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Defining the modern Moroccan food and beverage industry

Source:Ringier Food Release Date:2015-02-05 1510
Food & Beverage
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Food processing plays a crucial role in Morocco’s economic growth, writes GILL HYSLOP

Morocco is the largest producer of sardines, bonito and tuna in the region

Morocco is the largest producer of sardines, bonito and tuna in the region

THE Kingdom of Morocco is home to just over 33 million people. With an abundance of arable land and a generally temperate Mediterranean climate, the country's agricultural potential is matched by few others in the region. Although its manufacturing capacities are unable to keep up with expanding local demand – requiring an increase in imported food products – in a normal year (one not effected by drought), the country produces enough meat, fruit and vegetables and most its dairy requirements needed for domestic consumption.

Like many others, Morocco's exports were drastically affected by the global recession, but the country is characterised by low inflation and steady development. Its fishing grounds are exceptionally rich in sardines, bonito and tuna, and Morocco is considered the largest fish producer in the African and Arab world. In fact, it was the first exporter in the world of sardines and pilchards. In 2013, fishing production capacity was estimated at nearly 1.5 million tons, accounting for around 40% of the country's total food and beverage exports, principally to the EU, US and Japan. Another of its fastest growing exports is Argan oil, a vital part of Moroccan food for centuries, and particularly favoured when blended with roasted almonds and honey to make Amlou paste into which Moroccans dip bread. The country also exports citrus fruits and vegetables to Europe, and the production of commercial crops, like sugarcane, sugar beets and sunflowers, is expanding. Newer crops, such as tea and soybeans, are also being successfully cultivated.

Manufacturing accounts for about one-sixth of GDP and is steadily growing in importance in the economy, especially processing raw materials for export (canning fish, fresh vegetables, and fruit) as well as for domestic needs (flour milling and sugar refining).

Changing consumption patterns
Whilst consumers are still feeling the pinch of the global credit crunch – and have recently had to endure the added blow of value-added tax (VAT) increases on certain food items and the loss of fuel subsidies earlier in 2014 – the Moroccan economy has performed moderately well, particularly when viewed in the context of the performance of France and Spain, its two main trading partners. According to head of government, Abdelilah Benkirane, the Moroccan economy was strengthened particularly by a 24% increase (over $20 billion) in foreign direct investment received in 2013.

Morocco's population growth is low (around 1%), but the urbanisation rate has risen every year at 1.8% and, today, more than half of the country's population live in cities, reports Euromonitor. Whilst the large informal segment of the market (accounting for almost 80%) is certainly not expected to disappear anytime soon, this demographic adjustment has seen a change in consumption patterns. The grocery retail industry is growing particularly quickly, with several major international supermarket and hypermarket brands expanding their operations in Morocco. This sector is also being pushed by the country's rising middle class, the expansion of consumers pursuing Western lifestyles and the growing acceptance of packaged and processed products.

According to the Ministry of Commerce and Industry, at the end of March 2014, the country had 58 hypermarkets and 154 supermarkets. The government is also pushing to transform this sector under the Rawaj Vision 2020 programme, which aims to triple the number of these retail outlets, as well as fund local community projects like wholesale markets, fish markets and slaughterhouses. "Due to its geographic location, Morocco has always served as an economic, commercial and tourist platform for Europe and it will increasingly do so with its growing number of economic agreements with the EU. Morocco will also become an important platform for those in sub-Saharan Africa looking abroad," according to Malik El Harim, general manager of one of the country's largest retail malls.

Spotlight on health
Although Business Monitor International (BMI) forecasts per capita food consumption to expand by only 1.3% in 2014, average disposable household income has risen in recent years, and this has been reflected by rising consumer spending with compound annual growth rate (CAGR) to 2018 expected to grow to more than 1.7%. Whilst there are many price-sensitive buyers about, the urban consumer is more sophisticated, many of whom are becoming health conscious and now taking note of nutritional information on packaged food. As such, supermarket shelves are seeing more of the "free from" (gluten, trans fats) and "no added" (sugars, preservatives) products, such as Pralinutta sugarfree chocolate spread by Casablanca-based Madico PM Casablanca, Yawmy 00% by Centrale Laitière and Duetto vegetable-based whipping cream, free from cholesterol and trans fats by Extraport Company SARL.

