Retail Foods 2012

An Expert's View about Retail Sales in Morocco

Posted on: 27 Dec 2012

In the last few years, Morocco’s food distribution system has seen significant changes with the expansion of a number of retail food outlets and the opening of new supermarket stores.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 12/12/2012 GAIN Report Number: MO 1213 Morocco Retail Foods 2012 Approved By: Sarah Hanson, U.S. Embassy, Rabat Prepared By: Idriss El Honsali, U.S. Embassy, Rabat Report Highlights: In the last few years, Morocco’s food distribution system has seen significant changes with the expansion of a number of retail food outlets and the opening of new supermarket stores. In 2012, Carrefour, introduced its Brazilian cash and carry supermarket subsidiary Atacadao to Morocco. In 2013, the Saudi investor Ben Dawood plans to enter Morocco’s market by acquiring 30 percent of Aswak Essalam’s capital. Deep-discount food outlets have been gaining ground with the continuing growth of the Turkish deep-discounter BIM and the opening of the first store of the British group “Costcutter” in Marrakech in late 2011. Local importers, however, continue to play the main role in introducing, distributing and promoting imported food products in Morocco. SECTION I. MARKET SUMMARY Morocco’s food distribution system continues to develop, as the Moroccan economy becomes increasingly open. The arrival of western style food distribution outlets has changed the purchasing habits of a wide base of urban consumers throughout the country. However, due to their proximity and convenience, traditional small grocery stores still control about 80 percent of Moroccan retail food sector and will continue to play a major role in most parts of large cities, and particularly in rural areas and small towns where more than 50 percent of the population lives. The rapid growth of large retail food outlets in Morocco has caused the owners of these small food retailers to voice their concern about the lack of Moroccan regulations to manage the expansion and zoning issues of the large supermarkets. The concentration of high-income population in Casablanca, Rabat, and Marrakech was behind the early advent of large supermarkets in these cities. The axis Casablanca-Rabat counts for about 50 percent of the total number of the modern supermarkets. Large supermarkets have opened in virtually all major Moroccan cities (including Agadir, Tangiers, Fes, Meknes, Tetouan, and Mohamedia) and more are being opened in even middle size cities (such as Beni Mellal, Khouribga and Oujda) and in lower income areas of major cities thus providing alternatives to traditional buying habits of relatively low income groups. With an estimated population of over 6 million people, Casablanca, the economic capital of Morocco, is the largest city and the largest concentration of high-income consumers. Rabat, the capital city of Morocco, has about 2.3 million people with a large number of government employees, foreign missions, and international organizations that can be targeted with modern distribution chains. Marrakech is, by far, the leading destination for tourists. It has been growing extraordinarily fast because many high- income Moroccans and Europeans consider it as the choice destination for holidays and, more recently, for retirement. Moroccan modern distribution chains were heavily targeted by European multinationals, mostly French. They brought knowledge in supermarket management that Moroccan investors lacked. Most of the existing chains have, or had, at least some European participation. Some are increasingly consolidating purchases (food and non-food) in centralized purchasing departments in Europe while others are exporting their products to Morocco under their private label which prevents them from benefiting from the preferences secured under the United States-Morocco Free Trade Agreement that requires the products to be of U.S. origin. Food importers based in Morocco, however, will continue to play the major role in distributing and promoting imported products in Morocco in the medium term. They have their own sales agents and distribution fleet and are in direct contact with large supermarkets, wholesalers, and in many cases with large grocery stores as well. Some importers are involved in imports of a wide range of products with no particular loyalty to a specific product, brand or origin. Others are working exclusively to develop markets for specific labels or even for their own private label. As these importers tend to promote their products more heavily, they work more regularly with the supermarket chains and may require more involvement from the exporter in terms of pushing the product in the