FOOD CHAIN

Kuwait 2018 | AGRICULTURE | B2B

Firms in Kuwait are not only creating economies of scale to better serve the Kuwaiti market, but widening their scope and quality offerings to better target the entire Gulf.

Mubarak Nabil Jaffar
MUBARAK NABIL JAFFAR
Co-Founder & CEO
Kuwait London Company (KLC)
Garry  Walsh
GARRY WALSH
CEO
Mezzan Holding Co.

How would you describe your role in the food sector industry?

MUBARAK NABIL JAFFAR The Kuwait London Company was set up in 2008, and F&B was the first operational business we ventured into. We set up The Kitchen in 2009, a delivery-based restaurant that offered reasonably priced good food delivered within 45 minutes to an hour. At the time, the delivery market was mainly dominated by several large players, and there were few local concepts that specialized in delivery. In 2009, we joined Talabat as a restaurant partner and, as our orders started picking up, this led us to acquiring Talabat in 2010 as we saw considerable potential in the online food delivery market. We began to invest and promote the shift from the traditional methods of ordering via phone to online. As the online market grew, this positively affected us and other businesses. We then decided to invest further and develop our restaurant business and set up small delivery outlets all across Kuwait. We now have five brands and 16 operating outlets and are planning on expanding further in Kuwait and across the GCC.

GARRY WALSH Mezzan Holding Co. is a publicly listed company with a turnover of USD728 million. Around 73% of this comes from food, and 70% of our overall turnover is in Kuwait. When it comes to the food sector we represent third parties like General Mills, though we also distribute our own brands such as Aqua Gulf, Kitco, and Alwazzan. Excluding meat and vegetables, we represent one in five FMCG and food products sold in Kuwait. We, therefore, have reasonable scale in Kuwait. It is no secret that we seek to expand our horizons beyond this country. Six years ago, 99% of our profits came from Kuwait; hopefully in 2017 it will be about 65%. We constantly strive to make acquisitions abroad to continue to reduce that percentage, while also growing in Kuwait.

What is your growth strategy?

MNJ We invest heavily in marketing especially online by means of online banners and social media. We also use a great deal of social media influencers to promote our restaurants. They do not have to be celebrities in the traditional sense; however, they have a strong influence and following. As a firm, we continuously focus on improving our delivery service and constantly study ways to improve delivering quality food to customers. Our outlets are strategically located in key areas, our packaging is specifically designed to maintain the quality of the food, and our hot bags preserve the temperature of the food during the delivery process. Though the current market is extremely saturated and the food scene in Kuwait has been mainly dominated by franchises, recently many local concepts have entered and have offered a more localized product to the market. It is important to continuously create, improve, and innovate, since consumers' tastes and behaviors are always changing. We focus on consistently improving our product range and branding, and manage most departments in-house, which allows us to have more control and flexibility to adapt to changing market conditions.

GW Our heartland is the brands we manufacture, and these brands are sustainable over the long term because of the localization factor. For example, water is a cheap and heavy product so the bottling plant needs to be located in the market we serve in order to be competitive logistically. The same is true for chips, which are a bulky product to transport, and bakery products, which need to be local to be fresh. Therefore, we constantly strive to build our distribution network in the rest of the GCC for our core brands. One way we do this is via acquisitions through which we gain factories, distribution networks, and land to expand our operations and brands. Being able to push our own brands drives our economies of scale and factory utilization. Within our food portfolio, our margins continue to progress as we do more of our own brands, which give us a higher margin than third-party brands. Looking across the GCC, Kuwait is one of the few markets still growing. Qatar presents the greatest challenge in terms of dynamism for obvious reasons; everything has changed in Qatar now. We used to have a solid and secure supply chain there, and it has taken us two months to construct an entirely new one in Qatar. Long term, the mouths are in Saudi Arabia. As a company, this is where one must be. The UAE might be going through a tough time at the moment, though it will bounce back. The UAE constantly reinvents itself and finds a new reason for people to go there and invest. I have no doubt that will continue.