MARKET ACCESS SECRETARIAT Global Analysis Report

Inside Gulf Cooperation Council (GCC)

The Fish and Seafood Trade

December 2015

TRADE SUMMARY CONTENTS

The Gulf Cooperative Council (GCC) is today home to some of the Trade Summary ...... 1 fastest growing economies in the world with a shared vision of prosperity and combined have with more than 37 million residents Canadian Performace vs United located in Saudi Arabia, the United Arab Emirates (UAE), Oman, States ...... 2 Bahrain, Qatar and Kuwait. Trade ...... 2 The GCC has limited local agricultural production, and an ever growing demand for imported agri-food, fish and seafood products; in addition to Top Ten Fish and Seafood Suppliers a strong re-export market to neighbouring countries. Canadian agri- to GCC in 2014 ...... 5 food products are seen as high-quality, with a distinctive clean, pure and safe image. Logistics ...... 6

Fish and Seafood Market Sizes The GCC imported US$995.5 million worth of fish and seafood and Drivers ...... 7 products from the world in 2014, an increase of 21.4% from 2013. The GCC’s supply of fish and seafood products is diverse and is imported Market Shares by Company ...... 9 from over 50 countries. The top suppliers in 2014 were India with a 30.6% market share, Thailand (22.7%), and Indonesia (7.0%). In 2014, Foodservice ...... 10 Canada ranked 25th among the GCC’s supplying countries with 0.3% market share or US$2.9 million. Resources ...... 12

In 2014, the GCC’s primary fish and seafood imports included prepared not minced tuna/skipjack/bonito (US$263.5 million), frozen shrimps and prawns (US$222.3 million), frozen fish (US$69.0 million), fresh/chilled Atlantic salmon (US$50.2 million), and frozen squid and cuttle fish (US$31.7million).The top lobster imports were frozen lobster (US6.7 million) and live lobster (5.1 milion) in 2014.

The GCC exported US$100.4 million in fish and seafood products to the world in 2014, an increase of 5.2% from the previous year. The GCC’s leading exports were frozen crab (US$18.3 million), sardines (US$16.9 million), shrimp and prawns (US$10.6million), dried/smoked

shark fines (US$8.2 million), and dried fish Visit our online library of public (US$6.4 million). Top export destinations were Thailand (17.2%), South reports for more information on this Korea (15.2%), and Hong Kong (14.8%). and other markets.

CANADIAN PERFORMANCE VS THE UNITED STATES

• In 2014, Canada was the world’s eighth-largest exporter of fish and seafood products going to over 130 countries, representing an export value of over US$4.5 billion.

• Canada was the 25th-largest supplier of fish and seafood products to the GCC, with a market share of only 0.3% representing a value of just over US$2.9 million in 2014 (based on Global Trade Atlas data). This, however, represents an increase of 12.0% from 2013, due in large part to an increase in the imports of fresh and frozen Canadian lobster.

• The leading products imported by the GCC from Canada in 2014 included fresh lobster (US$1.5 million), frozen lobster (US$1.1 million), frozen fish (US$46,456), frozen/dried scallops (US$42,677) and frozen sole fillets (US$38,005). Lobster exports made up 89% of all Canadian fish and seafood exports to the region.

• The GCC was Canada’s 34th-largest destination market for fish and seafood products, and received less than 1% of Canada’s global exports in 2014.

• In comparison, the United States (U.S.) was the world’s fourth-largest fish and seafood products exporter with sales of over US$6.3 billion, and the eight-largest supplier of fish and seafood products to the GCC, with sales of US$19.6 million in 2014. This represents an increase of 13.6% over 2013.

• Although, U.S. exports to the GCC of fish and seafood products are diversified, a large portion (22.0%) is comprised of fresh/chilled lobster (US$3.1 million), frozen/dried scallops (US$2.5 million), frozen fish (US$1.2 million), frozen lobster (US$1.2 million) and fish fats and oils (US$0.9 million).

