Forecast to record a tentative recovery in 2010, Kuwait’s export oriented economy came under strain in

2009 as depressed global sentiment weighed down energy export revenues. Driven by public sector

spending, BMI expects GDP growth to come in at 2% in 2010, which will be welcomed by Kuwait’s

fairly dynamic food processing industry as discussed in BMI’s recently published Kuwait Food & Drink

Report for Q210.

On the back of the anticipated economic recovery, BMI expects headline food consumption in Kuwait to

increase 3.8% to KWD0.72bn (US$2.51bn) in 2010. While consumer sentiment is likely to remain some

way off the period leading up to the global downturn when the trend towards premiumisation was at its

sharpest, the improving state of the consumer will nonetheless be welcomed by leading Kuwaiti food and

drink companies like Americana (Kuwait Food Company). Operating assets across the food, drink and

food services industries, Americana is a major regional player with an annual turnover close to US$2bn.

Unsurprisingly given Kuwait’s high disposable income profile and the similarity in consumer tastes and

preferences to most of the wider Gulf region, Kuwait possesses a well-developed dairy industry that

leverages off the spending power of the population and wide consumption of dairy products (estimated at

more than 50 kilograms per capita annually).

Leading industry players include Kuwait Danish Dairy and Kuwait Dairy Corporation, both of whom

are vertically integrated with exposure to segments ranging form fresh milk to ice cream. However, their

ability to pursue major expansion regionally is hamstrung somewhat by the sheer weight of competition

with Saudi Arabia in particular possessing a notably strong dairy industry.

While the small size of the Kuwaiti market caps the long-term volume and value growth opportunities on

offer, premiumisation opportunities across all segments of the food industry should continue to present

themselves over BMI’s forecast period to 2014. Beyond 2010, between 2011 and 2014, BMI expects

modest growth in headline food consumption at 9.2% to KWD0.8bn.