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Latest Food & Drink Company Results Reflect Lebanon's Gradual Recovery and the Slow Return of Consumer Confidence

Posted on: Thursday, 13 March 2008, 03:00 CDT

Research and Markets (http://www.researchandmarkets.com/reports/c85741) has announced the addition of Lebanon Food & Drink Report 2008 to their offering.

The Lebanese food and drink production industry has begun the long road to recovery, as discussed in BMI's recently published Lebanon Food & Drink Report for 2008. Following the Israeli bombings in mid-2006 which devastated the country and the industry, a number of companies have started to report that production and sales are improving. In 2007 reconstruction work began on the Liban Lait dairy factory, which had been completely destroyed by the Israeli bombing campaign. The plant had an annual capacity of some 20mn litres, and produces fresh and UHT milk, as well as a wide range of cheeses and yoghurts, with its products accounting for around 70% of annual dairy consumption in Lebanon. The company said it should take about a year for the plant to regain its full capacity, which is a far more realistic target compared to the original estimate of two months.

In other dairy news, Danish company Arla has said that sales at its Lebanese joint venture Arla Kalassi Foods have got off to a good start in 2007, following a difficult first year. In 2006 the group's performance was first held-back by the boycott of Danish goods throughout the Middle East, leading to a major drop in sales, which was then followed by the Israeli military attacks, which led to severe damages in infrastructure, and put major limitations on distribution, hampering new product launches and sales growth, according to the company. However, followed by a favourable start to 2007, Arla Kalassi is now planning to further increase its sales and launch new products, including a low-fat variety of Puck processed cheese, which is designed to meet the strong demand in Lebanon for 'light' products.

Another company that reported recovering results was Chateau Ksara Lebanon's oldest and largest winery. In late 2007 the company reported that turnover for 2007 was up 10% to US$27mn, with the company exporting 40% of its production. With the difficult domestic situation, exports of Lebanese wines are one of the main avenues of growth, with large Lebanese communities in Europe and the United States presenting major export opportunities, especially given the country's long history of viticulture.

These company results reflect Lebanon's gradual recovery and the slow return of consumer confidence, but also show that there is still a long was to go. BMI believes that Lebanon will continue to struggle into 2008, as consumer and business confidence remains low, and political uncertainty makes even our 2.0% growth forecast seem optimistic. Nonetheless, the ongoing activity in the ports, as well as some infrastructural rebuilding (under the auspices of both the government and Hizbullah), will keep GDP growth broadly in positive territory, with a return to violence and civil unrest the key risk. The economy has had another difficult year, and the post-war bounce that many had anticipated has certainly not been as much in evidence as we had hoped. Ongoing political tension has kept and consumer and investor confidence low, which means that despite some moves in the right direction, the food and drink industry's recovery still has a long way to go.

Executive Summary

Business Environment

Regional Food & Drink Business Environment Ratings

Table: Middle East Food & Drink Business Environment Ratings -- Q108

Lebanon's Food & Drink Business Environment Rating

SWOT Analysis

Mass Grocery Retail

Lebanon MGR Industry SWOT

Food and Drink

Lebanon Food & Drink Industry SWOT

Macroeconomic Outlook

Table: Lebanon -- Economic Activity

Retail

Regional Overview: Private Label Retailing in the Middle East

Industry Forecast Scenario

Table: Lebanon Mass Grocery Retail -- Value Sales by Format -- Historical Data & Forecasts

Table: Lebanon Grocery Retail Sales Breakdown (%)

Industry Developments

Market Overview

Table: Structure of Lebanon's Mass Grocery Retail Sector by Estimated Number of Outlets

Table: Lebanon Mass Grocery Retail -- Value Sales by Format (US$bn) -- Historical Data & Forecasts

Food And Drink

Food Regional Overview: The Halal Food Industry in the Middle East

Table: Muslim Populations in Select Countries

Table: Meat Import And Exports Of Selected MEA Countries, 2004 (US$ '000)

Drink Regional Overview: Coffee and Doughnut Shops in the Middle East

Table: GDP Per Capita, US$

Industry Forecast Scenario

Food

Table: Lebanon Sectoral Trade Indicators -- Historical Data & Forecasts

Drink

Industry Developments

Food

Drink

Market Overview

Agriculture

Food

Drink

Tobacco

Industry Forecast Scenario

Table: Cigarette Value/Volume Sales -- Historical Data & Forecasts

Market Overview

Competitive Landscape

Key Players

Mass Grocery Retail

Table: Key Players in Lebanon's Mass Grocery Retail Sector

Food and Drink

Table: Key Players in Lebanon's Food & Drink Sector

Regional Company Case Studies

Drink: Aujan in the Middle East

Table: Aujan Industries -- The Figures, 2006

Table: Aujan Shareholders

Table: Aujan Industries Production Facilities In Saudi A

Food: Kraft in the Middle East and Africa

Table: Kraft's Key Brands In The Middle East

Retail: Groupe Casino in the Middle East

Table: Store Network

Company Analysis

Mass Grocery Retail

Bou Khalil

Spinneys

Drink

Société Moderne Libanaise pour le Commerce (SMLC)

Almaza Beer

Food & Drink Ratings Appendix

Introduction: Revised Methodology

Ratings Overview

Ratings System

Indicators

Table: Limits of Potential Returns

Table: Risks to Realisation of Potential Returns

Weighting

Table: Weighting

BMI Forecast Modelling

How we generate our industry forecasts

Retail Industry

Sources

For more information visit http://www.researchandmarkets.com/reports/c85741

Source: Business Monitor International

Source: Business Wire

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