Recently Released Market Study: Kuwait Food & Drink Report Q4 2012

New Food research report from Business Monitor International is now available from Fast Market Research

by Bill Thompson

(WireNews+Co) - Boston, MA - 25 October 2012

Our outlook on Kuwait's consumer sector and food and drink industry remains optimistic, in line with our outlook on the country's economy.

Kuwait's economic outlook remains broadly positive, and we expect the economy to continue growing relatively robustly over the coming years. Barring a sustained downturn in global oil prices, fiscal policy will continue to support growth by bolstering household incomes, as well as government consumption, while loose monetary policy will lead to a pickup in commercial bank lending.

At the same time, our Oil & Gas team is not expecting to see any significant cutbacks in oil production in the near term. That said, political gridlock is likely to weigh on capital spending for the foreseeable future, leaving economic growth below potential and bringing longer-term questions over the sustainability of the country's economic model closer into view.

View Full Report Details and Table of Contents (http://www.fastmr.com/prod/456350_kuwait_food_drink_report_q4_2012.aspx) (http://www.fastmr.com/prod/456350_kuwait_food_drink_report_q4_2012.aspx)

We have retained our forecast for real GDP growth of 4.5% and 3.7% in 2012 and 2013 respectively. Strong household consumption growth is the primary factor behind the country's bright near-term prospects, and we forecast growth of 7.0% and 4.5% in 2012 and 2013 respectively (compared with an estimated 8.0% in 2011). This surge in spending is almost wholly government-driven, with household incomes having been boosted by a series of increased social benefits and public sector wage hikes, which are particularly important given that government employees constitute the vast majority of the native workforce. Yet, despite increased fiscal spending, inflation has been kept under control by an extensive system of state subsidies on energy, food and education.

Headline Industry Data (local currency)

- 2012 food consumption growth = 4.4%; forecast to 2016 = 23.0%
- 2012 per capita food consumption growth = 0.43%; forecast to 2016 = 8.0%
- 2012 bottled water value sales growth = 9.8%; forecast to 2016 = 70.0%
- 2012 supermarket sales growth = 6.3%; forecast to 2016 = 36.4%

Key Industry Trends

Cafe Culture Attracts Investment: In July 2010 it was reported that the Brooklyn, NY-based cafe Tea Lounge has signed a franchise deal with Kuwaiti businessman named Mohammed al Arbash who plans to open the first international branch in a Kuwait City shopping mall in November 2012. Arbash said that he was drawn to Tea Lounge for its unique concept and wide variety of drinks, and that he plans on eventually expanding the concept throughout the region.

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