MEED | 02 April 2009
Karen Thomas
The Kuwait-based firm aims to build on its base as the leading food company in the Middle East.
Structure
Headquartered in Kuwait City, the Americana Group is owned by the Al-Kharafi family, which has a global portfolio of interests spanning oil and gas, finance, telecoms, real estate and food. The group made global headlines earlier this year when it was linked first with talks to buy Liverpool Football Club, and then to a possible bid for French football club Paris Saint-Germain.
Americana chairman Marzouk al-Kharafi is the son of Nasser al-Kharafi, president of Mohammed Abdulmohsin al-Kharafi & Sons Group. Last year, Forbes magazine ranked Nasser al-Kharafi and his family 46th on its annual rich list, with a net worth of $14bn. Marzouk's two brothers, Badr and Faisal, hold senior positions in companies within the Kharafi empire, while Marzouk is deputy president of the Al-Kharafi group of companies.
Company snapshotDate established: 1964
Main business sectors: Food retail, marketing and manufacturingMain business regions: Kuwait, Egypt and worldwide
Chief executive officer: Marzouk al-Kharafi
Americana Group is listed on the Kuwait Stock Exchange, with a market capitalisation of KD406.8m ($1.4bn). Al-Khair National for Stocks & Real Estate Company, which is owned by the Al-Kharafi family, is the majority shareholder in Americana, with a 64.79 per cent stake.
Americana Group has two main operating divisions: restaurants and consumer foods. The main company in the restaurants division, which has 1,000 outlets, is Kuwait Food Company, the franchise giant that operates in Kuwait and the UAE. Other food interests include Al-Ahlia Restaurants in Saudi Arabia, Qatar Food Company in Qatar, Bahrain & Kuwait Restaurant Company in Manama, and Caspian International Restaurants in Kazakhstan.
Americana is the regional franchise partner for global food brands such as Pizza Hut, Kentucky Fried Chicken (KFC), Taco Bell, Costa Coffee, Hardee's, Baskin-Robbins, TGI Friday's and Krispy Kreme doughnuts. It became the first company in the region to offer home-delivery meals in partnership with KFC. Other brands in the division include Samadi, Fish Market, Chicken Tikka and Grand Cafe.
The consumer foods division comprises 13 food-processing companies based in Kuwait, Saudi Arabia and Egypt. These include Americana Meat, which opened its first meat-processing plant in Kuwait in 1972 and is now the largest meat-processing business in the Middle East, claiming a 45 per cent market share and producing 45,000 tonnes a year of meat products for Saudi Arabia and Kuwait.
The division's other manufacturing businesses are Americana Cake, Cairo Poultry Processing Company (Koki), which makes processed chicken nuggets, and Egyptian Canning Company. The International Agricultural Development Company farms 6,000 acres in Egypt to produce potatoes that are processed into frozen chips. Americana also has a joint venture in Egypt with Heinz, launched in 1992, to produce ketchup and Americana branded products for the Middle East market.
Other brands within the consumer foods division include California Garden tinned goods, Americana Olives, Green Land dairy goods, Gulfa bottled water, Beefy burgers and sausages, and Senyorita biscuits and crisps. Americana has 18 factories in five countries, and sells its processed foods to more than 50 countries around the world.
Operations
The Americana Group's roots lie in a small trading company launched in 1962 that opened the Middle East's first branch of the Wimpy fast-food chain in 1970. Today, a two-pronged strategy, based on franchise partnerships with global food and beverage brand owners on the one hand and investment in food-processing operations on the other, has turned Americana into one of the Middle East's largest food companies.
The GCC imports 80 per cent of its food, valued at $20bn in 2007, according to the Arab Organisation for Agricultural Development. Positioning itself in Egypt, a low-cost labour market with arable land along the Nile, Americana's dairy, livestock and arable farms have enabled the company to source raw material for processing and dominate regional demand for convenience and fast foods.
Meanwhile, Americana's partnerships with global fast-food companies pre-empted the surge in regional demand for fast food as Western eating habits have taken hold across the Arabian Gulf.
Ambitions
The company aims to maintain and build on its market position. In February this year, the group's Kuwait Food Company subsidiary signed a franchise deal with the UK's San Carlo Group to launch its Signor Sassi restaurant chain across the region. The deal will involve Americana opening 22 regional outlets of the London-based Italian restaurant chain, starting in Kuwait City, Cairo, Riyadh and Dubai.
Internationally, Americana and its franchise partner, CKE Restaurants, parent company of the Hardee's sandwich chain, announced in December that it will build 12 Carl's Jr restaurants in Kazakhstan by 2013.
The global downturn could present new opportunities for the Al-Kharafi empire. The company continues to diversify and target new markets in East Africa and Central Asia. Hints of future target markets come from the wider Al-Kharafi company, which is expanding aggressively into Africa.
MEED assessment
Just as Kuwait's economy has boomed since 2003, with five years of soaring oil prices, the Americana group has flourished, moving from franchise partnerships and manufacturing into food services and distribution. However, there are signs that retrenchment may be on the way. In February, Americana Group announced a 36 per cent drop in net profits for 2008 to KD35.2m ($119.3m), from KD55m in 2007.
Announcing the latest results in March, Marzouk al-Kharafi spoke of a shift in consumer demand to value-for-money brands in response to the downturn, a change to which the company is well placed to react as the franchise partner for a wide range of food brands.