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CRITIQUE/BACKGROUNG REPORT: FAST FOOD IN MENA

GMS 315B
GRP 6

1. Introduction to the Middle East & North Africa

The Middle East and North Africa (MENA) is an economically and socially diverse region that
includes both the oil-rich economies in the Gulf and countries that are resource-scarce in relation
to their population.

For the purposes of the presentation, the presenting group has decided to go with the World
Bank’s definition of MENA which comprises of 20 countries: Algeria, Bahrain, Djibouti, Egypt,
Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Malta, Morocco, Oman, Qatar, Saudi Arabia,
Syria, Tunisia, United Arab Emirates, West Bank and Gaza and Yemen. These 20 countries are
collectively home to more than 355 million people from varied religions and backgrounds.1

Map of the MENA Region*


*According to the World Bank, Western
Sahara and Mauritania are not
included in the MENA. Iran (area east
of Iraq) is included.

The following is some macroeconomic data2 of the MENA region at a glance:

1
World Bank Website -
http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/MENAEXT/0,,menuPK:247603~pagePK:158889~piPK:146815~theSite
PK:256299,00.html
2
Data obtained from geo.worldbank.org and the CIA World Fact Book.
Prepared by: Kevin Chan, Chua Yu Yan, Koh Ling Yi, Priscilla Ng and Walter Yeo 1
CRITIQUE/BACKGROUNG REPORT: FAST FOOD IN MENA
GMS 315B
GRP 6

2. The retail food market in MENA

The retail food market in the Middle East and North African region is estimated to be
USD87.6bn in 2009. This constitutes 53% of the growing USD165bn retail sales in the region.
Egypt, the largest food market, accounted for 51% of the food sales in the MENA region with a
total food retail value of USD44.8bn in 2009. On the food service establishment front, fast-food
franchise business have grown steadily in the MENA region, with several well-known brands
(such as Kentucky Fried Chicken, Pizza Hut and McDonalds) penetrating the market during the
last twenty years. The franchise industry in the MENA region was valued at over USD14bn in
2008.3

3. Key growth drivers, risks and markets within MENA4

Key growth drivers Key risks

· Large youth base · Volatility of food prices


· Changing lifestyles, increase in number of · Increasing competition
working women · Shortage of arable land and limited water
· Increasingly westernized habits supply in MENA
· High average population growth (2%) · Skepticism about merits of processed food
· Restaurants are a primary source of and quality
entertainment for families in the GCC (Gulf · Anti-American sentiments
Cooperation Council) markets
· Sizable & growing food market, currently
valued at USD44.8bn
· Increased ease of doing business

Key growth markets within MENA

Egypt: Accounts for 51% of food sales in MENA. Under penetrated as vast majority still
prefer traditional fresh food products. Low - middle income

Saudi Arabia: Accounts for 75% of fast food consumption within the Gulf, increased demand
more convenience products, attractive consumer market

Kuwait: High GDP per capita, young expatriate population

3
Kuwait Food Company, Regional Food Report, Capital Research Report -
http://docs.google.com/viewer?a=v&q=cache:nJVe46UjMQwJ:www.gulfbase.com/site/interface/SpecialReport/FO
OD_21062010.pdf+market+share+of+fast+food+restaurants+in+MENA&hl=en&pid=bl&srcid=ADGEESh3mZsWbm2
LYVibFTXeSSF68NqcG5LvIQZBR-u074e3saZT-
6EljJxzcENLECiZVOqDLtYk7msmKRIoMRZ6AgSYUza_9u4AE2kYY63OWFB5qx83sLXUr2gJe07tSt31sae1Ripr&sig
=AHIEtbS9qnuUK095ovQtFQpfdnzccgKirA
4
Kuwait Food Company, Regional Food Report, Capital Research Report
Prepared by: Kevin Chan, Chua Yu Yan, Koh Ling Yi, Priscilla Ng and Walter Yeo 2
CRITIQUE/BACKGROUNG REPORT: FAST FOOD IN MENA
GMS 315B
GRP 6

4. Key fast food players in MENA5


Although there are many restaurants and street-side stalls available in the MENA region, only a
few large players like Kuwait Food Company, Hana International and the Alsaya group dominate
the fast food industry.6

The fast food industry relies heavily on imports as the local food manufacturing sector is
underpenetrated due to a shortage of water supply and arable land.

5
Table produced with research from the following sources:
- Mo’men Main Website – http://www.momen-restaurant.com
- McDonald’s Arabia – http://www.mcdonaldsarabia.com/ and authors estimates
- Herfy main website – http://www.herfy.com
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Kuwait Food Company, Regional Food Report, Capital Research
Prepared by: Kevin Chan, Chua Yu Yan, Koh Ling Yi, Priscilla Ng and Walter Yeo 3

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