market. Major Categories of Supermarkets As far as imported food products are concerned, the Moroccan food distribution sector can be divided into three major categories: Large modern retail and wholesale supermarket chains. Small supermarkets, convenience supermarkets, large self-service grocery stores and deep- discounters. Mom & Pop stores. Imported high value food products typically do not reach the open-air markets that exist mostly in rural areas where the lower income segment of the population lives Trends in Distribution Channels Marketing experts and food distributors estimate that the modern food distribution channels accounts for nearly 20 percent of total retail food sales in Morocco . According to a study by the Nielsen marketing company, the large-scale distribution outlets control about 13 percent of the food retail sales in Morocco. Although small “mom & pop” shops will continue to play a major role in the food distribution in the medium term, the number of supermarkets is likely to continue to grow in the cities because of: A growing base of western-minded consumers, especially in urban areas. The aggressive promotions, appealing prices and discounts on a wide range of products enticing lower-income consumers A growing middle-class where both parents are working and less time is available for shopping for food so that food purchases tend to be more grouped. The increasing acceptance by the Moroccan consumer of processed and packaged products. Many products traditionally sold in bulk are now readily available in various packages. The increasing perception among the Moroccan consumers that food sold in the modern supermarkets chains are safer and that imported products offer a wider range of products generally of higher quality. Morocco’s food distribution network witnessed significant changes with the expansion of a number of retail food outlets and opening of new ones. These included the partnership franchise arrangement between the French multinational Carrefour with the Moroccan supermarket chain Label Vie to create the new chain “Carrefour Markets” in 2011. This was in addition to two hypermarkets and eight supermarket stores (previously belonging to the German Cash and Carry Metro) that Carrefour acquired in 2010. This acquisition made the cash and carry concept exclusive to the Label Vie/Carrefour group. In 2012, Carrefour, decided to introduce its Brazilian cash and carry supermarket subsidiary Atacadao to Morocco. In 2012, four Metro’s supermarkets were converted to Atacadao and the remaining four would be converted in 2013. Carrefour means continuing expanding in this segment by opening five additional Atacadoa supermarkets in 2013. Through its partnership with Carrefour, Label Vie will have the exclusive right to distribute the Carrefour brand-name products throughout the Moroccan market for 15 years. In 2012, the deep-discount food outlets continued gaining ground in Morocco, with the number of the Turkish deep-discounter BIM stores reaching 109 outlets, which represent a 45 percent increase compared to the previous year. BIM projects to extend its coverage area to the southern Morocco by opening its second distribution platform by 2013, and raising the number of outlets to 400 by 2015. The British discounter Costcutter made its entry to Morocco in late 2011. Costcutter intends to open three stores per year to reach 15 units by 2015. The Carrefour /Label Vie group also intends to get into the deep-discount market segment with “Atacadoa stores. These developments should help strengthen the presence of foreign food retailers in Morocco, especially after the withdrawal of Auchan and Géant hypermarkets and Franprix supermarkets from the country several years ago. Trends in Services Offered by Retailers Large supermarkets in Morocco tend to be located in small malls that include a large number of European and U.S. franchises for fast food, textiles, shoes, quick car repairs, banks, and car services. The number of adjacent shops varies from 10 to 25 and is meant primarily to attract a large number of visitors. Large supermarkets that started a couple of years ago to allocate some space for ready-to-eat food, which is becoming a familiar trend in Moroccan supermarkets and reflects the increasing habit of eating outside for a certain segment of the Moroccan consumers. In many cities, the lack of adequate entertainment and amusement sites draws many Moroccan families to visit supermarkets to roam around where they often end-up buying or at least are exposed to new products. In an effort to attract the lower income segment of the population, large supermarket chains developed their own generic brand that supposedly is the most economic to the