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The Turkish food industry: trends, topics and market opportunities

Turkey continues to provide large trading volumes in its food sector – great news for foreign investors looking to grab a bite of this growing economy’s food and beverage sector. In 2014, for example, Turkey’s food & beverage exports totalled $11.1 billion, with food imports coming to $5.6 billion.
 
18.9% of Turkey’s GDP is taken up by the food and beverage industry. Why? Turkey is the ideal location for agriculture production. The nation is the seventh largest agricultural producer in the world, for a wide variety of products. Turkey is also a heavy importer to cater to a huge internal market of 76 million people, and an important hub for producers to reach the Middle Eastern and North African markets around it.
 
With this in mind, what are the specifics of the Turkish food industry that potential suppliers need to know?
 

Turks expand their taste horizons

 
As household incomes grow and more international food players penetrate the Turkish market, the culinary tastes of young urban Turks are changing dramatically. This opens up a potentially enormous new market for suppliers of foods not historically popular in Turkey.
 
"In the last five years Turkey has shown a significant hunger for imported products, and this trend is mainly driven by urbanisation," Euromonitor International nutrition analyst Dimitrious Dimakakkos told foodnavigator.com. "This has resulted in the traditional food markets being substituted by modern grocery retailers, and multinational branded products (have) found more space on the shelves of supermarkets." 
 
Many companies are benefiting directly from this desire to try out products supplied from beyond Turkey’s borders. Turkish imports of mineral water, for example, have been growing steadily since 2010 (from $34.3 million to $67.2 million, according to statistics collected by Harvard University’s Center for International Development). At previous editions of the WorldFood Istanbul food and drink exhibition, suppliers from Luxembourg (CMW) and France (808 Mineral Water) both had successful shows, making contacts with distributors looking to put their products on Turkish shelves.
 
Another growth area – and a very surprising one – is coffee. Caffe Carraro from Italy, SLN Coffee from India, and GR Coffee from Greece all reported making useful contacts at WorldFood Istanbul, and a look at the trade figures backs their optimism up. Imports of coffee into Turkey grew from $56 million in 2010 to $104 million in 2014, showing that even the Turkish national drink offers a promising niche for exporters.
 

Feuds and food bans

 
A key issue, in terms of the Turkish food industry, was the ban imposed by Russia on a number of important items for Turkish fruit, vegetable and poultry producers. As Russia is the seventh largest export market for Turkey, with 20% of this sourced from the food industry, the ban will likely result in a need for Turkish exporters to look further afield for new markets for their products.
 

Halal demand growing

 
The Halal food sector is often overlooked by non-Muslim supplier countries, but the sheer size of the market means that it should not be. The global Muslim market spent $1.3 billion on food in 2013, according to Thomson Reuters’ State of the Global Islamic Economy report, and this is forecast to reach over $2.5 billion by 2019. While exact estimates of how much of this consumption is Halal are difficult, because of differing reporting standards, this undoubtedly adds up to a huge market for suppliers specialising in Halal foodstuffs. Turkey, with 98% of its population identifying as Muslim, is responsible for $168 million of this consumption.
 
You might expect Muslim-majority countries to meet most of this demand, but the statistics say otherwise. Of all the meat and live animals imported by the 57 member countries of the Organisation of Islamic Cooperation (OIC), a huge 85% is supplied by non-OIC countries. 
 
Not only is Turkey a large Halal market itself, it borders even larger ones – and itself exports over half a billion USD to other Islamic markets. Turkey’s importance for international Halal suppliers, both as a market itself and a gateway to the Middle East, is only going to grow.
 

Europe brings beef to Turkey

 
One country whose farmers and suppliers are enjoying a share of the Turkish food market is Poland. After virtually no imports in 2014, the Turkish meat and milk board invited bids to supply 10,000 tonnes of beef in August 2015 to meet demand during the Muslim festival of Eid al-Adha, reported ADHB Beef and Lamb, with all the winning bids from Polish companies. 
 
Other countries with a strong presence in the Turkish beef market include Bosnia, who sent over $4 million of fresh beef the short distance southeast in 2014 and Germany ($1.8 million of frozen beef exports in the same year). Brazil and India also did good business with Turkish buyers that year, selling $5.9 million and $3.8 million of frozen beef to the country in 2014.
 

The future of the food industry in Turkey

 
So what is next for Turkey? The food retail industry is predicted to grow 8% during the period of 2015-2018, and imports should not be overlooked in this mix. Niche products, growing in popularity among Turkish consumers, are examples of how importers can take advantage of the opportunities Turkey is offering.  A young population – over 50% are aged under 30 – and a growing middle class (more likely to travel and encounter new foods to try back home) suggests a taste for international flavours that will increase in the coming years.
 
Also, thanks to its geographic position between Europe, Asia, the Middle East and North Africa, Turkey is an ideal hub for food imports, exports and transportation – it can easily trade with over 50 countries locally, but also has a truly global reach. 
 
As long as its economy continues to grow, so too will Turkey’s food industry strengthen as a place for international firms to do business.

Image: © Senol Demir Via Flickr

 

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