Food Market Egypt Retail & Industrial Pillars consultancy www.PILLARS-EG.COM [email protected] = Table of contents • Pastry – Bakery Alain Le Notre – Bakery • Egyptian Market Food Service Sector overview Fast Food – Burger • Bakery The Bakery – by Marriott • Food Market Egypt Local Market: (Confectionery/Salty Snacks & • TGI Fridays Grocery) : • Bakery Cinnabon Bakery Café • Hardee’s • Burger King • The Burger Kitchen Pizza & Italian Restaurants • Pastry – Bakery • • Lucille's Burgers • Pumpkin • Pizza - Italian Restaurants Classification/ Products Offered Rigoletto • Pizza – Italian Outlets Egypt Nation-Wide (1/3) : • Fast Food – Restaurant Bon Appetit • Review to Pizza Local Market • Nuntee’s Fast Food – Restaurant Mo’men Sale Sucre Burger Burger Joint • Pizza- Italian • • Brioche Doree Italian - International Casper & Gambini • Pizza Hut • Zanobia • Domino’s Pizza Burger : Local Outlets : Tseppas • PAPA John’s • Burger /Fast Food Outlet Listing (1/2) Adel Rahim Koueider • Little Caesars • Bohsali Restaurant Management Companies : • Pizza King • • Americana Group Peppes Pizza • • Devine Works • Bakery Chains • Cortigiano • Amer Group Holding / Tropicana for Bakery Outlets • Roma Pizza 2 Go • Projects • Pizza Plus • Deyafa – (Abo El-Sid/Tabasco / Absolute/ Burger- Fast Food Taboula/Sangria) • Other Pizza Outlets Online Ordering / Others • Café Bakery Outlets • Burger : Int’l Chains • • Key Chains comments • Burger McDonald’s • Bakery Market Overview • Bakery – Mini Market – Coffee Shop On Managed by Amer Group • Selective outlets Review & Comments • Burger Chili’s – the Run • Fast Food - Burger – Pizza Cook Door • The Coffee Bean & Tea Leaf Spectra Restaurant & Café Bakery • Hotels Bakery Outlets • • Cilantro Cafe’ • Makani Bakery Pastry Shop Cinnzeo • Italian Carino’s Italian • – • Terianon • Le Carnaval • Beano’s • Monginis • Starbucks Coffee • La Poire • Grand Café Costa Coffee • Samadi – “Americana” • • Segafredo 2 Table of Contents 1. F&B Outlets/Café/Hyper Markets & Hospitality Bakery Industrial : Biscuits/ Cakes : Bakery / Artisanal Food Market Review Pizza Bakery - Industrial Dairy Company Profiles Burger Dairy Regional Presence Restaurant Management Co. Food Processors : Dairy Café – Chain Food Suppliers / Distributors Hospitality (Hotel Chains) Super Markets – Hyper Markets 3 Egyptian Market Food Service Sector overview (1/3) Food Market Size : • • Already the largest in both Africa and the Middle East, Egypt's US$7 billion foodservice industry is expected to surge past US$10 billion over the next five years, buoyed by an expanding economy, growing tourism, and an exploding population of • young people. That said, foodservice operators in Egypt must still contend with a number of serious issues, including deeply entrenched corruption, often-stifling bureaucracy, and stubborn poverty, with over a third of Egyptians living on less than US$2 a day. • Since 1991 the Egyptian government has pursued a fairly comprehensive economic reform program, privatising a number of state firms, slashing taxes, and gradually liberalising trade and investment regulations. Inflation has been brought under control, while average disposable incomes have moved steadily upwards--between 2000 and 2007, real average per capita annual disposable income expanded by 15.5%, to reach £E7,162 (US$1,262). • While an expanding economy has benefited all Egyptians to some degree, it has proven especially beneficial to the wealthiest 10%, whose increased spending power has fuelled a retail and foodservice boom in affluent areas of major cities such as Cairo or Alexandria. Hotels : • Tourism helps fuel chained growth, though independents still dominate. Of special importance to foodservice operators is the tourist sector, which continues to recover following a number of major terrorist attacks since 1997. • According to Euromonitor, over 10 million foreign visitors came to Egypt in 2007, spending £E106 billion (US$20 billion) making tourism Egypt's largest source of foreign currency. • International hotel operators continue to invest heavily, with a number of major new developments planned for both downtown areas as well as resort areas such as and Hurghada. Despite rising demand from Egyptians, foreign tourists remain a major market for multinational chains, with many outlets still found near hotel and resort locations. 