Market Overview - Morocco

April 2017

Contents

• Executive summary
• Production
• Trade
• Consumer foodservice
• Retail sales
• For more information
• Resources

• Canadian dollar (C$)
• United States dollar (US$)

Executive summary

The Kingdom of Morocco is located in the northwest corner of Africa, and at its closest point, it is less than 15 kilometres away from Spain. With a population of 35.0 million people, Morocco was the 10th largest economy in the Middle East and North Africa (MENA) region, in 2016. Morocco is considered a developing country by international standards.

Morocco had a gross domestic product (GDP) of US$104.1 billion in 2016, this is expected to grow by 5.3% in 2017. Morocco is forecast to see some sustained economic progress over the short to medium term with a 5.7% compound annual growth rate by 2020 and beyond, according to Euromonitor.

This growth is largely stimulated by domestic demand, and Morocco is on track to see continued improvements in its economic performance due to a combination of government policy measures to enhance the business climate, focused expansion of middle class and improvements in competitiveness.

According to Euromonitor, Moroccan consumers have a significantly lower level of discretionary spending compared to the global average, although it is slightly higher than some of their regional counterparts. Consumer expenditure will see healthy growth through to 2030, creating more opportunities for providers of agri-food and seafood products; especially with the strongest spending expected to be in hotels and catering services, on the back of rising tourist arrivals and the growing trend for dining out among affluent Moroccans.

Production

Morocco is extremely dependant of its domestic agricultural sector as it accounts for 19% of Morocco's GDP (depending on the harvest) and employs about 40% of the country's workforce. Over 90% of the country's agriculture is rain dependant and thus this output varies greatly from year to year.

Moroccan agricultural production consists mainly of wheat, sugar beet, orange, tomatoes, potatoes, olives, and olive oil. However, Morocco produces enough food for domestic consumption except for grains, sugar, coffee and tea. More than 40% of Morocco's consumption of grains is imported. Morocco is a net exporter of fish as well as fruits and vegetables. High quality agricultural products are usually exported to Europe.

Trade

Morocco agriculture is extremely dependant on rainfalls and thus its output could fluctuate drastically from year to year. Consequently, Morocco is a net importer of agri-food products. In 2015, Morocco's agri-food and seafood trade deficit was a mere C$9 million with imports valued at C$5.73 billion, and C$5.72 billion in exports, however Morocco may experience a larger deficit in 2016 according preliminary data because of the severe drought that the country experienced in 2015/2016.

Morocco's top agri-food and seafood imports in 2015 were wheat, corn, soybeans oil, cane sugar, durum wheat, oilcake, and green tea. Key supplying countries were France, Brazil, Argentina, the United States, Germany and Canada. Canada was Morocco's sixth largest supplier of agri-food and seafood products in 2015, with a 6.3% share.

Canada ranked as the 19th destination for Moroccan agri-food and seafood products in 2015. Canada import's mainly citrus fruit from Morocco, accounting for 67.5% of all agri-food and seafood imports, and totalling C$55.8 million in 2015. Prepared octopus and olives are also other important import products for Canada; their imports totalled C$5.2 and C$5.1 million respectively.

Canada's agri-food and seafood exports to Morocco were valued at C$358.9 million in 2015. (C$292.2 as of October 2016). Top exports were durum wheat (C$329.6 million), frozen shrimp and prawns (C$8.9 million) , frozen cold water shrimp (C$7.8 million), dried shelled lentils (C$5.8 million) and dried peas (C$2.1 million). Canada registered an agri-food and seafood trade surplus of C$275.9 million with Morocco.

Consumer foodservice

Moroccan lifestyle and consumption trends have changed significantly in recent years, with the increasingly hectic pace of modern life fuelling demand for convenience. As a result, many consumers are ordering ready-to-eat meals from consumer foodservice outlets during lunch, while they might rely on processed foods bought from retailers when eating at home.

According to Euromonitor, in 2015, consumer expenditure per capita amounted to US$2,002. This amount is expected to increase by 3.5% in 2016. Spending on hotels and catering will be the fastest-growing consumer category. It is forecast that in the period 2016 to 2030, total consumer expenditure will grow at an average annual rate of 5.7%.

Retail sales

Several factors are influencing the ever-changing retail sector in Morocco. Shifting consumer lifestyles, particularly a high rate of population growth and rapid urbanization, combined with the rise of disposable income. This in part explains the growth of the packaged food segment and the multiplication of modern grocery distributors in Morocco.

Packaged food sales increased by a compounded annual growth rate (CAGR) of 5.2% over the period of 2011 to 2016 with further increases of 6.8% forecasted to 2021. Within this category, the best performing segment was ready meals with a CAGR of 13.7% over the same period. This reinforces the Euromonitor observations that consumers in Morocco are looking for convenient products.

The retail distribution of food in Morocco varies across income levels. Superstores generally cater to the more affluent consumers. Traditional neighbourhood stores cater to the lower income population who tends to buy fewer items on a frequent basis. Weekly rural farmer's markets still persist and cater to rural populations. Higher income earners tend to buy more processed and packaged foods on a frequent basis.

Euromonitor notes that Moroccans are gradually shifting towards modern retail channels and embracing technology. Internet retailing packaged food sales are expected to continue increasing. The fact that the number of women joining the workforce is continuously rising means that a growing number of female consumers are looking for practical solutions to make life easier.

There has been a boom in the level of health awareness among Moroccan consumers in recent years. The demand for healthy alternatives is rapidly spreading including the use of stevia in sweet recipes to replace sugar or taking daily amounts of coconut oil to cleanse the digestive system. Because of these trends, pharmacies have started to import and offer a wide range of different supplements, which have proven popular among Moroccans and continue to reinforce the growing health and wellness trend.

Convenience-oriented stores, in particular, are changing the landscape of the Moroccan market. While shopping at convenience stores, discounters and forecourt retailers is relatively limited, the traditional grocery retailers are currently losing ground to supermarkets, and hypermarkets and neighbourhood modern grocery stores which feature smaller surfaces, limited product assortments, and a focus on convenience items. There has been a notable trend towards this type of retail channel because of Moroccans' busy lifestyles. The fact that convenience stores have extended hours of operation is also certainly a factor. The demand for convenience, health and wellness, as well as indulgence, will be the main consumer trends that are likely to impact retailing in the years to come in groceries.

For more information

International Trade Commissioners can provide Canadian industry with on-the-ground expertise regarding market potential, current conditions and local business contacts, and are an excellent point of contact for export advice.

• Overview of Trade Commissioner Services in Morocco
• Find a Trade Commissioner

For additional intelligence on this and other markets, the complete library of Global Analysis reports can be found under Statistics and Market Information at the following link, arranged by sector and region of interest: Agri-Food Trade Services for Exporters.

For additional information on Gulfood 2017, please contact:

Ben Berry, Deputy Director
Trade Show Strategy and Delivery
Agriculture and Agri-Food Canada
ben.berry@canada.ca

Resources

• Consumer Lifestyles in Morocco - Euromonitor International – 2016
• Package Food in Morocco - Euromonitor International -2016
• Agricultural Production – Morocco - Food and Agriculture Organization – Statistics Division (FAOSTAT)- 2017
• Import and export statistics – Morocco - Global Trade Tracker- 2017
• World Bank - 2017

Market Overview - Morocco
Global Analysis Report
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