food manufacturers turn to agency importers, wholesalers or western consolidators. Consolidators act or as sole distributors for western manufactures or they sell directly to importers, importers then distribute in the country trough their distribution channels. |
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