The July 2010 report, prepared by consultancy firm Deloitte, states that Turkey still has the lowest per capita consumption of packaged food in Europe, and identifies potential for foreign direct investment (FDI) in these sectors, with Turkish GDP growth of 6.8 per cent predicted this year by the OECD.
According to the report:“Although Turkish consumers have been shopping primarily from small markets and grocery stores, the market share of these traditional retailers has been steadily eroding.
“Through the widespread presence of modern MGR outlets since the early 1990s and rising disposable incomes, consumption has been shifting towards packaged and processed foods.”
Turkish Statistical Institute figures back this view: national MGR sales totalled 11.8bn Turkish Lira (TL) in 2005, but are predicted to rise to 22.3bn TL this year (around 40 per cent of all food and beverage sales) and 34.6bn TL by 2014.
Private label food
Major market players in a “highly competitive” MGR market include Migros with 9 per cent, followed by Carrefour with 8 per cent and BIM with 7 per cent, the report states. Other international names include Metro and Tesco Kipa.
Euromonitor senior research analyst Sarra Kassem told FoodNavigator.com that she recognised key changes in Turkish consumption habits: “Ready meals are doing particularly well in 2010, with many launches. Throughout the recession people spent more time eating-in at home, and that trend has continued.”
Kassem added that the supermarket boom coupled with the recession had led to strong growth within private label foods: “The sector isn’t as developed as in the UK, say, and the quality is lower, but pricey products like olive oil are doing particularly well.
Sector specifics
Bakery goods form majority of total food and beverage companies by number in Turkey (65 per cent), and form a crucial part of Turkish diets. Thus the report noted rising demand for packaged artisan and high-fibre breads, as well as potential export-led growth in organic and halal goods.
Kassem also identified dairy as a significant growth sector, while she sees alcohol as a fast-growing niche area with beer, wine and whisky sales booming: “But consumption is limited to Istanbul, Ankara and the coasts. It’s not really pronounced in rural areas,” she said.
44 foreign companies now operate in the Turkish food and beverage sector, and recent merger and acquisition activity saw Cadbury’s acquire native confectionery firm Intergum for US $450 in late 2007; Canadian argi-processing concern Alliance Grain Traders bought the Arbel Group for US $134m in July 2009.
The BMI pinpointed Turkey as the fifth most attractive emerging European market for FDI in 2010, and given Turkey’s push for EU accession, speculation abounds over how this would affect the food industry.
A Turkish investment support agency spokesman told FoodNavigator.com: “Achieving higher quality and hygiene standards will be the priority in the reform process, with production quotas for food products determined to suit EU needs.”