• In 2014, the main fish and seafood exporting U.S. states were Massachusetts with exports valued at US$4.4 million, New Jersey (US$3.7 million), California (US$2.6 million), Washington (US$2.4 million and New York (US$2.4 million).

TRADE

• In 2014, the GCC imported 56,436 tonnes of prepared tuna and skipjack, valued at more than US$263.5 million. For high-end products such as lobster, the GCC imported about US$16.8 million representing a volume of 1,054 tonnes.

Top Ten Suppliers of Fish and Seafood Products to the GCC and Top Imported Products in 2014 (Based on the world exports to the GCC)

Total Import Value Top Import Value Rank Country Top Import Supplied (US$) (US$) World 995,572,450 Prepared tuna/skipjack/bonito 263,500,951 1 India 304,774,133 Frozen shrimp and prawns 196,678,170 2 Thailand 226,462,782 Prepared tuna/skipjack/bonito 178,532,105 3 Indonesia 69,521,830 Prepared tuna/skipjack/bonito 56,476,169 4 China 66,761,541 Frozen or dried squid/cuttle fish 23,284,818 5 Norway 59,390,678 Fresh/chilled salmon 35,082,967 6 Taiwan 46,062,466 Frozen fish 31,329,427 7 United Kingdom 28,855,986 Fresh/chilled salmon 14,778,476 8 United States 19,650,141 Fresh/live/in brine lobster 3,104,894 9 Italy 18,161,506 Tuna/skipjack/bonito, not minced 16,253,902 10 Japan 16,570,467 Prepared mackerel 7,004,567 25 Canada 2,986,005 Fresh/live/in brine lobster 1,578,585 Source: Global Trade Altlase, 2015

Page | 2

Top Ten GCC Fish and Seafood Imports from the World in 2014

2014 Import Value % Share of Rank HS Code Products (US$) Total Imports 1 160414 Prepared tuna/skipjack/bonito 263,500,951 26.47 2 030617 Frozen shrimp and prawns 220,362,823 22.13 3 030389 Frozen fish 69,055,593 6.94 4 030214 Fresh or chilled salmon 50,224,566 5.04 5 030749 Frozen or dried cuttle fish and squid 31,707,437 3.18 6 030323 Frozen tilapia 29,117,934 2.92 7 030481 Frozen salmon fillets 17,705,371 1.78 8 160413 Prepared sardines 16,124,255 1.62 9 030619 Steamed/boiled or frozen crustaceans 14,552,984 1.46 10 030289 Fresh or chilled fish 13,284,192 1.33 Source: Global Trade Atlas, 2015.

• The GCC has rapidly emerged as a powerhouse in the culinary scene, and the UAE is one of the top destinations for premium seafood products. The booming foreign population, tourism industry and economic progress in the region have fuelled an increasing demand for high-end seafood products such as lobsters, scallops, and other high-quality fish.

• According to the FAO statistics, the average per capita consumption of fish and seafood for the Middle East in 2010 was 9.9 kg per year and growing. When taking only the GCC region into consideration however, the average per capita consumption is significantly higher at 14.4 kg per year.

• More specifically, the UAE has one of the world’s highest seafood consumption rates, estimated at 28.6 kg per year. Other countries in the region, such as in Qatar, also have a high seafood consumption rate at 24.5 kg per year, respectively (FAO Statistics). These factors alone could create opportunities for Canadian fish and seafood exports to the region.

• When looking at only lobster and lobster products suppliers to the GCC in 2014, India was that top supplier with sales of US$6.1 million and a market share of 36.4%, followed by the U.S. with US$5.4 million (32.1%) and Canada with sales reaching over US$2.6 million (15.9%). The top three supplying countries made up 84.4% of the overall market share thus indicating a very concentrated supply environment. In 2014, Canada experienced an increase in lobster sales of 33.8% and an increase in market share of 9.2% from a 6.7% in 2013.

