The Food and Beverage Market Entry Handbook: Saudi Arabia a Practical Guide to the Market in Saudi Arabia for European Agri-food Products and Products with Geographical Indications July 2017 Prepared by: EUROPEAN COMMISSION Consumers, Health, Agriculture and Food Executive Agency Promotion of Agricultural Products Unit E-mail: [email protected] Europe Direct is a service to help you find answers to your questions about the European Union. Freephone number (*): 00 800 6 7 8 9 10 11 (*) The information given is free, as are most calls (though some operators, phone boxes or hotels may charge you). This document has been prepared for the Consumers, Health, Agriculture and Food Executive Agency (Chafea) acting under the mandate from the European Commission. It reflects the views only of the authors, and the Commission / Chafea cannot be held responsible for any use which may be made of the information contained therein. More information on the European Union is available on the Internet (http://europa.eu) Luxembourg: Publications Office of the European Union, 2017 PDF/Volume_01 EB-05-17-005-EN-N ISBN 978-92-9200-771-3 DOI 10.2818/282581 © European Union, 2017 Reproduction is authorised provided the source is acknowledged. Enjoy It’s from Europe – Market Entry Handbook Table of Contents: How to Use this Handbook Table of Contents Table of Contents ............................................................................. 1 List of Acronyms .............................................................................. 5 The Exporter’s Handbook: Saudi Arabia ............................................... 6 How to Use this Handbook .............................................................. 6 The Saudi Market ............................................................................. 8 Saudi Arabia at a Glance ................................................................. 9 Saudi Arabian Food and Beverage Market ........................................ 13 4.2.1 Saudi Arabia F&B Trade Profile ................................................. 15 4.2.2 Retail Overview ...................................................................... 19 4.2.3 Logistics ............................................................................... 22 4.2.4 Distribution ........................................................................... 30 4.2.5 Doing Business ...................................................................... 32 Market Access and Entry ................................................................. 34 Market Strengths, Weaknesses, Opportunities and Threats ................ 34 Cultural Sensitivities .................................................................... 36 5.2.1 Alcohol & Intoxicants .............................................................. 36 5.2.2 Fresh & Processed Meat .......................................................... 37 5.2.3 Price Hikes during Religious Festivals like Ramadan ..................... 37 5.2.4 Rising Health-Consciousness Sets the Trends in Food and Beverage Sector 37 EU F&B Exports to Saudi Arabia ..................................................... 38 Key Markets ................................................................................ 40 Regulation, Legislation and Administrative Information ..................... 46 5.5.1 Registration of GI ................................................................... 46 5.5.2 GCC Trademark Law ............................................................... 48 5.5.3 Customs Regulations .............................................................. 49 5.5.4 SPS Requirements .................................................................. 53 5.5.5 Labelling Requirements ........................................................... 57 Saudi Arabia and International Trade in F&B .................................... 58 5.6.1 Saudi Arabia at the WTO ......................................................... 59 Saudi Arabia at the GCC 6 ............................................................. 59 5.7.1 GCC Trademark Law ............................................................... 60 5.7.2 Future of GCC 6 ..................................................................... 61 Market Snapshots ........................................................................... 62 Market Snapshot: Baked Goods ..................................................... 63 6.1.1 Consumption ......................................................................... 63 6.1.2 Offer .................................................................................... 65 1 | P age Enjoy It’s from Europe – Market Entry Handbook Table of Contents: How to Use this Handbook 6.1.3 Specific Import Requirements .................................................. 70 6.1.4 Distribution ........................................................................... 71 6.1.5 Summary .............................................................................. 71 Market Snapshot: Chocolate .......................................................... 73 6.2.1 Consumption ......................................................................... 73 6.2.2 Offer .................................................................................... 75 6.2.3 Main Competitors ................................................................... 78 6.2.4 Specific Import Requirements .................................................. 78 6.2.5 Distribution ........................................................................... 79 6.2.6 Summary .............................................................................. 80 Market Snapshot: Confectionary Products ....................................... 81 6.3.1 Consumption ......................................................................... 81 6.3.2 Offer .................................................................................... 84 6.3.3 Main Competitors ................................................................... 87 6.3.4 Specific Import Requirements .................................................. 87 6.3.5 Distribution ........................................................................... 88 6.3.6 Summary .............................................................................. 88 Market Snapshot: Dairy Products ................................................... 90 6.4.1 Consumption ......................................................................... 90 6.4.2 Offer .................................................................................... 93 6.4.3 Main Competitors ................................................................... 94 6.4.4 Specific Import Requirements .................................................. 