Did you know that the Middle East market for food and beverage products is on fire? In just a short two years, Eli’s Cheesecakes in the Midwest now exports about 10 percent of their product to a network of 185 restaurants in five Middle Eastern markets.  Eli’s said that because of its export strategy, the company has grown by 50 percent in the past year.  

“What most Americans don’t realize is that the Middle East is the world’s fastest growing food and beverage market”, says John Matthews of International Brand Services Export company.  The GCC countries are now importing 90% of their food needs, or over US$12 billion worth of food annually.  Here are some impressive statistics:

  • Consumer ready products account for nearly 50% of American food exports to the region.
  • U.S. restaurant concepts represent an estimated 50% of the $US 31 Billion Food Service sector.Elis_logo
  • Wine and spirit sales are also on the rise in the Middle East.  Dubai International Airport retail outlet Le Clos has this year seen a “marked increase” in the number of wine and spirits connoisseurs seeking out exclusive vintages and brands. According to Humphrey Serjeantson of IWSR, a London-based market-research firm, “Sales of alcohol in the Middle East, where Muslims dominate, grew by 72% between 2001 and 2011, against a global average of 30%. That rise is unlikely to be accounted for by non-Muslims and foreigners alone.“

What is driving this demand?

Resource constrained, these countries are depending on imports to fill the gap between limited domestic food production (only 1.4% arable land) and demand from a young population that is growing three times the global average. Also contributing to demand are some of the world’s highest per capita incomes and a dramatic increase in tourism – driving Dubai to add 400 hotels and over 50,000 beds in the past 5 years.

  • Increased exposure to Western style foods through global communications, social media and travel continues to impact demand and preference for American brands, considered to be high quality, innovative and “cool” to these younger populations.
  • When you build a brand in the Middle East, you are also building a brand in the Philippines, Pakistan and India, due to the large number of middle management and laborers from these countries who live in the GCC markets.
  • When you build a brand in the Middle East, you are also building a brand in the Philippines, Pakistan and India, due to the large number of middle management and laborers from these countries who live in the GCC markets.

Middle Easterners are also experiencing a change in how they buy products:

  • Hypermarkets and Supermarkets now account for over 50% of all retail sales.
  • Major retail chains include LuLu, Spinneys, Al Panda, Tamimi (initially a partnership with Safeway) and Carrefour, all using similar formats that have the same consumer appeal as US chains.
  • Smaller convenience stores are key suppliers in rural areas and have transformed to the Western “Convenience” store format for last minute purchases in the major cities.

Five steps for getting traction in these markets.

Doing business in the Middle East is unlike any other export market. As exports of consumer food and beverage products continue to grow three times faster than domestic sales, companies need to understand the unique nature of doing business in these markets.

In the last few years, over 20 Free Trade agreements have lowered trade restrictions for US products, giving American suppliers unprecedented access to Middle Eastern markets, particularly for exporters of value-added food and agricultural products.  Aside from language and cultural differences, each of the countries have increased their regulatory and labeling requirements.  Import requirements also parallel Islamic tenants.

To help navigate the complexities, there are also several well-established export companies in the US that manage American brands in the Middle East, so that companies don’t have to develop a skill base or infrastructure in this area. These exporters act as a company’s export sales department, reducing the risk of not understanding local requirements.  In addition, the US government has created matching funds programs, which support the promotion of American food and agricultural products in foreign markets.  So ask yourself what it will take to leverage these opportunities as a core growth strategy? Here are five steps you should consider in building this strategy:

STEP ONE: Research which food and beverage categories are right for your products.

STEP TWO: Investigate the local regulatory and labeling requirements

STEP THREE: Develop an entry strategy by market and by channel

STEP FOUR: Explore potential partner opportunities

STEP FIVE: Develop an export growth plan that generates significant, sustained results for your products.

GCC countries include: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE


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ABOUT THE AUTHOR. Deborah Steinthal is Founder and Managing Director of Scion Advisors, a leading boutique, strategy consulting firm serving the U.S. wine industry. With a proven approach enabling business owners to position for profitable growth or for exit, she has worked alongside over 150 winery owners and CEOs; and has moderated over 80 Winery CEO Roundtables involving more than 50 top wine industry CEOs for over a decade. Deborah’s expertise is in the area of business growth strategy, family business transformation, and board and leadership development.

Based out of McMinnville, Oregon; born in Lima, Peru; raised in Belgium and Germany; Deborah has lived, worked and travelled globally. She is broadly published in the national business press, an invited speaker, panelist and widely quoted for research on key practices, such as such as How to Build a Pull Brand, Digital Commerce and Family Business Transition.

For more information call Deborah Steinthal at 707.246.6830.

Among her clients: Cristom Vineyards, Adelsheim Vineyard, Wine by Joe, DeLille Cellars, Woodward Canyon Winery, OVS, Willakenzie, Elizabeth Chambers Cellar, Patz & Hall Winery, Benziger Family Vineyards, Calera Wine Company, Delicato Family VIneyards, Cakebread, Spottswoode, Gundlach Bundschu, Luna Vineyards, Clos Du Val, Quail’s Gate Winery, Wente, J. Lohr, Choice Lunch,
 Cowgirl Creamery, 
Easton Malloy 
(producers of Peppermint Bark for Williams-Sonoma)
, and McEvoy Ranch.

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