consumer. The generic brands are being used for food and non-food products and some imported products are also being offered under the label “Most Economic”. In spite of the remarkable increase in use of Internet by the Moroccan communities, Internet sales of food products are almost non-existent in Morocco. Currently, there are virtually no offers made on a regular basis by food companies and payment procedures via Internet are not yet developed. This trend could change in the coming future with 10 million internet users in Morocco, with almost 3 million subscribers with internet providers and the rest have access to internet through Cyber Cafés. In 2012 Morocco’s social media users (facebook) were estimated to about 5 million, which represent 15% of the population, and an opportunity for targeted marketing via internet. Table 1: Number and Type of Retail Outlets in Morocco Type of Store Estimated Identified Supermarket Locations Number* Large Supermarkets (Including 54 Casablanca-9, Rabat 5, Independent) Sale-2, Marrakech 6, Agadir-4, Fes-3, Tanger-5, 12-32 registers, over 500 parking Meknes 1, Mohamedia 2, Kenitra-2, Tetouan-1, spots, Over 40,000 ft2 Temara 1, Safi 1, Oujda-3, Saidia-1, Essaouira 1, Nador 1, Khouribga 1, Beni Mellal 1, Kelaat Es-Sraghna-1. Al Hoceima-1, Fkih Ben Saleh-1,Taza-1. Small Supermarket & Convenience Stores: 1. Small Supermarket & Convenience Stores (> 3 70 Casablanca-18, Rabat-7, Marrakech 5 Agadir-4, registers, >12,000 ft2 ) etc. 2. Small Self-Service Grocery Sto 200 res (2 registers, > 1000 ft2) Casablanca-70, Marrakech-15, Rabat-10, Agadir-7, Meknes-6, etc. Mom & Pop Stores 550 Estimated 15,000 in Casablanca 1. 1000 ft2 5,000 Marrakech, Casablanca, Agadir, and Rabat. 2. 226 – 1000 ft2 3 285,000 . Less than 226 ft2 4. Small convenience Gas-Marts 33 Source: Importers, Ministry of Commerce and Industry, Agricultural Affaires Office, Rabat The total number of small supermarkets and small stores has to be taken with care as reliable statistics are not available. Table 2: Advantages and Challenges of the Moroccan Market Advantages Challenges 33 million Moroccans, 10-15 percent of which can afford 45 percent in rural areas. Limited purchasing to buy imported products. power in small cities and rural areas Morocco and the U.S. signed a free trade agreement that Currently, high duties on imported products. provides preferential access to many U.S. food products, especially on the medium and long term. Western-minded youth. Developing middle class. More Promotional activities very difficult in women working outside the home. traditional outlets Most importers are in Casablanca Relatively small volume involved even in large supermarkets There are very progressive and marketing oriented Modern independent supermarkets require an importers entry fee for each new product. Fast growth of modern distribution channels. Proximity of Europe to Morocco: More supermarkets are expected to open in the near future. -Imports of small quantities are economically feasible. - EU is a traditional supplier. - EU suppliers are more aggressive. Growing perception that supermarkets offer safer and Multinational chains procure some food cheaper products. Increased acceptance of packaged products through their home office and in products. many cases under a private label. SECTION II: ROAD MAP FOR MARKET ENTRY A1. Large Retail and Wholesale Supermarkets Leading supermarket retailers in Morocco, Marjane, Carrefour and Aswak Essalam, continued to expand in 2012. In 2012, unofficial market share estimates of these supermarket based on covered area, were at 52, 33, and 10 percent respectively. In 2011, the market shares of these supermarket chains were estimated at 65, 28 and 8 percent, respectively. In 2012, a higher number of new stores compared to the competition drive the increase of Carrefour market share. This group has stores of a minimum of 40,000 ft2 (up to 75,000 ft2), having between 12 and 34 registers, and over 250 employees. The supermarket space usually encompasses several private shops including pharmacists, fast-food chains, amusement centers, and in most cases gas stations. These stores have large parking lots that can fit up to 1,000 cars. Typically, these supermarkets are not in walking distance, which is likely to restrain the consumer base to medium-high class consumers. These supermarkets offer both food and non-food items. The number of different food items is often over 12,000 and is believed to generally account for 40-50 percent of the total sales. Entry Strategy The best way to introduce new products to these supermarkets is to go through local importers because: Many have long experience and direct relations with supermarkets. Thus, they