Top Ten GCC Lobster Suppliers 2012-2014

Total Import Value (US$) % Share of Total Imports Rank Country 2012 2013 2014 2012 2013 2014 World 21,052,661 29,805,664 16,857,731 100.00 100.00 100.00 1 India 6,517,887 17,925,724 6,141,615 30.96 60.14 36.43 2 United States 6,836,430 6,019,451 5,411,601 32.47 20.20 32.10 3 Canada 1,963,697 1,999,784 2,675,321 9.33 6.71 15.87 4 Brazil 1,455,835 1,252,922 846,259 6.92 4.20 5.02 5 Singapore 1,286,401 1,083,530 733,515 6.11 3.64 4.35 6 Australia 477,192 349,236 383,920 2.27 1.17 2.28 7 United Kingdom 76,562 37,442 180,656 0.36 0.13 1.07 8 France 548,875 787,581 113,411 2.61 2.64 0.67 9 Netherlands 400,128 152,159 110,254 1.90 0.51 0.65 10 Thailand 5,510 20 93,535 0.03 0.00 0.55 Source: Global Trade Atlas, 2015.

Page | 3

GCC’s Top Five Lobster and Lobster Product Imports, US$ Millions

Total Value HS Value Market Share US$ million Product Description of imports Code 1 2 3 ($) India United States Canada 030612 Frozen lobster 6,732,423 3.7M 1.2M 1.0M United States Canada India 030622 Live/fresh lobster 5,128,815 3.1M 1.5M 0.2M Frozen rock lobster and other India Brazil United States 030611 3,989,914 crawfish 2.1M 0.8M 0.7M Live/fresh rock lobster and Australia India Netherlands 030621 607,740 crawfish 0.3M 0.1M 0.04M United States Singapore France 160530 Prepared lobster 398,840 0.3M <0.001M <0.001M Source: Global Trade Atlas, 2015.

Although the market for lobster is still being established, the large base of expatriates and high incomes in the region (and UAE in particular) provide for significant market growth potential. Furthermore, the activities around the 2020 World Expo, which will take place in Dubai, will mean an increase in the number of short term residents and visitors from East Asia, Europe, Canada and the USA, potentially expanding the demand for lobster and other high value crustaceans. The hospitality segment in particular offers much potential, as the hotels to be built in the lead up to the World Expo will bring the final hotel room capacity in the UAE to around 100,000 However, capitalizing on opportunities for lobster and other high value seafood in the market will require marketing efforts by Canadian stakeholders, as the Canada brand is still relatively unknown in this food category. . Trade shows in the region provide opportunities to showcase the Canadian fish and seafood industry,. As the flagship Gulfood narrows its focus on packaged food and beverage, SEAFEX(www.seafexme.com) is emerging as the premier show in the Middle East for the fish and seafood industry

Page | 4

TOP TEN FISH AND SEAFOOD SUPPLIERS TO THE GCC IN 2014 All of the figures listed below are in United States dollars

1. Imports from India 2. Imports from Thailand

Frozen shrimp and prawns 196.6M Prepared tuna/skipjack/bonito 178.5M

Frozen crustaceans, nesoi* 14.1M Frozen fish 16.2M

Fresh/chilled salmonidae 10.8M Frozen tilapia 7.9M

Frozen fish 8.9M Prepared sardines 4.8M

Frozen cold- water shrimp 7.0M Frozen shrimp and prawns 3.2M

3. Imports from Indonesia 4. Imports from China

Prepared tuna/skipjack/bonito 56.4M Frozen cuttle fish and squids 23.2M

Flour and pellets of molluscs, nesoi* 3.4M Frozen shrimp and prawns 15.4M

Preserved shrimp and prawns not in Frozen fish 2.7M 8.1M airtight container Prepared sardines 1.5M Frozen tilapia 4.5M

