Q&A: Middle East/North Africa with Nina Bakht Halal

Nina Bakht Halal is USDEC’s Middle East office representative, based in Beirut. In this Q&A, Halal answers questions about dairy marketing opportunities in the Middle East/North Africa.

Q: Are U.S. dairy suppliers capitalizing on Middle Eastern dairy demand as much as they could?

NBH: The United States is just starting to capitalize on Middle Eastern dairy demand, but only to a limited extent. U.S. suppliers don’t always consider the Middle East a top priority market. Political volatility in some areas is erroneously perceived to directly affect the entire region, and this causes a reluctance to make long-term commitments. There is also a general lack of familiarity with the region’s markets as well as the potential value they can bring.

Q: What is your advice to companies who might be worried about political stability or even personal safety?

NBH: Despite its volatile reputation, the Middle East should be high on the list of places to do business. Limited water and arable land limit the domestic ag industries. The region imports roughly 90 percent of the food it consumes, and dairy demand is rising. U.S. products are in demand and enjoy a reputation for high quality, and Middle Eastern markets currently boast good trade relationships with the United States. By and large the Middle East presents fewer market access hassles compared to other regions.

The Middle East is a market with high purchasing power, a growing middle class, large youth base and rapid expansion of the food sector. While political discourse is a major form of socialization in the Middle East, and there can be disagreements over U.S. policies, companies draw a line between politics and business.

U.S. suppliers who are looking to become truly global suppliers need to be more engaged in the market and with its players. Companies can work through USDEC to gain familiarity with the region and its requirements, as well as avoid risky situations.

Q: What are some of the best opportunities?

NBH: The Gulf Cooperation Council (GCC)—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates (UAE)—as a whole is stable, oil revenues provide wealth and dairy consumption is steadily rising. The GCC is also in the midst of an effort to prioritize food security and diversify away from oil, both of which are spurring growth of the retail, foodservice and food manufacturing sectors, as well as tourism.

Q: How do Middle Eastern dairy buyers view U.S. products and suppliers?

NBH: Middle Eastern dairy buyers generally view U.S. dairy suppliers as producers of high-quality products, often superior to local or export competitor products. The U.S. food industry is seen as an innovative product developer with strong consumer insights, willing and able to collaborate with customers and invest in continuous improvements to facilities, products and marketing. The United States is specifically seen as a leader in ready-to-eat foods, home meal replacement and fast food.

Q: How are U.S. dairy suppliers doing compared with other suppliers?

NBH: Europe and Oceania are becoming increasingly aggressive in targeting the Middle East/North Africa through joint ventures, partnerships and a more visible presence. The United States has made few significant moves to match.

Buyers do believe that U.S. competitors want the business and are getting more serious about securing it. But buyers also say that this intent needs to be supported by more visible action. Really elevating the image of the U.S. dairy industry as long-term committed suppliers requires more consistent involvement and more face-to-face communication from U.S. suppliers.

(This article first appeared in the May 2013 edition of Export Profile.)

The U.S. Dairy Export Council is primarily supported by Dairy Management Inc. through the dairy farmer checkoff that builds on collaborative industry partnerships with processors, trading companies and others to build global demand for U.S. dairy products