Required Report - public distribution

**Date:** 1/19/2005

**GAIN Report Number:** MO5003

MO5003

**Morocco**

**HRI Food Service Sector**

**Report**

**2005**

**Approved by:**

![](media/image1.wmf)Michael J. Fay

U.S. Embassy, Rabat, Morocco

**Prepared by:**

Aziz Abdelali

**Report Highlights:**

The Moroccan Hotel, Restaurant, and Institutional (HRI) food business
offers an increasing number of opportunities to U.S. food suppliers
especially under the newly signed Morocco-U.S. FTA. The HRI sector is
likely to grow dramatically in response to various government policies
aimed to increase the number of tourists to 10 millions by the year
2010.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Rabat \[MO1\]

\[MO\]

# 

# 

[**Table of Contents** Error! Bookmark not
defined.](#__RefHeading___Toc93485446)

[Overview 3](#overview)

[Tourism Sector in Morocco 3](#tourism-sector-in-morocco)

[The Hotels Sector 3](#the-hotels-sector)

[The Restaurant Sector 4](#the-restaurant-sector)

[Restaurant Food buying Procedure 5](#restaurant-food-buying-procedure)

[Classical Fast Food outlets 6](#local-fast-food-outlets)

[Catering Sector 6](#catering-sector)

[Airline Catering 6](#airline-catering)

[Opportunities Opened by FTA 8](#__RefHeading___Toc93485455)

[Promotional Events for U.S. Food Exporters
10](#promotional-events-for-u.s.-food-exporters)

# 

#  

# Overview

Local importers and distributors are essential today for U.S. food
products to reach hotels, restaurants, and caterers in Morocco. The HRI
sector is developing rapidly to respond to the demand of a modernizing
society and as a result of government goals to boost tourism in Morocco.
Hotels and large caterers are increasingly adapting international
quality standards (ISO, HACCP), which demand consistent quality and
controlled distribution chains that the local suppliers are not always
able to meet.

# Tourism Sector in Morocco

Morocco receives each year over 2.5 million foreign tourists mostly from
Europe brings in some \$2.0 billion to the local economy. In addition,
some 1.6 million Moroccan working aboard (Europe) visit the country once
a year during their vacation time (June-August) boosting consumption in
hotels and restaurants. Europeans account for over 80 percent of
Morocco's tourists and Europe (France, Germany, Italy, U.K.) is expected
to continue to be the major tourist supplier in spite of the increase in
number of tourists from other origins.

The government of Morocco has launched a plan to reach 10 million
tourists a year by 2010 and several sites are being parceled out to the
private sector for construction of new hotels and tourists resorts
throughout the country.

# The Hotels Sector

Morocco has some 632 classified hotels and tourist villages of which
over half are ranked three star or better (medium to upscale). Nine out
of ten foreign tourists stay in the medium to upscale hotels where they
are likely to consume at least some imported food products. Medium and
upscale hotels (3,4, 5 stars and luxury hotels) are located mainly in
major Moroccan cities (Agadir, Marrakech, Meknes, Fes, Casablanca,
Rabat, and Tanger) were food distribution has modernized significantly
over recent years and where regular food importers and distributors have
been operating on a daily basis.

+-------------------------------------+--------------------------------+
| **Advantages**                      | ### Challenges                 |
+-------------------------------------+--------------------------------+
| U.S. suppliers have immediate       | Long shipping periods between  |
| preferential access on many         | Morocco and the USA. No direct |
| commodities including on Hilton     | shipping lines. Transit by     |
| meat, standard meat, poultry, and   | Europe is necessary.           |
| apples.                             |                                |
+-------------------------------------+--------------------------------+
| Importers and distributors supply   | The quantities involved can be |
| HRI as well as supermarkets and     | still relatively small.        |
| traditional wholesalers.            |                                |
+-------------------------------------+--------------------------------+
| Tourism industry is likely to       | Buyers are very price          |
| continue to grow in the future as   | sensitive.                     |
| the government is giving it full    |                                |
| support.                            |                                |
+-------------------------------------+--------------------------------+
| Hotel chains and upscale hotels are | Importers have been            |
| following high quality standards,   | traditionally dealing with     |
| and demand on quality.              | European suppliers and visit   |
|                                     | European shows regularly.      |
+-------------------------------------+--------------------------------+
| Good reputation of American         |                                |
| products in general.                |                                |
+-------------------------------------+--------------------------------+
| Growing middle class in Morocco     |                                |
| that supports the tourism industry  |                                |
| even in economic downturns.         |                                |
+-------------------------------------+--------------------------------+

**Hotel Food Buying Procedure**

Hotels in Morocco are not involved in direct importing because of the
small volume involved. Even the largest chain (19 hotels) is not
importing directly. Local importers and distributors play a major role
in importing, promoting, and distributing food products in the hotel and
restaurant business. U.S. exporters should go through established
importers and distributors who have their own sales force and
distribution network, a wide base of consumers (including non hotels and
restaurants), and can handle relatively small quantities by
consolidating small orders.

