What new initiatives isÂ Aâ€™SaffaÂ Foods currently involved in?
AL SHANFARI: DespiteÂ the risky nature of agro investment,Â Aâ€™Saffa hasÂ decided to continue to invest inÂ food. We are currently working with investors from Oman and the region to develop a very large hatching egg (parent) farm. Investors areÂ developing a project worthÂ roughly $165m.Â Another initiative Aâ€™Saffa is currently involved in is developing a further processing food project in Muscat. We will be producing around 3,000-6,000 metric tonsÂ of frozen precooked meals.Â The processed food will range from vegetables to fruits and meats to fish.
How would you describe the business climate in Oman?
AL SHANFARI: TheÂ business environmentÂ and the ease of doing business in OmanÂ are very good. OmanÂ is quite attractive to FDI.Â I think we need to look more precisely into the competitive advantagesÂ of the countryÂ as a whole. Firstly, we are in a very good location.Â There are many ports being developed along the shorelines of Oman, they serve us as well as neighboring countries.Â OmanÂ alsoÂ has a sophisticated banking system. As a result, finance and loans are available for new projects. The capital market systems also allows for investors to generateÂ more opportunities to raise funds through IPOs and bonds. Oman alsoÂ hasÂ highly sophisticated consumer trends. This means that we haveÂ modern packagingÂ and processingÂ which appeals to consumers. WeÂ alsoÂ have a veryÂ good quality assurance program, which helps market Omani products worldwide.Â ManyÂ retailers worldwide are asking for Omani products becauseÂ of their high quality. OmaniÂ productsÂ are well known for meeting best qualityÂ and are being demanded by global and local markets.
How are consumer trends and consumer behavior changing? In which ways are consumers becoming more sophisticated?
AL SHANFARI: The issues that todayâ€™s new generation is facing have to do with presentation,Â appearance, and quality.Â These are some of the aspects of sophistication that need to be addressed by producers. Once you understand the psychology of your consumers andÂ respect their choices,Â you willÂ thenÂ be able to addressÂ their needsÂ through proper presentation and packaging style and techniques.Â We are also experiencing a change in consumer behavior. Consumers are now becoming more connected to global trends, which means that we are having a global consumer. Therefore, it is important to understandÂ that consumer behaviorÂ 30 or 10 years agoÂ is not the same as today. We haveÂ aÂ new generationÂ that seesÂ products fromÂ a different perspective. There is a lot of design andÂ artworkÂ that goes into the appearance of the product.Â Nowadays, if you go to theÂ retail stores, supermarkets,Â or department stores,Â you will see the same products that areÂ in Europe.Â ThisÂ meansÂ thatÂ the trend is spreading all over and weÂ now have global consumers that can acquire similar products worldwide.Â However,Â the local consumerÂ will be looking for certain productsÂ likeÂ in the case of halal.Â This regionâ€™s consumers areÂ sensitiveÂ to the issue of halal products. As a result,Â we have another dimensionÂ andÂ market that providesÂ furtherÂ investment opportunities, the ability to combine between cultural value system, consumer behavior and marketing communication will give product developers a better edge in this very sophisticated and complex business environment any where in the world.
Which traditional and non-traditional markets are you currently exporting to? How do you see this evolving over the next 2-5 years?
AL SHANFARI: The GCCÂ is a traditional marketÂ for us. There are new markets opening up;Â forÂ example places like Egypt, Iraq, and China. Companies must have the proper understanding of the needs and consumer trends of these markets. I think the sky is the limit.Â I believe once you have the full capabilities and skills to adjustÂ toÂ the needs of these different markets, you will be able to find your niche there.
GCCÂ countriesÂ import roughly 90% of their food requirements andÂ the value ofÂ OmaniÂ food imports is expected to reach about $4.8bn by 2020. What actions are currently being taken to improve self-sufficiency and food security in Oman?
AL SHANFARI: It is important to understand thatÂ there are other dimensions toÂ food security than just producing food via cultivation. Food security has to do with theÂ processingÂ ofÂ food,Â storage of food, logistics,Â and transportation. If we understand the other elementsÂ behindÂ food security thenÂ Oman can play a major role as a food-processing hub. Which means we can provideÂ food securityÂ forÂ the entire region. I believe that we should use water more wisely.Â For example, it takes roughly 12 liters of water to produce one chicken. Contrary to this,Â it takes around 3,000 liters of water to produce 1 kilo of wheat. We need to look at the valueÂ of water and try to use it in a more sustainable way. Water is very much a scarceÂ commodity.Â We need to become more efficient with our water usage and develop technology driven and water efficient projects such as hydroponics. Oman canÂ alsoÂ work moreÂ towardsÂ developing and implementingÂ green technology. We need toÂ promote the idea of usingÂ limited waterÂ in orderÂ to produceÂ maximumÂ amount ofÂ food. WeÂ haveÂ to understand how to utilize water more efficiently and I think Oman is in aÂ greatÂ position to doÂ so.
I believe that we should use water more wisely. For example, it takes roughly 12 liters of water to produce one chicken. Contrary to this, it takes around 3,000 liters of water to produce 1 kilo of wheat. We need to look at the value of water and try to use it in a more sustainable way.
GCC food retail prices have risen every year over the past decade. How has food inflation affected consumer demand here in Oman? How do you see this evolving over the long term?
AL SHANFARI: Presently, thereÂ is aÂ consumerÂ shift towardsÂ less expensive food.Â For example,Â consumer trends may shift towards moreÂ abundantÂ andÂ less expensive food.Â Consumers are starting to purchase less red meat and more white meat such as chicken.Â It must be noted that there are controls in place. The government helps control the costs of food. There areÂ monitoring mechanisms in place to ensure that there are not any unreasonable hikes in the price of food.Â The monitoring of food costs has become a major role for governments throughout the GCC. The government will not interfere withÂ how much you sell your product forÂ but ratherÂ willÂ make sure thatÂ food pricesÂ are in checkÂ givenÂ the costsÂ of raw materials and production. With regards to the long-term,Â governments throughout the GCC haveÂ already started programsÂ called land grabbing. They have begunÂ grabbing landsÂ throughout different parts of theÂ world. Some have started in Australia, the Philippines,Â Africa, and South America.Â This is one way of looking at food security. However, I believe that theÂ governments should notÂ expandÂ into sovereign lands that are owned by local communities.Â Instead,Â GCC governments shouldÂ invest in existing businesses.Â TheÂ GCC countries need to look at this situation fromÂ a market perspectiveÂ rather thanÂ aÂ sovereign perspective.Â They should invest in businesses instead of land assets thatÂ may not be productive in the future. Some of the major investments shouldÂ be done locally byÂ focusing onÂ food processing and bringing the raw materials here.Â You can processÂ it here and then create your own reserves.Â It is also important toÂ control the mechanismÂ of the market from a supply and demand angle.Â However, onceÂ there isÂ situation ofÂ high demandÂ andÂ less supply,Â then national foodÂ reserve programs should intervene and provide stability to the market.
How are regional brands such asÂ Aâ€™SaffaÂ andÂ KhayratÂ perceived in the market over international brands? How has this progressed over time?
AL SHANFARI:Â Local brandsÂ are considered to be premier products here andÂ in the region.Â Loyalty always lies withÂ the local brands.Â As a result, we do not have any difficulties in marketing new products. YourÂ localÂ brands will not suffer as long as you understand the needs ofÂ your consumers.Â It is important to continue your R&D in order toÂ see the currentÂ trends and match the continuous evolving trendsÂ of new generations. You need to treat your consumer as the most important asset that need your full attention and care.