Frozen fish meat 1.2M Frozen fish 2.0M

5. Imports from Norway 6. Imports from Taiwan

Fresh/chilled salmon 35.0M Frozen fish 31.3M

Frozen salmon fillets 7.4M Frozen tilapia 11.6M

Smoked salmon 5.3M Frozen cuttle fish and squids 0.7M

Frozen salmon 3.5M Frozen seabass 0.5M

Fresh/chilled salmon fillet 3.1M Frozen shrimp and prawns 0.4M

7. Imports from United Kingdom 8. Imports from the United States

Fresh/chilled salmon 14.7M Fresh/chilled lobster 3.1M

Smoked salmon 3.6M Frozen scallops 2.4M

Prepared whole fish 1.6M Frozen fish 1.2M

Fresh/chilled tilapia 1.0M Frozen lobster 1.2M

Fresh/chilled salmon fillets 1.0M Fish fats and oils 0.9M

9. Imports from Italy 10. Imports from Japan

Prepared tuna/skipjack/bonito 16.2M Prepared mackerel 7.0M

Caviar Prepared tuna/skipjack/bonito 4.6M 0.7M Caviar substitutes 0.3M Prepared fish, nesoi* 1.3M

Frozen shrimp and prawns 0.2M Caviar substitutes 1.0M

Prepared fish 0.1M Frozen tuna/skipjack/bonito fillet 0.4M

* Nesoi= not elsewhere specified or indicated

Page | 5

LOGISTICS *this section is sourced from DFATD and AAFC’s briefing on Canadian lobster exports to the Gulf region

Live lobster is a fragile commodity and requires specialized handling and logistics. According to Canada’s locally engaged trade commissioner in Dubai, air transportation options to the GCC are limited and are the largest impediment in exporting lobster to the Gulf regions.

Lobster Producers/Freight Forwarder Perspective

High-quality lobster has to be exported "live" and is therefore air-shipped within a short time period after being caught. Shipping lobster from the east coast of Canada to final destinations in the Gulf region requires two carriers (often Air Canada and Emirates). It is often the case that only one of these carriers has adequate space and, as such, the shipment (a perishable good) is often held up in transit. To complicate matters further, shipments usually requires automotive transportation from Halifax harbour to a Canadian international airport where it will depart from in order to get to the Gulf region. As lobster shipments to this area are usually too small to warrant a separate shipping truck, shipments must wait until a truck carrying a separate, larger shipment (often destined for China or the U.S.) is available for transport.

Every time a plane lands or takes off, the lobster shipment is loaded and unloaded, thus exposing the lobsters to changes in pressure, and temperature as well as added vibration and shock. All of this adds to the mortality rate of the lobsters and reduces their life-span in the tanks at their final destination.

U.S. Fresh/Chilled Lobster and Lobster Product Exports to the GCC by Exit Port 2012-14 and % Share

US$ % Share Ports 2012 2013 2014 2012 2013 2014 All Ports 2,313,595 2,972,607 3,123,786 100.00 100.00 100.00 Logan Int’l Airport, MA 2,131,235 2,783,596 2,971,785 92.12 93.64 95.13 JFK Int’l Airport, NY 182,360 180,299 132,228 7.88 6.07 4.23 Regan National Airport, DC - 3,578 11,341 - 0.12 0.36 Philadelphia Int’l airport, PA - - 5,366 - - 0.17 Baltimore-Washington Int’l Airport, MD - - 3,066 - - 0.10 Chicago O’Hare Int’l Airport, IL - 5,134 - - 0.17 - Source: Global Trade Atlas, 2015.

The carriers have identified the inability of Canadian lobster producers to fill chartered flights with cargo, despite record catch volumes in recent years, as the main reason that the direct flights from Canada to the Gulf region are an expensive shipping option. The real issue, as stated by carriers, is that lobster producers are willing to abandon flight arrangements made with Canadian carriers in pursuit of cheaper shipping prices elsewhere.

Lobster producers/freight-forwarders will lobby for direct flights, citing a lack of capacity and logistical burdens, but even after a deal has been made to service them they will take their lobster into the U.S. or go to Toronto and find a cheaper flight to save as little as five cents per pound on shipping. For example, three years ago CargoJet put on a direct flight from Moncton to Europe after the lobster community pushed for a direct flight. During the time this flight was operational, CargoJet only ended up shipping 25,000 pounds of product per flight (despite offering 100,000 pounds of capacity). This failure by lobster producers to provide sufficient product to make a direct flight financially viable for carriers resulted in the cancellation of this direct flight service.