Most hotels make purchase decisions at the hotel level. Some chains
require that local food suppliers be approved by headquarter office
before they can start supplying individual hotels. Although the number
of suppliers that hotels deal with might vary, it is typically a
relatively small number and some importers are supplying most key hotels
and restaurants in Morocco. In addition, hotels buy directly from
wholesalers (including from a modern wholesale cash and carry chain)
especially when it comes to products for which they need small volume.
Some traditional wholesalers are providing financing (up to one month)
to some hotels and restaurants.

+-----------------------+---------------+-----------------------------+
| Hotel Category        | Identified    | Comments                    |
|                       | Hotels        |                             |
+-----------------------+---------------+-----------------------------+
| Five Star:            | 41            | Mostly in major Moroccan    |
|                       |               | cities such as Marrakech    |
| Minimum of 2          |               | (11), Agadir (7),           |
| restaurants. With at  |               | Casablanca (5), Fes (6),    |
| least one Moroccan    |               | Tanger (2), Rabat (2), and  |
| restaurant. A snack   |               | all others (8). Higher      |
| bar and 24h room      |               | proportion of imported food |
| service.              |               | is being served at this     |
|                       |               | group of hotels.            |
+-----------------------+---------------+-----------------------------+
| Four Star:            | 98            | Marrakech (13) Agadir (13), |
|                       |               | Casablanca (13), Tanger     |
| Minimum of one        |               | (6), Fes (6), Ouarzazate    |
| restaurant, one snack |               | (6) and all others (38).    |
| bar, and 24h room     |               | Serve mostly buffets for    |
| service.              |               | large groups of tourists    |
|                       |               | and Moroccan tourists.      |
+-----------------------+---------------+-----------------------------+
| Three Star            | 131           | Marrakech (17), Agadir (8), |
|                       |               | Casablanca (9), Tanger      |
|                       |               | (10), Fes (5), Rabat (10),  |
|                       |               | Ouarzazate (5), Nador (7),  |
|                       |               | Meknes (3), and all others  |
|                       |               | (58)                        |
+-----------------------+---------------+-----------------------------+
| Tourist Villages      | 11            | Located mostly in Agadir    |
|                       |               | (5) and Marrakech (5), and  |
|                       |               | Tanger (1). Serve mostly    |
|                       |               | buffets for large groups of |
|                       |               | tourists.                   |
+-----------------------+---------------+-----------------------------+

###### Breakdown of hotels and resorts in Morocco by type and location

Source: Ministry of Tourism.

# 

# The Restaurant Sector

The Moroccan restaurant sector is diversified and offers great
opportunity for sale of U.S. food products especially under the newly
signed US-Morocco Free Trade Agreement. Except for restaurants open
under foreign fast food franchise (Pizza Hut, McDonalds, etc.), there
are no restaurant chains in Morocco and although some might belong to
the same owner they are managed separately. Finally, most officially
graded restaurants in Morocco are owned by locals or by Europeans based
in Morocco.