are in much better position to negotiate space and promotional events. They have their own distribution fleet and are able to deliver in relatively small volumes. They carry out promotional activities regularly in these stores. They supply smaller supermarkets as well. Supermarkets might only work with well-established importers or in some case do import directly European label. Modern Distribution Channels (for Imported Food Products) Large Retail Supermarkets Exporters Local Importers Marjane 4 logistic Aswak Salam logistic Label vie group platform platform : in process logistic platform Functional since 2011 Scheme 1: Modern distribution channel for Large Retailers Carrefour : Marjane Supermarkets Aswak Essalam (Hypermarchés/ Supermarkets Source: Agr Atacadao-Cash & Carry-)icultural Attaché Office, Rabat Local importers will still supply a large share of imported food products to the large supermarket chains in Morocco. Purchases (from local producers and from importers) by these large supermarkets chains are typically handled by their headquarters in Casablanca. Since Marjane Chain and ACIMA convenience stores belong to the same company Marjane Holding which is owned by the-SNI- and carry many products in common, food procurement (except produce and meat) is handled by the central office in Casablanca. Supermarkets in this category are aggressive in promoting their products. They publish monthly brochures and occasional flyers where the importers promote their products. Also, these supermarkets, especially Marjane, advertise regularly on the radio for available sales and discounts to attract customers. The Marjane chain has been very aggressive in promotion over the past few years, as they have been organizing heavy radio advertising campaigns that claim cheaper prices, quality products and services after sale for the nonfood products. They have also been promoting the winner “FAIZ” card that provides interest-free delayed payments to consumers. In 2010, important developments occurred in the Moroccan supermarket landscape that included the entry of the French multinational supermarket Carrefour into a partnership with the Moroccan supermarket chain Label’ Vie Company. In addition, Label’ Vie acquired the Moroccan subsidiary of the German “Metro Cash and Carry” chain, under a new company HLV that was jointly established between Label’ Vie and Carrefour. In 2012, the Label’ Vie –Carrefour venture continued shaping the Moroccan retail sector by introducing the Atacadao chain. The eighth Metro cash and carry stores will be converted into Atacadao brand name. These changes should help strengthen the presence of foreign food retail companies in Morocco, especially after the withdrawal of Auchan and Géant hypermarkets andFranprix supermarkets from the Moroccan market four years ago. Company Profiles Table 3: Morocco’s Large Retailers in 2012 Re Estim. Locations and tailer Purchasing Name Ownership Turnove Number r of Number of outlets ($Mil.) store Agent type s Marjane 100 % $1,000 29 Casablanca-5, Buys from Moroccan Rabat-2, Sale-1, limited number since August Marrakech-2, of local 2007 Meknes-1, Agadir- importers / (Marjane 1, Tanger-2, Fes- distributors. Holding) 2, Mohamedia-1, (Same buying Safi-1, Kenitra-1 platform as for Tetouan-1, Oujda- small 1. Saidia-1, Nador- convenience 1, Khouribga- stores chain, 1,Beni mellal-1, ACIMA). Kelaat Es- Sraghna-1, Al Hoceima-1, Fkih Ben Saleh-1,Taza- 1. Atacadao Managed by $300-350 8: Casablanca-2, Buys from local HLV SAS of of which 4 Rabat-1, importers which 95% conversion Fes-1, and/or imports (formerly METRO Moroccan to Agadir-1 directly under who (Label Vie Atacadao Marrakech-1, own private lesale Ca SA) and 5% by mars Oujda-1, Tanger 1 labels. sh and Ca belongs to 2013 rry) Carrefour Carrefour Managed by $60-90 2 Marrakech-1, Buys from local hypermarchés HLV SAS of Sale 1. importers which 95% and/or imports Moroccan directly under (Label Vie own private SA) and 5% labels. belongs to Carrefour Aswak 100% $150-200 15 Rabat-2, Buys from local Essalam Moroccan. Mohammedia-1 importers / (No Aswak Marrakech-2, distributors. alcoholic b Essalam Kenitra-1, Temara- Plans to open 2 everages or pork sold) 1, Agadir-2, new Tanger-2, Oujda-1, supermarkets Casablanca-2, each year Essaouira 1 Source: Agricultural Affairs Office, Ministry of Commerce and Industry The supermarket stores Marjane first opened in Morocco in the early 1990's and were launched by Morocco’s largest consortium of private companies, Société National d’Investissement (SNI). These supermarkets are very modern and are comparable to ones in the U.S. They are usually located in relatively remote areas and thus are visited by higher-income consumers who are