Canned Tuna in the Middle East: A market searching for profit ? May 2018 Arnab Sengupta
This document aims to answer the following: Key Questions 1 Is Middle East an interesting market for canned tuna? 2 Parameters of tuna consumption we should know while entering ME 3 What should be done to gain more market share
Table of Contents Tuna Market Overview Middle East Food Retail How to we consume Tuna
Middle East Tuna Market: Overview Tuna consumption in Middle East and North African is primarily in canned format some local catch, negligible in frozen format. In canned format the market is around $800M Growing Interest from Frozen is limited to international brands , very niche sushi though the market is stores and some driven by familiarity local coastal catch and heritage. Rio near Oman and Mare, John West Yemen. Catching's carving a niche in the are seasonal, near premium segment. coast and not Growth for profit, consistent current mantra The region does not have any non tariff barriers. Arab league 0% rest of the world 5%. Sustainability growing interest. Though a region bound by language and religion, tuna eating 4 hobbits differ.
Market Sizes – Canned Tuna Tuna market size The canned tuna market in the region is is big, but around USD 800 Milliom, (at the store level) falling… will it with major markets being Saudi Arabia, stabilize and Libya and Egypt, and UAE. grow? P AFRICAN: Import Of Canned Tuna From Thailand Divided Into Major Destinations In M/T, CFR Perl M/T 2016 2017 Diff. % M/T CFR M/T CFR M/T CFR Egypt 57,000 $2,757 28,688 $ 2,897 -50% 5 % Libyan 33,817 $3,946 23,786 $4,306 -30% 9 % Algeria 4,246 $4,183 4,830 $4,636 14% 11 % Tunisia 6,315 $3,725 570 $3,958 -91 % 6 % Djibouti 1,647 $3,829 910 $3,761 -45 % -2 % Others 2,201 $3,402 2,048 $3,567 -7 % 5 % Grand Total 105,251 $ 21,842 60,832 $ 23,125 -195 % 79 % -32 % 9 % Saudi Arabia 27,150 $4,025 18,437 $4,401 17 % 9 % UAE 15,369 $4,059 17,957 $4,425 Volume declining due to downsizing and -7 % 7 % Israel 11,369 $3,951 10,621 $4,223 reduced share of stomach as prices go up Jordan 9,230 $3,753 8,013 $4,089 -13 % 9 % Exchange rate devaluation increasing Lebanon 6,967 $4,460 6,049 $4,792 -13 % 7 % prices in North Africa Yemen 7,188 $3,608 4,150 $4,012 -42 % 11 % Kuwait 4,475 $4,654 5,751 $4,765 29 % 2 % Credit tightening in Arab countries after oil Syrian 3,482 $3,212 3,126 $3,469 -10 % 8 % price collapse. Qatar 2,051 $ 4,038 1,554 $ 3,797 -24 % -6 % Oman 1,910 $ 3,770 1,603 $ 4,115 -16 % 9 % Others 10,452 $ 4,171 10,153 $ 4,405 -2.9 % 6 % 99,643 43,701 87,414 46,493 -1 1 Grand Total 5 5 Source: Thai Customs
Sinusoidal Volume Behavior with 50%+ Value Captured by Libya and Egypt Tuna Volumes Full Year Trend Tuna Value Market Distribution 4,000 3,401 3,092 3,013 2,999 22 3,000 2,578 33 2,206 2,205 35 36 2,092 2,080 1,967 1,872 2,000 1,431 2,193 1,555 1,000 40 0 2011 12 13 14 15 16 17 33 36 36 Africa VOL-FCL Mid-East VOL-FCL 3 Tuna Value Trend 3 2 74,202 73,882 2 73,412 66,636 75,000 64,253 69,779 29 70,000 27 58,330 23 22 63,614 66,734 65,000 59,388 51,910 57,074 60,000 6 4 4 4 55,000 44,938 48,299 50,000 2013 Val by 2014 Val by 2015 Val by 2016 Val by mkt in USD mkt in USD mkt in USD mkt in USD 0 2011 12 13 14 15 16 17 LIBYA EGY KWT KSA UAE ME Avg. Price per FCL in USD 6 A Africa Avg. Price per FCL
Typical Value Chain of Middle East Market for Tuna Typical Seafood Value Chain Distributors Scope of Direct Influence Wild-Caught Retailer Dist. (WC) Harvesting • Regional wild- Wholesaler Dist. capture Processing Import to M.E. HORECA Dist. • Transfer to processing • Merchandising and • Warehousing, • Primary • Import clearance assortment Processing validation • Transfer to store Farm-Raised • Sales & Promo • Freezing for • Regulatory (FR) Production Planning storing and checks at transport destination port • Insignificant Quality Assurance • Secondary • Transfer to • Product & Shipment Audits Processing domestic (fileting, distribution • Specification verifications trimming, • Payment • Price control. Variable packing) alignment margin • Canning or retail pack frozen • Transfer to port 7 of exit
Table of Contents Tuna Market Overview Middle East Food Retail How to we consume Tuna