The improved consumer purchasing power has also helped the dairy market grow by 4% overall, especially thanks to the strong performance of the white milk and spoonable yogurt categories, reports Canadean. This sector also received a major injection from French company Danone, which invested a further $348 million in Central Laitière, increasing its stake in Morocco's largest dairy processor by more than 90%. The move, in part to reduce its reliance on the European region, where dairy is experiencing slow growth, is aligned to the world's largest yogurt maker's massive investment in Africa over the past two years and promises to provide a strengthened distribution network, expanding territories into rural areas where unpackaged milk is still primarily consumed.

The beverage market
Whilst Morocco's unsaturated and fragmented beverage industry provides entry opportunities for larger global players, there has been a definite growth in bottled water, fuelled by concerns of the declining quality of tap water. Aligned to the health trend, BMI also reports a steady rising interest in energy and functional drinks amongst the younger and more cash-rich urban consumer; again stimulated by the country's leading manufacturers, who are increasing their spend on new product developments and promotional activities. According to Euromonitor International's Sports and Energy Drinks in Morocco report, foods & goods achieved leading position in 2013 with its highly recognised
Red Bull brand, followed by Cobomi with its Burn brand. In the soft drinks arena, Coca-Cola Morocco maintained its lead in 2013, supported by the strong performance of its brands Coca-Cola, Fanta and Sprite, as well as the launch of new variants of Schweppes in citrus flavours.

Mix of cultural cuisines
The only monarchy in North Africa (under King Mohammed VI), Morocco contains a blend of Arab, African, indigenous Berber and European cultures. Although the Moroccan diet is gradually diversifying – with processed and ready-to-eat products becoming more common in urban areas – it is essentially based on cereals, fruit and vegetables.

Various ethnic influences are strongly predominant in its cuisines, for example, seksou and couscous (made from wheat and semolina), tajines (stews cooked in traditional pots bearing the same name) and thick soups such as harira (a blend of chickpeas, lentils and vegetables) are evidence of Berber origins. The Nomads introduced dates, milk and cheese products; the Andalusian influence from Spain can be tasted in lemons, olives and olive oil; and the Arabs brought in spices like saffron, coriander, cumin and paprika.

With a plentiful supply of meat, Moroccans enjoy brochettes (grilled kebabs of mutton, liver and fat), kefta (spicy meatballs of mutton and offal) and mechoui (lamb baked in a special oven). Pigeon breast (in a pie called pastille) and camel meat are also favoured.

In 2013, the poultry sector received a boost from IFC, which injected $24 million into Zalagh Holding, a leading grain trading and poultry group, to support the manufacturing and agribusiness sectors. The project will provide essential assistance towards the growth of the poultry industry, help create jobs and encourage economic development in rural Morocco, especially for women, and promote the use of world-recognised environmental and health standards. "This agreement supports our strategy to become a major player in a rapidly expanding sector," according to Ali Berbich, chairman of Zalagh Holding.

"IFC brings with it its agribusiness expertise and its extensive experience in optimizing corporate governance and institutionalizing family businesses." The importance of exports In a report published by French journal L'Usine Novelle, Zahra Maafiri, the director general of Morocco Export, explains that the country's dependence on importing products is decreasing. "Morocco can be self-sufficient, except in case of drought. Our imports vary according to the season, production and scarcity of products," Ms Maafiri said. "While it is still very traditional in some ways, our food industry is modernizing and more than 80% of production goes back to the local market."

However, Ms Maafiri also noted that many local companies have to actually import ingredients to process food products ready for export. Export, without a doubt, is a critical component for the country, evident in the  agency's presence at such renowned international food and beverage trade shows, like SIALParis and WorldFood Moscow. "Even if trade is concentrated with certain countries especially in Europe, we are turning to new markets," she said.

The country produces a number of products that can claim "country of origin" status – like Doukkala grapes, Beni Mellal Sardi sheep, Safi capers, Safi and Taliouine saffron, amongst others – firmly cementing the "Made in Morocco" concept on the international stage.

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