also the major buyers of imported food products. Marjane employs about 5,600 people and serves annually over 35 million customers at its 29 stores each year. Competing on the same segment with Marjane chain is Aswak Essalam supermarket chain. These are smaller supermarkets but comparable to Marjane stores in their concept as they also carry food and non-food and are considerably larger than other supermarkets in Morocco. Aswak Essalam does not carry alcoholic beverages or pork products in order to be perceived by the public as more tradition-preserving genuine Moroccan supermarkets. In 2013, Aswak Essalam projects to sell 30 percent of its capital to the Saudi investor Ben Dawood. This transaction means to increase the competitiveness of Asswak Essalam. A2. Small Retail Supermarkets, Convenience Stores, Large Grocery Stores Entry Strategy Typically, supermarkets in this category don’t get involved in direct imports because of the small volume involved. The supermarkets belonging to the largest chains ACIMA and Carrefour Market (Ex Label Vie) buy through their purchasing boards. Thus, importers will still play a major role to introduce new products to these convenience outlets because: Many have long experience in this market and have agents that work on a regular basis with these supermarkets and are in a better position to negotiate space and promotional events. They have their own distribution fleet that can deliver relatively small volumes. They carry out promotional activities regularly in these stores. These supermarkets work often with a relatively small number of suppliers that carry known brands that sell well. Markets Structure Scheme 2: Modern distribution channel for Small Retailers Modern Distribution Channels (for imported products) Small supermarkets, convenience Stores, Gas marts Exporters Local Importers / Distributors / Importing Wholesalers ACIMA B.I.M. Buying Label vie Group Small Buying Platform Platform Buying Platform Supermarkets Small / ACIMA B.I.M Carrefour Market convenience Small Supermarket Convenience Supermarkets / Large Grocery Stores / Gaz Marts Source: Agricultural Attaché Office, Rabat U.S. exporters will find it very difficult to sell directly to these supermarkets because of the small volume involved. Supermarkets, or their buying board for the existing chains, buy imported goods directly from importers. For the convenience store chain ACIMA, food purchases are combined with those of Marjane (see large supermarket chains section). On the other hand, some importers devote full time sale agent(s) to deal with specific supermarkets. Eventually, the importer’s trucks and utility cars deliver the imported goods to the supermarkets. In addition, the small self-service stores may also purchase from local wholesalers if the quantities involved are very small. Both importers and wholesalers provide financing to supermarkets. Typically the importer’s agents deliver the imported products to the supermarkets in small vans (panel trucks) or trucks. Table 4: Morocco’s Small Retailers in 2012 Estimated Re Estimated tailer Owne Turnover rship Number Loca Purchasing tions Name ($Millions Agent type Outlets ) Small 100 % local $250-300 33 Casablanca-12, Buying Board. Supermarket since August Rabat-3, Buys from Chain 2007. Same Marrakech-2, Importers. Spot Promotio n Produc ts (ACIMA) Owner as Fes-1, Safi, 1, Also through (6 registers, Marjane Tanger 3, combined typically > Supermarkets Khouribga-1, imports with 20000 ft2) Beni Mellal-1, El Marjane Chain Jadida-1, Temara-1, Berrechid-1, etc Small 95 % Locally $250-300 40 Casablanca-13, Buying Board. Supermarket owned by Label Rabat-7, Buys from Chain Vie SA and 5% Marrakech-1, Importers. (Carrefour owned by Fes-1, Mekness- Import Markets) Carrefour 2, Khemissat-1, Also through (> 3 Agadir-1, El combined registers, Jadida-1, Settat imports with >25000 1 Mohamedia 2. Carrefour ft2) Kenitra 2, Temara 1, Safi 1 Sale-1… Small Local – private $50-100 25 Casablanca 15, Buys from Supermarket Rabat-7, Importers, (> 3 Agadir-3 and registers, wholesalers >25000 ft2 ) Large grocery Local -private $100-150 200 Casablanca 75, Buys from stores (Self- Marrakech-15, Importers and service, > 1 Rabat-15, Wholesalers register, < Agadir 10, etc. 2000 ft 2 ) BIM Hard A Turkish $15-20 109 Casablanca, Through its discount Franchisee. Rabat, sale and first franchise (Groupe plans to cover centralized First shops in Birlesik other regions. purchasing 2009 Magazal A.S) platform; project a second opening Source: Importers, Ministry of Commerce and Industry, Agricultural Affairs Office, Rabat. The first 2 groups (small supermarkets) are much smaller than Marjane but have a minimum of 20,000 ft2 and 3 to 6 registers. These