World and Regional Population Growth (2010-2020) …% CAGR (2010-20) World Population, World Population: Breakdown by Region, year 2020 , Bn Bn 0.80% 0.04% 0.50% 1.20% 0.30% 2.20% 1.50% 1.60% 2.60% 7.7 6.9 1.8 0.7 0.5 0.1 The GCC 1.43 1.35 0.2 0.1 population 3.9 1.08 0.9 3.3 growth (2010- 0.7 0.74 0.4 0.8 2020) is one of 0.1 0.3 1.2 0.2 1.2 0.38 0.2 the highest 0.30 0.4 0.23 0.1 0.2 0.5 0.06 0.4 0.2 0.1 0.4 2.0 0.1 0.1 globally 1.8 0.3 0.1 0.1 0.1 0.1 North Europe China India Rest of The GCC Rest of North Rest of 2010 2020 America Asia Middle Africa Africa East 65 Years and Above 35-64 15-34 0-14 Source: IMF and Frost & Sullivan Research 9
Catering to the new generation consumer is key in the GCC The GCC Population, Mn. Classification/ Categorisation of the Consumer segments 1.9 Generation X - Typically born before the 70s. • Has less impact of the Oil boom in the GCC and more into 1.3 39% traditional consumer behaviour with relative loyalty to a Generation Y+Z 23.1 1.0 few brands 19.0 account on Generation Y/ Millennials – Born in the 80s and 90s. 14.3 0.9 overall • Self-involved, Dependent, Racially and Ethnically diverse 35% 9.7 group raised during the explosion of TV and Internet. Less population by 20.9 loyal towards brands 19.7 2020 and are 18.5 14.2 Generation Z – Born after 2000 highly influential • Anxious, Highly connected, living in an age of high-tech 24% communication, technology driven lifestyles and prolific use on Generation 14.1 12.7 11.6 11.0 of social media with mindful of the future X purchases 2005 2010 2015 2020 0-14 15-34 35-64 65 Years and Above Source: Frost & Sullivan Research 10
Megatrends Shaping up the Food & Beverages Sector HEALTH & Megatrends POPULATION URBANIZATION GLOBALISATION WELLNESS Growing Baseline Improving rate of ‘Good For You’ Exposure to Market organization of the Campaign multicuisine / Industry products Creating a Pool of Sub Trends Change in Result of Megatrends Growing Income Choice to Choose Quick Serve Healthy Food Lifestyles Product Level Impact Industry Level Impact Product Micro Processed Food Food Retail Categories Segmentation 11
Categorizing consumer trends Something which offers No artificial ease towards multiple ingredients, consumption occasions low fat, high fibre and on the go. Also, which Product which is organic version of suits the ‘Style new to products Statement’ the palate Good for you! Packaging Taste Nutritional Functional Consumption Facts Products Experience Increasing habit of Look out for functional Products which suit reading labels to products which reduce ‘Snackification’ understand product risk of chronic diseases while skipping claims and beyond basic conventional meals. nutritional facts nutritional functions Source: Frost & Sullivan Research 12
Which segment companies should act? Ready to eat, Protein based Products with benefits breakfast offering added benefits Opportunity for Opportunity for • • Dairy companies Meat processing companies DINNER • • Beverage companies Bakery companies BREAKFAST • • Snack companies Breakfast cereal companies • Nutraceutical companies SNACKS Target consumer segment Target consumer segment LUNCH • • Generation Y and Entire range of consumers Generation Z • Probably focus on kids 13
Table of Contents Tuna Market Overview Middle East Food Retail How to we consume Tuna
Consumer Insights 15
Cooking still a domain of Housewife The majority of consumers claim to do most of the cooking themselves – Some get help from house maid or other members of the family Working women rely heavily on housemaid Housewife is always Cooking seen to be the duty of a good challenged to prepare wife and mother – Some do not openly admit to dishes all will like getting help Men feel that only the lady of the house should cook, seen as a matter of pride – Makes him feel important if she cares enough to cook for him 16
Lunch is the Main Meal of the Day Lunch requires the most planning and preparation – More complex / heavy Lunch in Arab world can happen – Entire family sits together at 5pm meal – Main meal of the day when we sit Dinner is often unplanned and spur of together and eat the moment – Lighter – More diverse / variety – Family may eat independently LUNCH Breakfast is a very individual meal – Except Fridays which turns into DINNER brunch – Light cold dishes mostly – Diverse / variety of dishes BREAKFAST 17
TUNA BUYING HABITS 18
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