+---------------+------------------+--------------+-------------------+
| **Category:   | **Type of Food   | **Type of    | **Comments**      |
| Location**    | Served**         | customers**  |                   |
+---------------+------------------+--------------+-------------------+
| Officially    | International    | Medium to    | Number of seat    |
| Graded        | (103), Moroccan  | high class   | varies            |
| Restaurants:  | (55), French     | Moroccans    | considerably (20  |
|               | (17)             | and          | to few hundreds   |
| 246           |                  | tourists.    | for Moroccan show |
| Identified:   | Italian (14),    | Business     | restaurants).     |
| Marrakech     | Oriental (12),   | community    |                   |
| (46),         | Seafood (22),    | for          | Best prospects:   |
| Casablanca    | others (23)      | i            | Meat and poultry, |
| (43), FES     |                  | nternational | sauces, canned    |
| (24), Rabat   |                  | and western  | food, seafood,    |
| (23), Agadir  |                  | style        | snack food. Also  |
| (22), Tanger  |                  | restaurant   | for Moroccan      |
| (45), Meknes  |                  | especially   | restaurants:      |
| (12), other   |                  | in           | dried fruits and  |
| cities (31)   |                  | Casablanca   | nuts and spices.  |
|               |                  | and Rabat.   |                   |
+---------------+------------------+--------------+-------------------+
| **Fast food   | Chicken          | Typically    | Typically small   |
| r             | rotisseries      | used by      | shops. Might not  |
| estaurants:** |                  | Moroccans in | even have seated  |
|               | Burger Places    | urban areas. | places.           |
| Throughout    |                  |              |                   |
| Morocco       | Pizzerias        |              | Best prospects:   |
|               |                  |              | frozen French     |
|               | Seafood          |              | fries, frying     |
|               |                  |              | vegetable oil,    |
|               | Local food.      |              | poultry and       |
|               |                  |              | hamburger, cheese |
|               |                  |              | for pizza, and    |
|               |                  |              | canned products   |
+---------------+------------------+--------------+-------------------+
| **Franchise   | Mc Donald's (19  | Medium to    | Imports done      |
| Modern Fast   | outlets)         | upscale      | directly by       |
| Food**        |                  | Moroccans.   | franchise         |
|               | Pizza hut (17)   |              | headquarter       |
| Mostly in     |                  |              | offices in        |
| relatively    | Domino Pizza (3) |              | Morocco.          |
| high income   |                  |              |                   |
| cities:       | KFC (2)          |              | Best prospects:   |
| Casablanca,   |                  |              | Cheese for pizza, |
| Rabat,        |                  |              | poultry meat,     |
| Marrakech,    |                  |              | tomato sauce,     |
| Agadir, Fes,  |                  |              | hamburger meat,   |
| Meknes,       |                  |              | and chicken       |
| Kenitra       |                  |              | nuggets.          |
+---------------+------------------+--------------+-------------------+

# Restaurant Food buying Procedure

**Government Graded Restaurant**

Local importers and distributors are key in conveying imported products
to officially graded restaurant. It will be very difficult for any
restaurant to get involved directly in imports because of the small
volume involved. Established local importers have their own fleet of
salesman that visit regularly with these restaurants (and food
purchasing agents in hotels restaurant) and with the wholesalers where
these restaurants buy some of their food ingredients.

**Modern Fast Food Sector (Franchisee)**

Franchises import directly their standard products or contract local
manufacturers. They purchase relatively little from local importers and
distributors.

#  Local Fast Food outlets

Shops in this category procure their ingredients from local wholesalers
including the wholesale cash and carry supermarket that owns seven
outlets in Morocco.

# Catering Sector

There are relatively few large companies that supply food to
institutions (such as universities, schools, large corporation, banks,
etc.) and the two largest are *Eurest* and *SODEXO*. These two companies
are believed to account for over 80 percent of the estimated \$30
million market with *Eurest* being the leader in Morocco. The remaining
20 percent is shared among several small companies or caterers that are
relatively new to this market. This group of caterers buys a wide range
of grocery items including beef, lamb, poultry, canned fruit and
vegetables, spices, tomato concentrate, and pulses.

There is also a large number of caterers that are specialized in
preparing food for special celebrations (receptions, marriages
ceremonies, birth, etc.). In this group, there are few large caterers
that are active in most Moroccan cities and whenever there are large
celebrations through out the country. Most of these caterers are
requested to serve Moroccan meals, which boost the demand for specialty
products such as (lamb, beef, poultry, dried fruits and nuts, spices,
tea, coffee, and sugar) during the summer time (May-August) when the
festivities tend to concentrate. Increasingly, caterers in this category
are supplying more western type buffets, which increases the range of
ingredients they regularly use.

Going through local importers and distributors is essential to reach
this category of end-users. Most of the caterers, including the large
ones, buy their products either directly from the importers/distributors
or, if the quantities needed are too small, from wholesalers (including
modern wholesale cash and carry chain).

# Airline Catering

There is one major company in Morocco dealing with catering for local
and foreign airlines, *Royal Catering*. The company can import exempt
from duties when the products are to be used outside of Morocco's
customs territory. It also buys some of its ingredients from local
distributors.