stores offer a wide variety of products including non-food items. The largest stores in this category sale also house appliances. Typically these supermarkets include butcher shops, sell frozen products and alcoholic beverages, and have relatively limited parking space. They are located in, or within walking distance to, medium to high-income neighborhoods. These supermarkets are appropriate outlets for imported products since they are frequented by medium-high income consumers and could be used to carry out in store promotion activities. ACIMA convenience supermarket chain opened 33 supermarkets over the past nine years. Thanks to the strong financial capability of the owning companies, it is expected to open 5 new supermarkets every year. In fact, ACIMA and the largest supermarket chain in Morocco Marjane belong to the largest consortium in Morocco Société National d’Investissement (SNI). These large convenience stores are meant to attract urban consumers from the traditional mom & pop shops and open-air market where they would typically go. ACIMA as a convenience store offers a much larger percentage of food products including fresh fruits and vegetables. It is estimated that ACIMA supermarkets carry over 5,000 items. The Carrefour Market (Ex- Label Vie) carries some 4000-5000 food items (40 % of the total number of products carried). Currently, they continue to buy mostly through importers but do get involved directly in imports of the private label (Leader Price) products and of some specialty products (some alcoholic beverages). The deep-discount food outlets have been gaining ground recently in Morocco, with the Turkish deep- discounter BIM continuing to grow reaching 109 outlets in 2012, and the arrival of new-comers such as the British group Costcutter. Costcutter opened its first stores in Marrakech in late 2011 and intends to open 15 additional stores by 2015. The Label Vie group also intends to get into the deep-discount market segment through its Atacadao stores. In 2012, due to financial and organizational difficulties, and stiff competition, the small convenience store chain called Hanouty (launched in 2006) officially went out of business. Financial difficulties concerned Hanouty concept, for which the franchiser provided credit for working capital, and management for all Hanouty shops. In addition, the buying platform established by the franchiser for contracting local suppliers and importers and dispatching the products did not reach a profitable threshold. Gas Marts This category includes mostly gas-marts of 500 to 3,300 ft2 with one electronic register and carrying mostly convenience food. The first store of this category opened in early 1990's. More and more gas distributors are including this service in their best-located (near exit of the major cities) gas stations. This segment is likely to continue to develop in the future. These stores are usually more expensive and carry a large number of imported convenience items, especially snack food, non-alcoholic drinks, and confectionary. Table 5: Gaz Mart Retailer’s chain in Morocco Estimated Retaile asing r Name number of Location Purch Ou Agent tlets Afriquia Mini-Brahim 20 Casablanca, Marrakech, Buys from Importers (Managed by Maroshop) Agadir, Meknes, Settat, And distributors. and highways. Mobile Gas Stations On 14 Casablanca, Rabat, Buys from Importers the Run / Mobile Mart Marrakech, highway and distributors. Shell Gas 19 Casablanca and highways Buys from Importers Stations and distributors. (Select Shop) Source: Agricultural Affairs Office No official data is available from the Moroccan Ministry of Commerce and Industry. C. Traditional Markets - "Mom & Pop" Small Independent Grocery Stores Entry Strategy Traditional Food Distribution Channels (for imported products) Grocery Stores, Mom & Pop Stores Exporters Local Importers / Distributors / Importing Wholesalers To reach these small mom & pop stores, imported products will have to go through importers and very likely wholesalers. The quantities involved are too small and imported food products are sold only in Traditional larger shops or in shops that are located in medium to high-income neighborhoods. Market Wholesalers Structure Scheme 3: Traditional distribution channel Grocery Stores / Mom & Pop Stores Source: Agricultural Attaché Office, Rabat Company Profiles This category includes an estimated 45,000 grocery stores that are not in the above categories. Their size varies from less than 226 ft2 (estimated 40,000 stores) to 1,000 ft2 (500 stores). These shops have limited financial resources and are typically managed by one person. The consumer cannot help himself in this store because the goods are behind a counter. Therefore, the