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Exporters Keep an Eye on Egypt
By Manal El Masry
Not everyone is aware of Egypt's muscle in the marketplace,
but the Arab Republic of Egypt is the ninth largest country
market for U.S. agricultural exports. Overall, U.S. agricultural
exports to Egypt in 1996 totaled $1.6 billion.
Their first choice was bulk commodities, including $925 million in wheat, $360 million in coarse grains, $43 million in cotton and $21.5 million in soybeans.
The second most favored U.S. agricultural exports to Egypt in 1996 were intermediate products, including $21 million in vegetable oils; $15 million in soybean meal; $10 million in animal fats; $8 million in live animals; and $1.6 million in cocoa and cocoa preparations, beverages and sugar. Egyptian buyers also purchased $43 million worth of U.S. consumer-ready agricultural exports in 1996, including $18 million in fresh, chilled or frozen red meats; $9 million in dairy products; $4.6 million in edible fruit and nuts; and $1.4 million in cereals.
Egyptians Like U.S. Food
Egyptians liked U.S. agricultural products so much that they accounted for 29 percent of the total Egyptian agricultural import market in 1996.
The Egyptian consumer-ready food market is relatively new and undeveloped, and no single supplier controls market share. U.S., European and South African companies dominate the niche.
Sales of all U.S. consumer-oriented agricultural products to Egypt totaled $43 million in 1996. Top choices were cereals, accounting for 84 percent; cocoa and cocoa preparations, 27 percent; beverages, 21 percent; edible fruit and nuts, 15 percent. Miscellaneous edible preparations, dairy products and processed meats also were strong sellers.
Moving in Fast with Fast Food
Demand for processed, ready-to-eat food is on the rise, and U.S. firms dominate the Egyptian fast-food market, accounting for 72 percent of sales. Of all foreign fast-food franchises in Egypt, only two are not American: the United Kingdom's Wimpy and Pakistan's Tikka.
There are growth opportunities for snacks, cereals, juices, dried fruits and nuts. U.S. brands like Kelloggs, Ralston Purina, Keebler, Betty Crocker, Hunt's, Hershey, Mars, Blue Bird, Juice Bowl and Mystic are strong competitors. Most nuts and dried fruits are supplied by other countries, and dairy products are supplied primarily by European countries.
For imported meats and meat products, religious considerations are important. Animals must be slaughtered according to the Halal ritual. In addition, a limit of 7-percent fat content in imported beef excludes imports from the United States and most other countries. Egyptian imports of high-quality beef are restricted to luxury hotels and restaurants.
Restyling Their Food Traditions
Unlike the United States, where people frequent fast-food restaurants for speed and convenience, Egyptian teenagers and families go to fast-food restaurants to spend leisure time and socialize with friends. Fast-food customers are primarily from the upper and upper middle classes. They are well educated and have traveled abroad; many have worked in Gulf countries where they became acquainted with fast foods.
With a growing number of high-income consumers and more women joining the workforce, U.S.-style food outlets are in demand. Products perceived as both Western and new-to-market have wide appeal, especially among the young and affluent.
Egyptian Buyers Want Bargains
As long as U.S. products are competitively priced, exporters can capitalize on their high-quality, made-in-the-U.S.A. image. Exporters must be willing to accept market risk, offer competitive prices and be quick to respond to Egyptian inquiries.
Egypt has a rapidly expanding food processing sector that includes flour milling, breweries, vegetable and meat processing, beverages and juices, pastas, filling and packaging, sugar milling, dairy products, edible oils, biscuits and confectionery and snacks.
Pasta processing has grown rapidly during the last 10 years, with the private sector producing approximately 60 percent of the total requirement. Dairy processing is valued at $1.2 billion a year. Several U.S. brands such as Hostess snack foods, Doritos chips and Heinz ketchup are produced under license.
Beef and poultry processing are also expanding. Specialty products like chicken nuggets, hamburgers and hot dogs are readily available.
Reaching That Egyptian Consumer
Retail outlets in Egypt span a full range, from supermarkets and large and medium-sized grocery stores to mom-and-pop shops, kiosks, public sector cooperatives and stores specializing in the sale of limited items such as fruits, vegetables or meat.
The retail trade is dominated by small, privately owned shops and vendors.
Most Egyptians still buy fresh meats from local butchers instead of supermarkets. Government cooperatives with hundreds of outlets also combine wholesale and retail activities. Importers sell to retailers as well as wholesalers.
Middle and upper class Egyptians buy most of their foodstuffs from supermarkets or other food shops. Small supermarkets are widespread in Cairo, Alexandria and other big cities.
Consumer-ready products are imported by many relatively small companies that buy small quantities of a wide range of products. U.S. exporters should work closely with reliable importers who have knowledge of and experience with Egyptian import requirements.
Interested in a franchise business? Topping the list of opportunities for franchises in Egypt: candy, popcorn, pancakes and waffles, pretzels, bagels, ethnic food and seafood.
Know Your Import Requirements
The Government of Egypt requires new-to-market, consumer-ready food imports to be licensed by the government and marketed by the private sector. Packaged imports must be suitably packed, clean and odorless. Packaging must be clearly labeled in Arabic although English may be added.
Imports must have at least 50 percent of shelf life remaining at the time of import. If the product is meat or poultry, the label must state: Slaughtered according to the Islamic ritual.
Egypt lowered the maximum tariff rate from 70 percent to 55 percent. Tariff rates between 50 percent and 30 percent were reduced by 10 percent. For many capital goods, the tariff today is 10 percent or less.
Need further information? For your copy of A Practical Guide to Egyptian Food Import Requirements and Procedures, contact the author as listed below.
The author is a marketing specialist with the U.S. Embassy in Cairo. Tel: (011-20-2) 357-2388 or 357-2389. Fax: (011-20-2) 356-3989. E-mail: agcairo@fas.usda.gov
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