Agri-Food Trade Service

Inside Morocco
Processed Food Trade

November 2010

International Markets Bureau
MARKET INDICATOR REPORT | NOVEMBER 2010

Global Analysis
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INSIDE THIS ISSUE

• Executive Summary
• Trade Summary
• Consumer Trends
• Food Retailing
• By the Numbers
• Competitive Landscape

EXECUTIVE SUMMARY

Officially known as the Kingdom of Morocco and situated on the north-western corner of Africa, Morocco borders Algeria on the east and southeast, Mauritania to the south, and the Atlantic Ocean to the west. Morocco has a total surface area of 710.850 square km and a population of nearly 34 million.

Agriculture is dominant in Morocco with almost half of the active population being employed in the sector. In total, the agricultural sector contributes around 15% to the Gross Domestic Product (GDP). Grains, fruits and vegetables are the country's main crops.

Economic growth relies on this sector. Other Industries account for around one-third of the GDP, particularly the textiles, leather goods, food processing, oil refining, and electronic assembly sectors.

Over the past decade, Morocco has embarked on an ambitious program of structural reforms in several fields, aiming to further liberalize its markets and enhance the competitiveness of its economy.

TRADE SUMMARY

Morocco was a net importer of agri-food and seafood in 2009. Imports totalled US $4.4 billion, and the sector trade deficit was US $1.02 billion. Morocco's agri-food and seafood imports have been growing over the past five years at an average of 25% per year.

Morocco's key agri-food and seafood imports in 2009 were cereals, animal or vegetable fats, soybean oil, raw sugar cane and oil seeds.

Canada was Morocco's fourth-largest supplier of agri-food and seafood products with US $309 million, after the United States (US $697 million), Brazil (US $692 million), and France (US $584 million). Canada supplies approximately 7% of Morocco's agri-food and seafood imports.

Moroccan processed food imports continued to grow in 2009, reaching US$2.4 billion. Canada supplied less than 1% of Morocco's processed food imports. Brazil (US $490 million), United States (US $351 million), and France (US $193 million) are the largest suppliers of processed food to Morocco, controlling 44% of the market. Major processed food imports include, sugar cane, soy bean oil, green tea, and butter.

In 2009, Canada imported CAD $56.5 million of agri-food and seafood products from Morocco, an increase of 21% from 2008. Canada is now ranked 12th in the list of countries importing food from Morocco.

Total Moroccan agri-food and seafood exports represents a 1.7% share of Canada's global agri-food and seafood imports. Canada imported mainly citrus fruits, olives, and fish and seafood from Morocco in 2009.

CONSUMER TRENDS

The booming economy and the developing middle class in the country fuelled retail sales growth, with families enticed to spend thanks to easy access to loans and lines of credit. However, as the Moroccan economy entered a recessionary phase in early 2009, many consumers became cautious in their spending, with many trying to reduce their debt load.

With disposable incomes rising and rapid rates of urbanization, the country is becoming an increasingly attractive consumer market for brands and retailers across virtually all categories. Moroccan food expenditures have significantly increased. This is primarily due to the rising consumption of food, as a result of rising incomes, rather than inflation. Some packaged foods have experienced retail growth, specifically those in the dairy and bakery sectors.

The growing consumer preference for products in smaller packages is benefiting a variety of packaged food categories, including biscuits, confectionery, sweet and savoury snacks, and soup. Manufacturers are expected to benefit from this trend, as they can gain higher volume sales from selling mini-sized products due to a wider consumer base and more frequent purchases of smaller sized products, as theses products are perceived to be affordable.

The demand for convenience foods is strongest in major Moroccan cities such as Casablanca, Rabat, Marrakech, Fes, Meknes, Agadir and Tanger, given the cities' well-developed distribution systems and tourism industries.

Growth in packaged food retail sales in 2009 was moderate at 5.2% based on current prices. Growth in 2010 is expected to increase to 6.6% and projections are steady at 6% per year until 2013.

In rural Morocco, however, eating and shopping habits are geared more towards a traditional Moroccan lifestyle. Shopping is viewed as the duty of women, and it generally occurs on a daily basis.

FOOD RETAILING

The modern Moroccan distribution chain has been heavily targeted by European multinationals, including many French, but also some Dutch, wholesale distributors. Most of the existing retail chains in Morocco have, or have had, at least some French ownership.