shop owner plays a major role in introducing new brands to the consumer. These shops are literally packed with a wide range of convenience and relatively low price food and non-food items. Depending on the location and size, some of these stores may have some imported products. Many of these stores in the cities have a refrigerator and a very small number have ice cream freezers. Convenience, proximity and credit to the final consumer are their strongest assets. SECTION III. COMPETITION The Morocco-US free trade agreement (FTA) that entered into force in January 2006. The FTA provides U.S. exporters with new opportunities of exporting high value and consumer-oriented products in the medium and long term. With an average duty on consumer-oriented products of about 50 percent and the phase out of duties under the FTA is scheduled over 10 years, the cuts in duties and U.S. competitiveness should become more significant as time passes. In previous years, Moroccan imports of high value products from the U.S. have grown due to a weaker dollar compared to the Euro and more competitive U.S. prices. The most significant increase came from dairy products used as ingredients by the food industry (butter, skim milk powder, dairy ingredients, whey, and cheeses) or to be resized and repackaged locally for retail sale (butter). Also, thanks to the FTA, the newly introduced U.S. apples contributed significantly to increase of U.S. share of high value products in this market. However, Moroccan imports of U.S. consumer-oriented products directly from the United States are rather marginal as noticed when visiting Moroccan supermarkets or retail shops. The main reason for this small share is the geographical distance and the absence of a regular direct shipping line between Morocco and the U.S. In practice, the long shipping time (up to 45 days because transit by Europe is necessary) exclude all short-life products from being exported to Morocco. This situation, however, may improve in the coming years with the opening in 2009 of a direct shipping line between the Moroccan port of Tanger-Med and the port of Norfolk, VA in the U.S. East Coast. Moroccan consumers (and importers) are more familiar with European (French and Spanish) products and lifestyle. Middle and high income classes in Morocco would tend to watch more regularly French and Spanish TV channels in the Northern part of the country. European exporters regularly visit Morocco and offer their products to importers and distributors. Most of the key Moroccan importers also regularly visit food trade shows such as SIAL (Paris), ANUGA (Germany), ALIMENTARIA (Spain) and Dubai Food Shows where they meet with European and Asian producers and exporters. Locally produced goods continue to account for the largest share of food products sold in local retail outlets. Imported consumer-oriented food products, because of their generally high price (high duties), are mostly sold in supermarkets and grocery stores located in higher income neighborhoods. It is estimated that only about 10-15 percent of the population repeatedly buy imported products. The local industry produces a relatively limited number of products that in many cases can hardly keep up with the high quality and diversity of imported products put on the supermarket shelves every day. Table 6: 2011 Morocco Imports by product category Product Major Supply Strengths of Key Supply Advantages and Category Sources Countries Disadvantages of Local Total Suppliers Imports from all origins (Millions of dollars) Dairy $283 1. EU 38% Price competitive. Importers more exposed Very seasonal production. million 2. New Zealand to other suppliers. Some major suppliers Morocco is a net importer of have their representative/agent in Morocco. 25% butter and skimmed milk 3. U.S. 23% U.S. products developed good quality powder for production of milk Butter $130 reputation. The weak dollar and U.S. mi 4. Argentina 3% derivatives (yoghurts). llion M 5 competitive prices boosted imports from the . Uruguay 3% Virtually no cheese ilk Powder U.S. in 2011 to more than $50 million $20 6. Australia 1% production (except for million Ch 7.Others 7% spread cheese) in spite of eese $56 the high local demand. million - Whey & milk product $68 million - Other $9 million Processed The juice Price competitiveness. Egypt has a With the exception of citrus Fruit $28.1 suppliers Free Trade Agreement with juice, there is no significant Egypt 18% Morocco). production of other juices. O France 16% Extensive smuggling activity range Juice $13 Spain 14% trough the two Spanish .8 L Other EU 1% enclaves in the North of emon Juice $1 Argentina 12% Morocco. .4 P Brazil 9% ears Juice $ 1 China 4% .01 Others 