Consumer and business sentiment towards the UAE has improved significantly since the start of the year…
(PRWEB UK) 30 September 2013
Business Monitor has just released their latest findings on the UAE’s high spending food and drink sector in their newly-published UAE Food & Drink Report.
Business Monitor predicts that the outlook for the UAE in 2013 and beyond remains promising. Their baseline scenario sees real GDP expanding by 3.2% and 3.8% in 2013 and 2014 respectively, a slight slowdown from growth of 4.1% recorded in 2012. They identify that most of this growth will be driven by the non-oil economy which is showing increasing signs of promise in several leading indicators. Consumer and business sentiment towards the UAE has improved significantly since the start of the year, with real estate and equity markets showing the most notable signs of improvement.
Headline Industry Data
■ In 2013, Business Monitor expect total food consumption to increase by 5.3% in local currency terms. Over their five year forecast period to 2017, they expect total food consumption to increase at a compound annual rate of
■ Soft drinks volume sales are forecast to increase by 3.6% in 2013. To 2017, Business Monitor forecast compound annual growth of 3.3%.
■ They forecast mass grocery retail sales to increase by 8.4 % in 2013 in local currency terms. To 2017, mass grocery retail sales are forecast to grow at a compound annual rate of 11.2%.
Key Industry Trends and Developments
Amira Nature Foods Looks to Organics: In summer 2013, United Arab Emirates-based rice supplier Amira Nature Foods announced plans to set up a division to tap into the 'growing global demand' for organic foods. According to chairman and CEO, Karan Chanana, 'Similar to the demand for rice, the demand for organic packaged foods continues to grow globally and we believe Amira is well positioned to take advantage of these future growth opportunities as we increasingly provide a broader assortment of value added food products to serve the international market's consumer preferences and local tastes.'
Majid Al-Futtaim, The Region's Potential Retail Leader: UAE based Majid Al-Futtaim (MAF) has continued to emerge as one of the GCC's leading retail figures. Business Monitor believes that with impressive exposure across key high-growth markets, the retailer's recent uptick in both regional and overseas investment points to continuing success as it increases its hold on this increasingly dynamic segment. MAF's purchase in June 2013 of the Carrefour-owned 25% stake in its hypermarket business, for approximately EUR530mn, has only strengthened its position to further increase its exposure in the UAE and beyond. MAF is now well positioned to expand operations both domestically and internationally (a promising prospect for the company), whilst it retains the Carrefour banner as its franchise agreement has been extended until 2025.
Risks to Outlook
Business Monitor believes that politically, any attack by Islamist militants would result in a fundamental reappraisal of the UAE's, and the wider regions, risk profile. Furthermore, any increased uptick in tension between the West and Iran could result in the deterioration in the UAE's sovereign risk profile given the close proximity and deep trade ties between the two countries. Looking at economic factors, with global growth slowing, downside risks to oil prices in 2013 are elevated, which could undermine the UAE's already fragile macroeconomic recovery.
For more information on the UAE Food & Drink Report please visit our website or contact Sarah Sutcliffe for more information: press(at)businessmonitor(dot)com.
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