Page | 6

FISH AND SEAFOOD MARKET DRIVERS AND SIZES

The United Arab Emirates (UAE) is the Middle East’s second-largest economy, after Saudi Arabia, and is one of the wealthiest countries in the region on a per capita basis. These two countries alone are the best prospects for Canadian fish and seafood product exports. The locally engaged Canadian trade commissioner specifically highlighted the UAE as the largest and best market for Canadian seafood, including lobster, particularly due to the re-export factor to other regions within the GCC, the composition of a large expatriate community, and the influx of western tourists who are more familiar with the culinary attributes of products such as lobster, prawns and crab.

As a multicultural, high-income society with a significant number of expatriates and a highly sophisticated retail industry, the UAE is a bourgeoning market for innovative value-added products. In addition, according to Euromonitor, with obesity and diabetes a growing concern in the region, demand for healthy foods is expected to rise and opportunities for healthy and light value-added seafood products will see an increase also.

As in other parts of the world, consumers in the UAE and the Kingdom of Saudi Arabia (KSA) are increasingly purchasing their seafood from supermarkets and shopping malls. Though, not widely available, online fish retail stores are also a growing market presence, and work to deliver seafood directly to households in metropolitan cities such as Dubai, according to Euromonitor.

Historic/Forecast Processed Fish and Seafood*, Retail Value Sales in the GCC** in US$ Millions and Period Growth (%)

F F CAGR % CAGR % Category 2010 2014 2015 2019 F 2010-14 2015-19 Total Processed Fish and Seafood 570.6 694.10 715.20 823.90 5.0 3.6 Canned Fish and Seafood 94.62 110.28 113.6 125.66 3.9 2.6 Tuna 70.10 82.45 85.06 94.37 4.1 2.6 Other canned fish and seafood 20.64 23.58 24.2 26.56 3.4 2.4 Mackerel 2.50 2.72 2.77 3.03 2.2 2.2 Salmon 1.38 1.54 1.57 1.71 2.7 2.1 Chilled Fish and Seafood 335.28 414.98 427.07 500.16 5.5 4.0 Raw fish 222.61 287.05 296.82 356.08 6.6 4.7 Raw seafood 109.8 124.74 127.0 140.47 3.2 2.6 Coated fish and seafood 2.88 3.20 3.26 3.61 2.7 2.6 Frozen Fish and Seafood 134.66 162.17 167.78 190.92 4.8 3.3 Raw seafood 78.32 94.09 97.57 110.81 4.7 3.2 Coated fish and seafood 26.62 32.67 33.73 38.34 5.3 3.3 Raw fish 23.37 27.90 28.77 33.01 4.5 3.5 Other fish and seafood 6.36 7.51 7.72 8.75 4.3 3.2 Source: Datamonitor, July 2015 *Note: Fish-based ready meals have been excluded from this analysis, given the fact that they represent a small market **Note: for the above table the GCC is defined as Saudi Arabia and the United Arab Emirates

Fresh/Chilled

• The fresh/chilled fish and seafood market size in the GCC has been growing at a compound annual growth rate (CAGR) of 5.5% since 2010, reaching volume sale of over 105.2 million kilograms for a value of US$414.9 million in 2014. It is expected to continue growing at a rate of 4.0% until 2019, when it is forecasted to reach total volume sales of over 116.7 million kilogram for a value US$500.1 million.

• According to Datamonitor, raw fish was the largest sub-category in 2014 making up 69.1% of total value sales, followed by raw seafood (30.0%) and coated fish/seafood (<0.01%). The raw seafood sub-category

Page | 7

recorded at a CAGR of 3.2% from 2010-14 and is expected to grow at a CAGR of 2.6% over the forecasted period to 2019.

Canned

• The overall volume sales of canned/preserved fish and seafood had a CAGR of 3.1 % from 2010-14, and is expected to continue to increase by a CAGR of 2.3% though 2019. The growth in this sub-category can be attributed to the overall ease of use, affordability and innovative offerings.