26% Apple juice $ 0.9 Ananas juice $ 0.8 Other Juices $2.0 Jam/Jelly $3.9 Other Fruits Preparations $4.2 Meat & Carcasses From Price competitive. (Argentina). Virtually undeveloped meat Poultry : Argentina / Currently Beef carcasses are processing industry in $24.1 Australia Ground imported only for the Military. Morocco. Beef mostly Lack of knowledge of US meat B from Argentina / supply. eef Carcass( M Spain and ilitary) $15.1 G France. round Beef (45-150g) $5.8 MDM $2.4 Argentina 39% Pork Meat France 25% $0.3 Australia 19% Other meat Uruguay 9% $0.5 Brazil 4% Others 4% Product Major Supply Strengths of Key Advantages and Category Total Sources Supply Countries Disadvantages of Local Imports from Suppliers all origins (Million of Dollars) Beverages EU Share: 91% Well established brands. Some local production $66.4 US Share: 1% Competitors are (mostly wine and beer). Others 8% represented/ have Morocco population is 99% W agents in Morocco. Muslims. Consumption is hisky & Vodka $33 tolerated. .6 Wine $13.3 Most hard liquors come Soft Drinks, in duty free under the Carbonated $13.3 US-Morocco FTA. Beer $3.2 Gin $1.1 Mineral Water/Sparkling $1.5 Others $0.7 Dried Fruits U.S. Share: $7.8 million Cashew and Pistachios Extensive smuggling activity and Nuts $ Stiff competition from are duty free under the trough the two Spanish 12.18 India, Turkey, China, Morocco-US FTA. enclaves in the North of Iran. Morocco. Dried Raisins $2.99 Almonds, Shelled $2.89 Walnuts $ 2.1 Pistachios $ 1.8 Cashews $1.1 Dried Apricots $0.8 Other Dried Fruits $0.5 Processed Ve Major European brands Most of the consumption is getables $39 are represented locally canned mushroom, sweet by local importers. Price corn, asparagus, palm, and competitiveness for pulses. Except for the Processed Tomato canned corn from traditional canned peas, and es $ 9.9 P Thailand. tomato paste, other products reserved V are basically not produced by egetables local manufacturers not frozen $13.6 Frozen Vegetables $10.4 Onion & Similar, Fresh $1.1 Canned Corn $3.7 Seafood $141 Netherland: 43% Most seafood can come Moroccans are mostly used to Other EU: 25% into Morocco duty free purchasing fresh fish (not C Argentina: 10% under the FTA. Great frozen). Traditional rustaceans : $90.2 China: 9% potential for US distribution channels not Fish, Cured, Smo Others 13% products. suited for frozen fish. ked: $ 10.5 F Moroccan consumer is ish Fillets, Meat: $9 familiar with few fish species. .9 Mollusks: $12 Fish, Frozen, Whole: $10.4 Fish, Whole Fr/Ch: $7.1 Live Fish: $0.5 Fresh Fruit EU has a duty free US has a tariff rate No significant production for $92.9 Quota for apples. quota under the FTA Red Delicious. No regular Competition from open from February to quality. :Tunisia (Dates); May Exports consists - Dates $69.7 Ghana, Costa mostly of Red Delicious - Banana $11.2 Rica,(Banana); Italy, Apples. Expected to - Apples & Pears $11 Spain & France grow. .5 - Fresh Raisins $0.5 (Apples) Source: Agricultural Affairs Office, Moroccan Customs Data (Office des Changes 2009) Exchange Rate ($/dh) 2011:8.08 SECTION IV: BEST PRODUCT PROSPECTS Products present in the market that have good sales potential: Canned Fruit and Vegetables Health and diet products (not organic) Confectionary Dried Fruits and Nuts (Almonds, Pistachios, Dried Prunes and Raisins, walnuts) Pop Corn Non Salted Butter / dairy products Breakfast Cereals / Biscuits, crackers / Flour Mixes Pulses (lentils / Chickpeas / Green beans/ white beans) Sauces including hot, Asian, BBQ, Salad dressings Snack Foods, including diet snacks Pet Food Wine A. Products Not Present in Significant quantities but which have good sales potential: Pistachios / Pecan Seeds Preferential Access under FTA Garlic Preferential Access under FTA Mushrooms Preferential Access under FTA Soy Sauce Preferential Access under FTA Spaghetti Preferential Access under FTA Poultry Meat Tariff Rate Quota under FTA Seafood Preferential Access under FTA B. Products Not Present because they Face Significant Barriers Meat Customs duties Cheese Customs duties Rice Customs duties SECTION V. POST CONTACT AND FURTHER INFORMATION Sarah Hanson, Agricultural Attaché Email : Idriss EL Honsali, Agricultural Specialist, email : Phone : (212-53) 776-2265 (Ext. 2022) Fax: (212-53) 776-5493 Reports that might be useful to U.S. exports of consumer-oriented food products to Morocco (can be found at website: Report Number Date Issued Exporter’s Guide MO1214 December 2012 FAIRS, Export Certificates MO1210 October 2012 Food and Agricultural Import Regulations and Standards-Narrative MO1215 December 2012 HRI, Food Service Sector MO9001 February 2009
Posted: 27 December 2012

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