This brief can be cited as:
KAPITA. "Fast Moving Consumer Goods in Iraq: An Overview of Food, Beverages, and Dairy Products”. September 4, 2023. https://bit.ly/3P6s2IP
It is undisputed that importation is significant in the Iraqi economy as Iraq heavily depends on it to meet consumer market demand. It is especially true when it comes to food and beverage commodities of industrial use and household consumption.
This report addresses FMCG in Iraq through several economic indicators: food/beverage importation; state of national manufacturing; challenges and opportunities within the manufacturing scene; and retail stores and startups.
In 2021, the total importation reached $1.7 billion. This brief begins by covering three main categories: processed food, dairy products, and beverages. It provides comprehensive import data regarding their cost, quantities, and country of origin.
This brief overviews the manufacturing scene and points out the main laws hindering food industry growth. The absence of legal protection, such as the Products Protection Act and Consumer Protection Act, has significantly been in favor of international importation rather than in favor of the Iraqi private sector growth. Therefore, We address the absence of these laws and examine their negative implication on the national food production industry.
Regarding the food and beverage industry, there is a total of 10495 and 117 food and beverage manufacturing establishments across Iraq and KRG, respectively. The food industry is the most common one due to the fact that it ranks number one in terms of the number of small and medium-sized production establishments and second regarding the large sized-production establishments.
Several challenges and opportunities are associated with this sector: the dairy, processed, and beverage industries. For example, local dairy production still runs on the traditional manual processes, which is an aspect we explore in terms of challenges to overcome and opportunities for potential growth.
Halfway through, we map the retail stores and highlight the significant transition of retail stores over the past years into chain markets and hypermarkets, which have gained popularity among Iraqi customers due to the availability of a broader selection of products and convenient shopping experiences.
This brief also points out the tendency to incorporate technology and online tools into the new Iraqi-based startups and SMEs that are specialized in food production to attract Iraqi customers and shift attention toward local production rather than imported commodities.
We conclude with a set of recommendations based on objective analysis and observation of the current situation of FMCG manufacturing in Iraq with an aim of overcoming these obstacles and ensuring further development.