BACKGROUND

The food industry has been facing strong influences in the UAE and KSA markets for a year due to the economic crisis, advertising opportunities and lately due to the month of Ramadan and changes in consumer habits.

Across the Arab Media markets, ‘food, beverages & tobacco’ increased their ad spend by 47%, between 2008 and 2009, according to PARC. Television attracted FMCG, food & beverages and Telecommunication marketers, while newspapers attracted the real estate and government marketers.

The increase in advertising can be directly attributed to the fall in advertising costs, due to the fall in demand for advertising by the real estate developers, heavily affected by the economic decline.

All mentions of food from UAE and KSA markets were monitored in the month of August, to gain a snapshot of what the topics are concerning this industry in the same timeframe we observed the media performance of 3 foodstuff companies; Nestle, Unliver and Kraft.

Nestle, Unilver and Kraft’s media performance in August 2009 was monitored to note down their messages, share of voice, coverage size, impressions, reputation drivers, PR Influence and ad values.

FOOD IN THE MEDIA

Mentions of food in the UAE and KSA media in August 2009 varied in topics. In the UAE, much talk was on Ajman, RAK and Fujeirah authorities tightening on food safety & hygiene regulations with the UAE’s Ministry of Economy’s efforts to maintain food prices in Ramadan.

Dubai Municipality launched ‘Safe Kitchen Initiative’, while at least 31 Dubai restaurants were penalized for violating regulations on food safety & hygiene. The demand for food stuff increases in Ramadan in both the UAE and KSA markets. Saudi food imports grew by 25% in 2009.

FACETS OF COVERAGE

Unilever achieved the highest amount of coverage of 46 followed by Nestle (31) and Kraft (24) throughout August 2009. While Unilever led in all other categories, such as ad values, impressions and coverage size, it was also the only one to achieve magazine coverage in the monitored period.

Interesting to note that despite Unilever’s lead, Nestle was almost neck-to-neck with Unilever in terms of newspapers’ impressions and coverage size.

Surprisingly it was Unilever that wasn’t diversified in terms of language penetration, with the entirety of its coverage falling in English publications. Nestle achieved 3 Arabic mentions compared to 38 English mentions, while Kraft achieved 2 Arabic mentions compared to 22 English mentions.

The majority of the 3 companies’ coverages came from UAE publications with very little coverage from the KSA market. The coverage for all 3 companies was split between Business publications and News & Politics publications at a ratio of 3.3:6.6.

All 3 companies diversified their clipping types, with Nestle in the lead, followed by Unilever and finally Kraft. With an exception of 2 magazine clippings for Unilever, all of the coverage was out of newspapers only.

CONTENT ANALYSIS

Unilever’s coverage was primarily on its New York stock exchange share prices’ movements. It has experienced a number of days where its shares saw increases, and others where its shares plummeted. The bid to buy Cadbury’s shares were compared to Unilever’s offer to Bestfods in 2000. Unilever’s team beats Etihad Airways’ in Abu Dhabi Cricket Council Ramadan Tournament.

Five out of 48 mentions were latent (indirect), while 43 were manifest (direct) mentions. 39 contained positive reputation drivers while 25 were press releases for Unilever in the month of August 2009.

Nestle’s coverage was on it being one of the possible bidders for Cadbury’s shares, on inaugurating the Chocolate Center of Excellence, on imposing a cap on executives’ salaries and on its fierce competition with Kraft in North America. Its mentions also included its China sales to increase by 20%, on its Nutritionist’s saying that coffee has benefits in response to drop in consumption in Ramadan and finally on Nestle being asked to buy its sugar overseas due to high demand and low supply.

All 31 mentions were manifest (direct), while 27 of them were press releases, constituting a PR Influence of 87%. Nestle also achieved 29 positive reputation drivers throughout the month of August.

Kraf’s mentions were on shifting its Dubai office to Jafza, as well as on Kraft’s beginning in Chicago in 1908. Kraft also reported operating income increase of 7.6% from last year. However, the vast majority of Kraft’s mentions in August 2009 were on its bid to buy Cadbury’s shares which remains unsuccessful.

Twenty two mentions were manifest, while only 12 were press releases, constituting a PR influence of 50%, which is expected from the news on Cadbury’s shares. Kraft also achieved 16 positive reputation drivers.

CONCLUSION

The food industry in the UAE and KSA namely and in the Pan Arab region as a whole is experiencing a number of issues, including the increase in raw material prices such as sugar, which forces them to buy their sugar overseas. Ramadan plays a big role in the increase and decrease in demand of certain food items. While the demand for Vimto shoots up in Ramadan, demand for coffee plummets. Local foodstuff products add to an already fierce competition in the food industry.

In terms of opportunities, the food industry has also reaped benefits from the drop in TV advertising costs and has increased its TV ads between 2008 and 2009. Another opportunity is presented to Kraft with the merger news. However, such an opportunity can prove to be harmful if not utilized properly. An influx of news on Kraf’s unattractive offer and Cadbury’s refusal, does not help Kraf’s image. Kraft needs to penetrate the media with a positive angle at this bid.

Overall, the food industry enjoys an active PR program, relative to other industries. However, those companies would benefit from intensifying their PR work in the coming period to take advantage of the opportunities and overcome obstacles.