**Moroccan Consumer Oriented Food Products Imports**

**(\$Million, calendar year 2003)**

+---------+----------------+------+---------+-----------+------------+
| []      | **2003         | **5  | **I     | **Key     | **Market   |
| {#__Ref | imports**      | ye   | mport** | Co        | attr       |
| Heading |                | ar** |         | nstraints | activeness |
| ___Toc9 | **Major Sub    |      | **Ta    | over      | for USA**  |
| 3485455 | Categories**   | **   | riffs** | Market    |            |
| .an     |                | Impo |         | Deve      |            |
| chor}** |                | rt** |         | lopment** |            |
| Product |                |      |         |           |            |
| Cat     |                | **   |         |           |            |
| egory** |                | Grow |         |           |            |
|         |                | th** |         |           |            |
+---------+----------------+------+---------+-----------+------------+
| Overall | Mostly from    | 14%  | Rel     | Geo       | Pr         |
| Imports | Europe         |      | atively | graphical | eferential |
|         | (France,       |      | high    | distance  | Access     |
|         | Germany, UK)   |      | (across | (Freight  | under FTA  |
|         |                |      | the     | Cost,     |            |
|         |                |      | board   | long      |            |
|         |                |      | average | delivery  |            |
|         |                |      | duties  | period).  |            |
|         |                |      | and     | Lack of   |            |
|         |                |      | taxes   | awareness |            |
|         |                |      | (80%)   | of US     |            |
|         |                |      |         | products. |            |
+---------+----------------+------+---------+-----------+------------+
| Dairy   | Butter (\$52)  | 16%  | 100%    | High      | Cheese for |
| P       |                |      |         | Duties.   | pizza will |
| roducts | Milk Powder    |      |         |           | be duty    |
|         | (\$21)         |      |         | Current   | free under |
| (       |                |      |         | demand    | FTA.       |
| \$91.5) | Cheese (\$13)  |      |         | mostly    |            |
|         |                |      |         | from      | Duties for |
|         | Whey (\$1)     |      |         | dairy     | other      |
|         |                |      |         | p         | Dairy      |
|         |                |      |         | rocessors | Products   |
|         |                |      |         | to make   | down over  |
|         |                |      |         | dairy     | 15 years   |
|         |                |      |         | de        |            |
|         |                |      |         | rivatives |            |
|         |                |      |         | (yogurt)  |            |
+---------+----------------+------+---------+-----------+------------+
| Pr      | Cereals and    | 16%  | 50 %    |           | Pr         |
| ocessed | Bakery         |      | customs |           | eferential |
| Food    | Products (\$5) |      | duties. |           | access     |
| (\$56)  |                |      |         |           | especially |
|         | Chocolate      |      |         |           | on the     |
|         | (\$9.5)        |      |         |           | medium and |
|         |                |      |         |           | long term. |
|         | Pasta (\$4)    |      |         |           |            |
|         |                |      |         |           |            |
|         | Confectionary  |      |         |           |            |
|         | (\$3.2)        |      |         |           |            |
|         |                |      |         |           |            |
|         | Sauces &       |      |         |           |            |
|         | Seasonings     |      |         |           |            |
|         | (\$1.5)        |      |         |           |            |
+---------+----------------+------+---------+-----------+------------+
| Fruits  | Dates (\$11    | 11%  |         |           | Duty Free  |
| (\$28)  | for Ramadan),  |      |         |           | Quota for  |
|         | Dried raisins  |      |         |           | fresh      |
|         | (\$2.5),       |      |         |           | apples     |
|         | Almonds        |      |         |           | (see FTA   |
|         | (\$1.5), Fresh |      |         |           | section).  |
|         | Apples (\$2),  |      |         |           |            |
|         | Juice (\$2.2), |      |         |           |            |
|         | Dried Prunes   |      |         |           |            |
|         | (\$.9)         |      |         |           |            |
+---------+----------------+------+---------+-----------+------------+
| Be      | Alcoholic      | 14%  | Al      | High      | Alcoholic  |
| verages | drinks (\$12)  |      | coholic | duties.   | drinks     |
| (       |                |      | (50%)   |           | will be    |
| \$24.4) | Wine (\$7.2),  |      |         | Lack of   | duty free  |
|         | Carbonated     |      | Wine    | knowledge | under FTA. |
|         | (\$1.7),       |      |         | of US     |            |
|         | Mineral Water  |      | Mineral | products. | Duties on  |
|         | (\$1)          |      | Water   |           | Mineral    |
|         |                |      | (50%)   | Stiff     | water and  |
|         |                |      |         | co        | wine are   |
|         |                |      |         | mpetition | down over  |
|         |                |      |         | from EU.  | 10 years   |
|         |                |      |         |           | period     |
+---------+----------------+------+---------+-----------+------------+
| Seafood | Frozen fish    |      |         |           | US will    |
| (\$19)  | (\$6)          |      |         |           | have       |
|         |                |      |         |           | pr         |
|         | Canned Tuna    |      |         |           | eferential |
|         | (\$2.8)        |      |         |           | access (   |
|         |                |      |         |           | duty free) |
|         | Smoked, Salted |      |         |           | for most   |
|         | Fish (\$2.7)   |      |         |           | seafood    |
|         |                |      |         |           | products.  |
+---------+----------------+------+---------+-----------+------------+
| **      | **2003         | **5  | **I     | **Key     | **Market   |
| Product | imports**      | ye   | mport** | Co        | attr       |
| Cat     |                | ar** |         | nstraints | activeness |
| egory** | **Major Sub    |      | **Ta    | over      | for USA**  |
|         | Categories**   | **   | riffs** | Market    |            |
|         |                | Impo |         | Deve      |            |
|         |                | rt** |         | lopment** |            |
|         |                |      |         |           |            |
|         |                | **   |         |           |            |
|         |                | Grow |         |           |            |
|         |                | th** |         |           |            |
+---------+----------------+------+---------+-----------+------------+
| Veg     | Canned         | 7%   |         |           | Potential  |
| etables | Vegetables     |      |         |           | for canned |
| (\$8.6) | (\$3.5)        |      |         |           | products   |
|         |                |      |         |           | (long      |
|         | Onions and     |      |         |           | shelf      |
|         | Similar        |      |         |           | life).     |
|         | (\$2.1)        |      |         |           |            |
|         |                |      |         |           |            |
|         | Processed      |      |         |           |            |
|         | Tomatoes       |      |         |           |            |
|         | (\$.6)         |      |         |           |            |
+---------+----------------+------+---------+-----------+------------+
| Meat    | Hamburger Meat |      | 275 %   |           | US has     |
| (\$4.3) | (\$.96),       |      | for     |           | tariff     |
|         | Chicken        |      | meat.   |           | rate quota |
|         | Nuggets        |      |         |           | for 1)     |
|         | (\$.23),       |      | 124 %   |           | high       |
|         | Turkey (\$.9), |      | for     |           | quality    |
|         | Canned Meat    |      | p       |           | beef for   |
|         | (\$1.4)        |      | oultry. |           | hotels and |
|         |                |      |         |           | r          |
|         |                |      | 60 %    |           | estaurants |
|         |                |      | for     |           | 2)         |
|         |                |      | chicken |           | standard   |
|         |                |      | n       |           | meat, 3)   |
|         |                |      | uggets. |           | whole      |
|         |                |      |         |           | chicken    |
|         |                |      | 50 %    |           | and 4)     |
|         |                |      | for     |           | chicken    |
|         |                |      | canned  |           | parts (see |
|         |                |      | meat    |           | FTA        |
|         |                |      | and     |           | section)   |
|         |                |      | ham     |           |            |
|         |                |      | burgers |           |            |
|         |                |      | meat.   |           |            |
+---------+----------------+------+---------+-----------+------------+