• Canned fish and seafood represent 15.8% of total processed fish and seafood sales, reaching value sales of US$110.2 million and a volume of 24.8 million kilograms. Canned tuna represented 74.4% value sales with US$82.5 million for a volume of 19.5 million kilograms with in this sub-category.

Frozen

• Despite canned/preserved foods being generally less expensive, frozen alternatives are being increasingly sought by consumers. As such, frozen fish and seafood products are expected to increase in value and volume sales. The CAGR of 3.2% registered from 2010-14 in the frozen fish and seafood sub-category is expected to continue through 2019 and beyond.

Historic/Forecast Processed Fish and Seafood*, Retail Volume Sales in the GCC** in Millions of Kilograms and Period Growth (%)

F F CAGR % CAGR % Category 2010 2014 2015 2019 F 2010-14 2015-19 Total Processed Fish and Seafood 156.8 176.4 180.1 197.4 3.0 2.3 Canned Fish and Seafood 21.94 24.78 25.47 28.22 3.1 2.6 Tuna 17.2 19.57 20.13 22.37 3.3 2.7 Other canned fish and seafood 4.00 4.42 4.52 4.96 2.5 2.4 Mackerel 0.60 0.65 0.66 0.71 2.0 1.9 Salmon 0.14 0.15 0.16 0.17 2.2 2.0 Chilled Fish and Seafood 93.9 105.22 107.08 116.74 2.9 2.2 Raw fish 64.38 74.6 76.29 84.76 3.8 2.7 Raw seafood 28.68 29.69 29.84 30.96 0.9 0.9 Coated fish and seafood 0.84 0.93 0.95 1.02 2.5 1.8 Frozen Fish and Seafood 39.96 45.34 46.49 51.37 3.2 2.5 Raw seafood 23.17 26.46 27.16 30.18 3.4 2.7 Raw fish 8.15 9.11 9.31 10.17 2.8 2.2 Coated fish and seafood 6.82 7.74 7.94 8.76 3.2 2.5 Other fish and seafood 1.83 2.04 2.07 2.27 2.7 2.2 Source: Datamonitor, July 2015 *Note: Fish-based ready meals have been excluded from this analysis, given the fact that they represent a small market **Note: for the above table the GCC is defined as Saudi Arabia and the United Arab Emirates

Page | 8

MARKET SHARES BY COMPANY

The GCC’s processed fish and seafood market is led by Americana group, which held a 5.0% value share in 2014, followed by Sahar Enterprises L.L.C. and Kawasho Foods Corporation with 4.1% and 2.7%, respectively.

The Americana group company profile in Euromonitor, describes it as a major food and foodservice provider in the GCC and worldwide. Americana’s main businesses evolve around consumer foodservice and packaged food manufacturing. The company manages over 1,400 stores in more than 13 countries.

Top Ten Processed Fish and Seafood* Companies in the GCC** % Breakdown Based on Retail Value Sales

Companies 2010 2011 2012 2013 2014 Americana Group 4.8 4.8 4.9 4.9 5.0 Sahar Enterprises L.L.C. 3.8 3.8 3.9 4.0 4.1 Kawasho Foods Corporation 2.8 2.8 2.8 2.7 2.7 Global Food Industries 2.5 2.6 2.6 2.6 2.6 Maya Manufacturing and Trading Co. Sdn. Bhd. 2.0 2.0 2.0 2.0 2.0 Saudi Brothers' Commercial Company 1.5 1.5 1.5 1.6 1.6 Conservas Velmar 0.9 0.9 0.9 1.0 1.0 RD Tuna Canners Ltd. 0.8 0.8 0.8 0.8 0.9 Gulf Food Industries 0.8 0.8 0.8 0.8 0.8 Bolton Group 0.7 0.7 0.7 0.7 0.7 Source: Datamonitor, July 2015 *Note: Fish-based ready meals have been excluded from this analysis, given the fact that they represent a small market **Note: for the above table the GCC is defined as Saudi Arabia and the United Arab Emirates

