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Kuwait: Oasis for U.S. Frozen Food Exporter
By Hovaguim Kizirian
Kuwait remains a tariff-free haven for
frozen foods, and U.S. frozen food exporters have been quick to
capitalize on it. As of 1995, they have upped their market share
to 25 percent, reaching 3,600 metric tons.
To give a further perspective of the growth expected in this market: With a projected 15-percent increase each year, by the year 2001 Kuwait will be importing an estimated 30,000 tons, a third of which will come from the United States.
Frozen french fries account for about 70 percent of U.S.-origin frozen vegetable imports.
Quality Frosts Competition
Due to the scarcity of water, Kuwait itself produces a limited amount of fresh vegetables, with no domestic frozen vegetable industry. Any frozen foods used by consumers must be imported. Four countries supply 80 percent of this import market: Egypt, the United States, the Netherlands and Canada.
Egypt's and the Netherlands' prices reflect the advantage of proximity; Egypt trims its costs further with cheap labor. U.S. products, relying on their reputation for quality, have succeeded handily in conquering market share--boasting a fourfold increase from 1989 to 1995, a time when the overall market doubled.
The causes of Kuwait's expansion market:
Distributors: Adept, Up-to-Date
Nearly all frozen vegetable imports come through the modern, state-of-the art port facilities in Kuwait's two main seaports, Shuwaikh in Kuwait City and Shuyaiba, 25 miles further south.
A limited number of food distributors, which own frozen storage facilities and refrigerated trucks, distribute frozen food products directly to retail outlets, the wholesale market and institutional end users.
The trade is dominated by 43 consumer cooperative societies that account for 70 percent of all retail food sales. Much of the remaining market share is taken by a single, privately owned retail chain that operates six outlets.
Small, family-run stores and restaurants, as well as large families, normally purchase their food requirements from the wholesale market.
The opening of several U.S. restaurant chains has led to a new dining out trend in Kuwait, which also has significantly boosted demand for frozen french fries.
Retail prices for frozen vegetables normally run 40 to 50 percent above the import price, due to distributor margins that run 20-30 percent and wholesale and retail margins that add about 10 percent each.
An oddity of this market's success is its curious lack of advertising. Exporters interested in advertising frozen vegetables might get the most for their promotional dollars from newspaper ads, trade sources believe.
Spotlighting U.S. Origin
Although there are no legal requirements for package size, consumers are partial to packages sized 450 to 500 grams, followed by 900 - 1,000-gram sizes. Packages of french fries run a little larger, with 1-, 2- and 2.5-kilogram packaging preferred.
Institutional end-users stick to standard 2.5-kilogram packaging for all frozen vegetables.
Like their counterparts worldwide, Kuwaiti shoppers respond to attractive, colorful packaging. Especially appealing-- ample transparent sections that allow a peek inside.
There is no denying the popularity of U.S. brands in Kuwait. U.S. suppliers, wanting to maximize this advantage, should play up their product's origin.
Arabic Stickers OK Over Labels
Kuwait enforces Kuwaiti Standard KS-42/1973 for food labels. This local standard is identical to Gulf Cooperation Council (GCC) Standard GS-9/1984.
Labels can be bilingual as long as one of the languages is Arabic. And the Arabic language version must not cover or contradict information on the original label.
Under KS-42, food labels must include the following information on the original label or primary packaging:
Production and expiry dates must be engraved, embossed, printed or stamped directly onto the original label or primary packaging at the time of production, using indelible ink.
A cultural caveat: Make sure there are no pictures or mention of pork or alcohol on packaging.
Effective July 5, 1997, Kuwait started to enforce Ministerial Decree 146/1996, which establishes shelf-life limits for a variety of food products. According to Kuwaiti regulations, the limit for frozen vegetables, including french fries, is 18 months.
USDA Sources
For a copy of the complete market report on which this brief was based (includes addresses of distributors), contact:
Trade Assistance and Promotion Office
AgBox 1052
AGX/FAS/USDA
1400 Independence Ave., SW.
Washington, DC 20250-1052
Phone: (202) 720-7420
Fax: (202) 690-4374
E-mail: FASInfo@fas.usda.gov
For supplier lists and foreign buyer lists:
Ag Export Connections
AgBox 1052
AGX/FAS/USDA
1400 Independence Ave., SW.
Washington, DC 20250-1052
Phone: (202) 720-7103
Fax: (202) 690-4374
E-mail: FASInfo@fas.usda.gov
Barrier-Free Customs Expedite Imports
If shipments meet the requirements of packaging, labeling and safety, most need only one to two days to get through customs and health clearances. Fees total about $33 per consignment.
These import documents are required for frozen vegetables:
Hovaguim Kizirian is an agricultural specialist with FAS' Agricultural Trade Office in Dubai, United Arab Emirates. Tel. (011-971-4) 314-063; Fax (011-971-4) 314-998. E-mail address: atodubai@emirates.net.ae
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