95 6.4.5 Distribution ........................................................................... 96 6.4.6 Summary .............................................................................. 97 Market Snapshot: Drinks .............................................................. 98 6.5.1 Consumption ......................................................................... 98 6.5.2 Offer .................................................................................. 102 6.5.3 Distribution ......................................................................... 106 6.5.4 Summary ............................................................................ 107 Market Snapshot: Fresh Fruits and Vegetables ............................... 109 6.6.1 Consumption ....................................................................... 109 6.6.2 Offer .................................................................................. 114 6.6.3 Main Competitors ................................................................. 116 6.6.4 Specific Import Requirements ................................................ 118 6.6.5 Distribution ......................................................................... 119 6.6.6 Summary ............................................................................ 119 Market Snapshot: Fresh Meats ..................................................... 120 2 | P age Enjoy It’s from Europe – Market Entry Handbook Table of Contents: How to Use this Handbook 6.7.1 Consumption ....................................................................... 120 6.7.2 Offer .................................................................................. 124 6.7.3 Main Competitors ................................................................. 126 6.7.4 Specific Import Requirements ................................................ 127 6.7.5 Distribution ......................................................................... 128 6.7.6 Summary ............................................................................ 130 Market Snapshot: Honey, Gum Resins and Plant Products ................ 132 6.8.1 Consumption ....................................................................... 132 6.8.2 Offer .................................................................................. 134 6.8.3 Main Competitors ................................................................. 136 6.8.4 Product Import Requirements ................................................ 137 6.8.5 Distribution ......................................................................... 137 6.8.6 Summary ............................................................................ 138 Market Snapshot: Cotton Plants ................................................... 139 6.9.1 Consumption ....................................................................... 139 6.9.2 Offer .................................................................................. 139 6.9.3 Main Competitors ................................................................. 143 6.9.4 Specific Import Requirements ................................................ 144 6.9.5 Distribution ......................................................................... 144 6.9.6 Summary ............................................................................ 144 Market Snapshot: Olive Oil ....................................................... 145 6.10.1 Consumption .................................................................... 145 6.10.2 Offer ................................................................................ 146 6.10.3 Main Competitors .............................................................. 149 6.10.4 Distribution....................................................................... 150 6.10.5 Summary ......................................................................... 151 Market Snapshot: Processed Cereals .......................................... 152 6.11.1 Consumption .................................................................... 152 6.11.2 Offer ................................................................................ 154 6.11.3 Specific Import Requirements .............................................. 156 6.11.4 Summary ......................................................................... 157 Market Snapshot: Processed Fruits and Vegetables ...................... 158 6.12.1 Consumption .................................................................... 158 6.12.2 Offer ................................................................................ 161 6.12.3 Main Competitors .............................................................. 163 6.12.4 Specific Import Requirements .............................................. 164 6.12.5 Distribution....................................................................... 165 3 | P age Enjoy It’s from Europe – Market Entry Handbook Table of Contents: How to Use this Handbook 6.12.6 Summary ......................................................................... 166 Market Snapshot: Processed Meats ............................................ 167 6.13.1 Consumption .................................................................... 167 6.13.2 Offer ................................................................................ 170 6.13.3 Main Competitors .............................................................. 172 6.13.4 Specific Import Requirements .............................................. 173 6.13.5 Distribution....................................................................... 174 6.13.6 Summary ......................................................................... 175 Market Snapshot: Products with Geographical Indication .............. 176 6.14.1 Consumption .................................................................... 176 6.14.2 Offer ................................................................................ 179 6.14.3 Distribution....................................................................... 184 6.14.4 Summary ......................................................................... 186 Communication ............................................................................ 188 Advertising in Saudi Arabia ......................................................... 189 F&B Media in Saudi Arabia .......................................................... 190 Presenting a Product in Saudi Arabia ............................................ 191 7.3.1 Target Audience ................................................................... 193 7.3.2 Communications Campaigns in Saudi Arabia ............................ 194 7.3.3 Promoting your Product ......................................................... 