Packaged Food in Tunisia

Dallas, TX -- (SBWIRE) -- 02/07/2012 -- Libyan struggle increases food prices and leads to supply disruptions. The political turmoil in Libya that erupted in February 2011, has deeply affected the packaged food market in Tunisia. A lot of supplies were sent to the refugee camps along the Ras Jdir on the border. More importantly, as the conflict continues, Libyans start to buy big quantities of packaged food from Tunisia and take them to Libya. This trend was intensified before the month of Ramadan as many retailers and food speculators supplied the Libyan markets illegally.

Pro/pre biotic products gain more space on shelves - Health and wellness awareness is increasing among Tunisian consumers. This trend is due to two main factors. Firstly, the prevalence of diabetes and high cholesterol in the adult population has led to the development of sugar free and reduced-fat food products from manufacturers. Secondly, as more upper-income consumers become sensitive to physical appearance and good body shape, more nutritional products rich in vitamins pushed companies to launch more pro/pre biotic products. The latter, are performing well thanks to the increase in the purchasing power and the better availability in key distribution channels.

Local manufacturers continue to outperform international players

Domestic players, more specifically artisanal outlets, still lead packaged food in Tunisia. This dominance was due to the type of products offered by these domestic companies. Indeed, bread, oil, pasta and milk are the main staples, and they are almost entirely domestically produced. The absence of multinational brands is caused by the very competitive price of the local products, which are subsidised by the government. Therefore, the absence of international brands in the key packaged food categories was the main key factor behind domestic players’ performance.

Political unrest impacts modern groceries

The Tunisian Revolution of January 2011negatively impacted modern grocery retailing. Many acts of looting and destruction were carried out following the demise of Ben Ali’s regime and modern distribution retailers were the main targets. Géant, Magasin Général, Monoprix and Promogro all had stores damaged and looted, some remained closed for more than 10 months. The flagship Géant hypermarket in Tunis was burned down in January and only partially reopened in July. Such events led people to increase their purchases from independent small grocers, since they are closer to residential areas.

Despite a troubled economy, packaged food is set to grow

During the forecast period, packaged food is expected to grow despite an economic setting characterised by political instability. In fact, prices are expected to record a rise due to inflation and the increase in raw material costs; especially, at international level. Although this trend will affect consumption, consumers will continue to spend on the main primary products like bread, milk, oil and pasta, which are subsidised by the government. Besides, the increasing demand from Libyan consumers and the improvement of the foodservice and tourist industries will be key factors behind growing demand for packaged food.

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