Alliances between Moroccan and European distributors have helped to import knowledge of supermarket management to the country. Purchasing is generally consolidated in a central purchasing department in Europe, while some retailers export their products to Morocco under their private labels.

The Moroccan food distribution sector can be divided into the following categories: large modern retail and wholesale supermarkets chains, small supermarkets, convenience supermarkets, large self-service grocery stores, and family owned neighbourhood stores.

Source: Planet Retail, 2010

It is expected that Moroccan lifestyles will become further Westernized, particularly with the spread of retail chain banners such as Marjane and Metro, greater marketing and advertising campaigns and more direct contact with foreigners.

The convenience of an all-under-one-roof shopping experience is also appreciated. Supermarket and hypermarket shopping remains something of a novelty in larger cities, where it has been only recently introduced.

Private label products are becoming more prevalent in the largest chains, such as Marjane and the cash-and-carry style Metro. Most private label products are packaged and marketed as economy-range, budget products.

Auchan-branded products are available in Marjane supermarkets, and they have performed successfully. They are positioned as less expensive than branded products, but they also benefit from a "French image," which is viewed favourably by Moroccan consumers.

Attitudes towards packaged and processed foods are changing because of the changing lifestyle of urban dwellers, and the wider availability of these products on supermarket shelves. This social shift comes with women having access to the job market and, consequently, less time to cook. Consequently, many households stock up on frozen meals, as well as easily-prepared food.

BY THE NUMBERS

Source: Global Trade Atlas, 2010

COMPETITIVE LANDSCAPE — TOP SUPPLIERS TO MOROCCO

1. Brazilian Exports to Morocco in 2009

• Sugar: US $ 415 million
• Soybean Oil: US $5.7 million
• Butter: US $ 1.1 million
• Prepared Chicken meat: US $ 0.95 million
• Orange Juice: US $ 0.66 million

2. US Exports to Morocco in 2009

• Soybean Oil: US $ 153.7 million
• Soybean Oilcake: US $ 76.4 million
• Brewing or Distilling Dregs : US $ 19.3 million
• Milk Products: US $ 19.3 million
• Beet-pulp: US $ 11.4 million

3. French Exports to Morocco in 2009

• Food Preparation for Infants: US $ 18.2 million
• Offal: US $ 18.1 million
• Beet-pulp: US $ 14 million
• Cream Concentrate/Power: US $ 10 million
• Food Preparations: US $ 9.5 million

4. Chinese Exports to Morocco in 2009

• Green Tea: US $ 105 million
• Pasta: US $ 1.9 million
• Shrimps and Prawns: US $ 1.9 million
• Tomato paste: US $ 1.6 million
• Grapes dried: US $ 1.4 million

5. Tunisian Exports to Morocco in 2009

• Dates: US $ 45 million
• Olive Oil: US $ 27 million
• Soybean Oil: US $ 26 million
• Wine: US $ 6.6 million
• Vegetable Fats and Oil: US $ 1 million

6. Argentinean Exports to Morocco in 2009

• Soybean Oil: US $ 63 million
• Beef Carcasses Frozen: US $ 24 million
• Butter: US $ 6 million
• Anchovies: US $ 3.2 million
• Boneless Beef Frozen: US $ 2.8 million

7. Spanish Exports to Morocco in 2009

• Olive Oil (virgin): US $ 11.4 million
• Olive Oil (refined): US $ 7.3 million
• Vegetable Fats and Oil: US $ 6.5 million
• Tuna: US $ 6 million
• Cocoa Powder: US $ 5.8 million

8. German Exports to Morocco in 2009

• Soybean Oil: US $ 66 million
• Food Preparations: US $ 7.9 million
• Beet-pulp: US $ 6.7 million
• Offal: US $ 6.6 million
• Milk and Cream Concentrate: US $ 1.7 million

The Government of Canada has prepared this report based on primary and secondary sources of information. Although every effort has been made to ensure that the information is accurate, Agriculture and Agri-Food Canada assumes no liability for any actions taken based on the information contained herein.

Inside Morocco Processed Food Trade
© Her Majesty the Queen in Right of Canada, 2010
ISSN 1920-6615 Market Indicator Report
AAFC No. 11282E

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