4 http://www.marketresearchworld.net/index.php?option=com_content&task=view&id=2101&Itemid=77 Egyptian Market Food Service Sector overview (2/3) Food Service : • While inflation remains an issue, the Egyptian foodservice industry has seen significant real growth in recent years, averaging 3% constant value sales growth since 2002. Chained operations have led the way, more than doubling in current terms to approach £E5 billion (US$935 million) in 2007, buoyed by strong demand from incoming tourists and urban consumers, particularly young people. That said, independents still account for nearly 90% of value sales and a remarkable 98% of outlets, reflecting the continuing importance of smaller local operations, particularly for the poorer consumers that still make up the majority of Egypt's population. • KFC, McDonalds lead in a highly fragmented market, with local chains growing fast More than 70% of the country's nearly 50,000 foodservice outlets are cafés or fast-food outlets, generally offering quick, affordable meals for consumers with limited disposable incomes. • While full-service restaurants account for a far smaller percentage of total outlets, their share of value sales is around 40%. Boasting significantly higher average sales per outlet than fast food outlets or cafes, full-service restaurants in Egypt are very much an urban phenomenon, catering mostly to tourists and upper-class Egyptians. • While YUM! Brands and McDonald's are the biggest players in the Egyptian market, they collectively account for less than 2% of total value sales, competing with a large number of local and regional chains, plus countless small independent operations. In addition, a number of other international brands such as TGI Friday's, Chili's, and Hardee's are also present, catering primarily to tourists, expatriates, and wealthier Egyptians. • Other popular local chains include Cook Door and Mo'men, two operators who have carved out a niche with standard fast food such as burgers, sandwiches, French fries, and drinks, combined with local touches such as grilled shrimp, shawarma, and kebabs. Café : • Among local operators, one of the most successful in recent years has been Cilantro, a coffee shop chain adhering very closely to the template established globally by Starbucks and Costa Coffee, among others. The chain offers a range of coffee drinks, desserts, and light meals in clean, well-lit outlets that offer a quiet respite from chaotic bustle of Egypt's urban areas. With 28 outlets by the end of 2007, making it the fourth-largest brand in Egypt in terms of total stores, Cilantro has successfully positioned itself as an alternative to the traditional smoky, male-dominated Egyptian café, proving popular as a place for well-heeled young Egyptians of either gender to socialise and relax. 5 Egyptian Market Food Service Sector overview (3/3) Demographics & Impact : • Impact of favourable demographic trends limited by growing inequality As in many other developing markets, Egypt is home to a large, growing population of young people, one poised to become a key market for both international and domestic operators alike. • Fully one-third of the population is 14 years of age or younger, while more than 60% of Egyptians are under the age of 30. While generally lagging their older countrymen in terms of income, young consumers are far more likely to seek out new, foreign brands, while operators who can successfully reach the youngest consumers will likely find themselves with lifelong customers. • The aforementioned Cilantro is a good example of a chain that has successfully reached out to both students and young people, with its combination of internet access and comfortable surroundings helping to create a sought-after “third place” between home and school or work. • While the growing Egyptian economy offers real opportunities for global chains, the highly unequal distribution of wealth there cannot be overstated—despite steady growth in recent years, prosperity remains restricted to a relatively narrow entrepreneurial class. In 2007, it was estimated that only 8 million out of 70 million Egyptians had a disposable income above subsistence levels. In the near to mid-term, spending on foodservice will continue to be driven by a comparatively small portion of the population in the largest urban areas, along with a steady influx of tourists to the Sinai and Red Sea coast. 2007 2008 2009 2010 2011 Real GDP Growth (% growth) 7.1 7.2 4.7 5.1 1.0 Inflation (% growth) 9.4 18.3 11.8 11.2 11.5 Population Aged 65+: January 1st ('000) 3,275.1 3,371.6 3,474.8 3,588.4 3,720.1 Population Density (persons per sq km) 74.6 76.1 77.6 79.2 80.7 GDP Measured at Purchasing Power Parity (international $ million) 405,443.7 444,025.8 467,416.7 497,772.3 508,349.9 Consumer Expenditure (US$ million) 99,653.6 124,388.6 149,365.5 174,816.8 182,279.8 Annual Gross Income (US$ million) 112,935.6 137,292.5 163,763.3 190,902.4 198,690.1 Annual Disposable Income (US$ million) 105,539.1 132,591.6 158,372.4 184,857.3 192,398.4 6 Food Market Egypt Local Market: (Confectionery/Salty Snacks & Grocery) : CHEWIN Salty Snacks & Confectionery (Egypt 2009) G 2% TOTAL Focus Categories Volume