Modern grocery retailers are highly developed in the GCC, with most consumers buying their groceries at supermarkets and hypermarkets. Hypermarkets are the dominant distribution channel overall, especially for fish and seafood products. This is not only due to hypermarkets offering wide ranges of fish and seafood products and attractive price promotions, but also due to a strong mall culture, with many consumers combining grocery shopping with trips to shopping malls. In addition, there was an increasing demand for local grocery retailers, due in part to progressively more busy lifestyles, thus causing convenience stores to gain share in 2014 (Euromonitor International, 2015).

Top Five Processed Fish and Seafood* Distribution Channels in the GCC** % Breakdown Based on Retail Value Sales

Companies 2010 2011 2012 2013 2014 Supermarkets / hypermarkets 53.1 53.4 53.6 53.8 54.1 Independent Retailers 29.4 29.2 29.0 28.8 28.5 Convenience Stores 10.5 10.6 10.7 10.8 11.0 Specialist Retailers 3.8 3.6 3.4 3.2 3.0 Service Stations 2.4 2.4 2.5 2.6 2.7 Source: Datamonitor, July 2015 *Note: Fish-based ready meals have been excluded from this analysis, given the fact that they represent a small market **Note: for the above table the GCC is defined as Saudi Arabia and the United Arab Emirates

Page | 9

FOODSERVICE

The GCC is a significant regional economic player, and influential trading region with a combined GDP of more than US$1.5 trillion. Moreover, the rate of growth has been impressive, and is on a par with emerging market powerhouses such as Brazil and China. In addition, they have a much higher per capita income, and a smaller younger and more diverse population.

According to Datamonitor, this combination of size, growth and wealth per capita makes the GCC a relatively unique market from a foodservice perspective, with a strong existing awareness of, and demand for, global foodservice brands and products along with room for more consumption and demand growth.

Similarly as in the Middle East and North Africa, large households are very much the norm in the GCC, with average household size in every GCC nation at least twice or three times that of Canada.

Occupants per household 2014 Kuwait 6.7 Bahrain 5.9 Saudi Arabia 5.6 Qatar 5.3 United Arab Emirates 5.0 US 2.6 Canada 2.6 UK 2.3 France 2.2 Germany 2.0 Source: Euromonitor, July 2015

In addition, tourism spending is a significant component of foodservice spending in both the United Arab Emirates (UAE) and Bahrain. While Saudi Arabia’s tourism inflows are enormous due to millions making the annual pilgrimage to Mecca required of devout Muslims, per capita spending is quite low, while Kuwait has almost no tourism industry to speak of.

Tourism Arrivals to the GCC Region

Tourist arrivals ('000 trips) 2012 2017 % CAGR Saudi Arabia 16,473.1 30,504.8 13.1 United Arab Emirates 10,355.2 16,049.4 9.2 Bahrain 2,829.3 3,459.9 4.1 Qatar 2,007.5 2,799.8 6.9 Oman 2,053.2 2,616.9 5.0 Kuwait 535.9 645.9 3.8 Source: Euromonitor, July 2015

Page | 10

Going forward, Euromonitor predicts that tourism will gain ground outside Saudi Arabia, with the governments of the Tourist Spending per Capita UAE and Qatar both looking to tourism as key non-oil based 2014 industry to be developed. Euromonitor also cites the vast sums invested by Qatar and the UAE to modernize and build Spain 1530.2 tourism infrastructure in order to host the 2022 FIFA World Cup and 2020 World Expo as an examplesof national priority for the upcoming years. United Arab 1385.5 Futhermore, the region is a major trading hub, with nearly all Emirates products imported by necessity, which means consumers are accustomed to foreign brands and new culinary experiences.” Bahrain 1085.1

In addition, the multi-ethnic composition of the GCC has an enormous impact on both the brands and types of food favoured by consumers. France 927.4

In regards to fish and seafood products, most of the demand in the GCC, in particular for lobster, is met through either Oman 861 local production or imports from neighboring countries such as India and Oman. Smaller quantities of high-end specialized items are imported from other countries such as the U.S. and Canada essentially for the hotel, restaurant and Qatar 338.3 institutional (HRI) sector.