195 DOs and DON’Ts ........................................................................... 197 DO .......................................................................................... 197 DON’T ...................................................................................... 197 Quick Facts ............................................................................... 198 Synopsis ..................................................................................... 201 Conclusion ................................................................................ 204 Support Services Directory ............................................................ 206 Annex I: Registered GI Products ..................................................... 211 Annex II: Professionals Contact Database ........................................ 212 Annex III: Case Study - Investing in Building a Network of Trust is the Key to Success in Saudi Arabia ..................................................................... 217 Company Profile ..................................................................... 217 Customer Base ....................................................................... 217 Market Opportunities and Marketing Strategy .............................. 217 Challenges in Saudi Arabia ....................................................... 218 Key to Success ....................................................................... 218 Do’s and Don’ts in Saudi Arabia ................................................ 219 Annex IV: Case Study - National Agricultural Development Company ... 220 4 | P age Enjoy It’s from Europe – Market Entry Handbook List of Acronyms: How to Use this Handbook Introduction ........................................................................... 220 Successful Products ................................................................. 220 Supply and Distribution Chains ................................................. 222 Marketing Strategy .................................................................. 223 Annex V: List of Tables & Figures .................................................... 227 List of Acronyms Broadcasting Service of the Kingdom of BSKSA Saudi Arabia CAGR Compound Annual Growth Rate CMA Capital Markets Authority DMA Dammam Metropolitan Area F&B Food and Beverage FDA Food and Drug Administration FIA Foreign Investment Act GAFTA Greater Arab Free Trade Area GCC Gulf Cooperation Council GI Geographical Indications GSFMO Grain Silos and Feed Mills Organisation GSO Gulf Standardisations Organisation GSP Generalised System of Preferences IPR Intellectual Property Rights KSA Kingdom of Saudi Arabia MENA Middle East and North Africa Saudi Arabia Basic Industries SABIC Corporation SAGO Saudi Grain Organisation SAMA Saudi Arabia Monetary Agency Saudi Standards, Metrology and Quality SASO Organisation SAVOLA Saudi Vegetable Oil and Ghee Company SDFA Saudi Food and Drug Authority SIDF Saudi Industrial Development Fund SPS Sanitary and Phytosanitary Trade and Investment Framework TIFA Agreement UAE United Arab Emirates US United States WTO World Trade Organisation 5 | P age Enjoy It’s from Europe – Market Entry Handbook The Exporter’s Handbook: Saudi Arabia: How to Use this Handbook The Exporter’s Handbook: Saudi Arabia This Handbook is intended to act as a reference for those agri-food producers planning for, or in the process of entering the Saudi market. This Handbook provides step-by-step guidance on the operationalisation of the market in Saudi Arabia, including relevant information such as analysis of product-specific markets, market access and market entry procedures - including as applicable at the bilateral and regional levels - Intellectual Property Rights (IPR) for products with Geographical Indications (GI), a signposting and referral system providing useful contacts to professional buyers and strategies for penetrating the Saudi market. How to Use this Handbook The applicability of each section of this Handbook will depend on your stage of market entry, company profile, product range and existing business strategies. For those wishing to learn more about the Saudi Arabian food and beverage (F&B market in general, Sections 4 and 5 provide an overview of the business climate. These sections include political, geographic, economic and cultural information relevant to successful market entry and performance. The information contained within these sections is of a general nature so may not be relevant for those in the more advanced stages of market entry. If you are interested in the market, in Section 6, you may find out more information relevant to your product through the 14 Market Snapshots for selected products. These sections illustrate the market overview, entry procedures, sanitary and phytosanitary requirements and more, specific to each of the following product categories: 1. Baked Goods 2. Chocolate 3. Confectionary 4. Dairy Products 5. Drinks 6. Fresh Fruits and Vegetables 7. Fresh Meats 8. Honey, Gum Resins and Plant Products 9. Live Plants and Cotton 10.Olive Oil 11.Processed Cereals 12.Processed Fruits and Vegetables 13.Processed Meats 14.Products with Geographical Indication This information will provide more industry-specific intelligence to consider as part of any market entry or market expansion strategies. The information contained in this Handbook is a first resource to consult in deciding how to export your product to the Saudi market and does not constitute legal guidance. Applicable legislation, regulations and market information are frequently updated or changed in Saudi Arabia and should be reviewed with a knowledgeable export support service or import counsellor prior to market entry. 6 | P age Enjoy It’s from Europe – Market Entry Handbook The Exporter’s Handbook: Saudi Arabia: How to Use this Handbook If you have already decided to market your product in Saudi Arabia, but need some assistance getting there, then the detailed information in Sections 7 to 10 can point you in the right way. In Section 7 you will find the necessary information to build your communication strategy, including statistics on social media usage, main media channels and the local rules on advertisement Section 8 provides practical tips and a concise list of recommendations on what to do and what not to do. The Synopsis in Section 9 presents an overview of the F&B market in Saudi Arabia through SWOT analysis and 4P Analysis Finally, Section 10 provides a Support Services Directory which includes a well-informed contact network of service providers, business facilitation support organisations and business contacts, which can be vital in entering and building a brand in the Saudi market. 7 | P age