For the few retailers in the UAE that offer it, Canadian live lobster has proven to be a popular product . However, most Saudi Arabia 295.8 retailers do not have tanks to hold stocks and so display the lobsters on ice. According to local suppliers, the main reason for the weak presence of live lobsters in the food retail sector Kuwait 107.6 is the lack of proper equipment to present the products. The other challenge is that a large number of consumers are not familiar with the handling and cooking methods of live lobster 0 500 1,000 1,500 2,000 and thus avoid it. US$ per capita Canadian companies interested in the GCC market could consider Canadian frozen shell-on lobster or lobster meat Source: Euromonitor, July 2015 as an alternative to exporting live product. The processed product is generally shipped in refrigerated containers, which eliminates many of the current transportation issues that exist with shipping live lobster to the GCC region. Frozen Canadian lobster, crab and prawns are an option for restaurant chains who offer seafood to their clientele.

In short, despite the challenges around logisitics and brand awareness, the UAE market for high value live seafood such as lobster and crab offers opportunities for Canada . The Gulf region is home to importers and distributors that are familiar with international products and can be good partners in developing a market that will become increasingly lucrative for high value foreign products in the coming years as the region plays host to the 2020 World Expo and the 2022 World Cup.

Page | 11

RESOURCES

Consulate General of Canada 19th Floor, Emirates Towers Sheik Zayed Road. Dubai, United Arab Emirates

Tel: (011-971)4 404-8555 Fax: (011-971)4 404-8556

Datamonitor • Processed Fish and Seafood: Retail Value/Volume Sales in the GCC • Processed Fish and Seafood: Top 10 companies • Processed Fish and Seafood: Distribution channels.

Department of Foreign Affairs, Trade and Development (DFATD) and Agriculture and Agri-Food Canada (AAFC) – Brief on Canadian lobster exports to the Gulf region

Euromonitor International • Consumer’s expenditures on fish and seafood in the GCC • Fresh Food in the UAE – April 2015 • Packaged Food in the UAE, April 2015

Food and Agriculture Organization of the United Nations • Fishery Statistic, retrieved in July 2015 from: http://www.fao.org/fishery/statistics/global-commodities- production/en • Article on Markets in the Middle East: market, trade and consumption, retrieved July 2015 from: http://www.globefish.org/markets-in-the-middle-east-market-trade-and-consumption.html

Global Trade Atlas, July 2015

Page | 12

Inside Gulf Cooperation Council (GCC): The Fish and Seafood Trade Global Analysis Report

Prepared by: Karim Zarrouki and Stephanie Clarke, Market Analysts

© Her Majesty the Queen in Right of Canada. represented by the Minister of Agriculture and Agri-Food (2015).

Photo Credits All photographs reproduced in this publication are used by permission of the rights holders. All images. Unless otherwise noted. are copyright Her Majesty the Queen in Right of Canada.

For additional copies or to request an alternate format, and for all other inquiries regarding this publication, please contact: Agriculture and Agri-Food Canada. Global Analysis 1341 Baseline Road. Tower 5, 3rd floor Ottawa. ON Canada. K1A 0C5 E-mail: [email protected]

The Government of Canada has prepared this report based on primary and secondary sources of information. Although every effort has been made to ensure that the information is accurate. Agriculture and Agri-Food Canada (AAFC) assumes no liability for any actions taken based on the information contained herein.

Reproduction or redistribution of this document in whole or in part must include acknowledgement of Agriculture and Agri-Food Canada as the owner of the copyright in the document. Through a reference citing AAFC, the title of the document and the year, where the reproduction or redistribution includes data from this document. It must also include an acknowledgement of the specific data source(s). as noted in this document.

Agriculture and Agri-Food Canada provides this document and other report services to agriculture and

Page | 13

food industry clients free of charge.

Page | 14