# Source: Official Moroccan Trade Data (Office des Changes)

# 

# 

# 

# Opportunities Opened by FTA

Under the recently signed FTA with Morocco, most U.S. products can enter
Morocco at preferential duties, especially in the medium ad long term.
For the short term, the U.S. secured quota for:

-   4,000 MT of USDA's "choice" or "prime" beef to be sold to upscale (4
    and 5) restaurant and government-approved restaurant. The quota will
    increase by 4 percent annually and the in-quota tariff, starting at
    45 percent ad valorem (instead of 260 percent) will be phased out in
    five years.

-   2,000 MT of Standard Quality Beef. After the fifth year of the
    agreement, this quota will increase by 2 percent a year. The
    in-quota tariff is 275 percent and will be reduced to zero over a 10
    years period.

-   4,000 MT of chicken legs and quarters. This quota will increase by
    200 MT a year. The in-quota tariff will be reduced by over 51
    percent on the first year (from the current 124 percent) and be
    phased out completely over a 9 years period.

-   1,250 MT of chicken and turkey whole birds. This quota will increase
    by 100 MT a year. Duties on the in quota tariff will be reduced by
    over 51 percent on the first year (from the current 124 percent) and
    be phased out completely over a 9 years period.

-   2,000 MT of apples to enter Morocco duty free starting on year 1 of
    the agreement. The quota is open from February through May of each
    year.

-   3000 MT of products of wheat and durum wheat. The in quota tariff is
    reduced by 75 percent on the first year and is expected to go down
    over a six year period starting year 4.

In addition, the U.S. will enjoy duty free access starting the first
year of the implementation for pizza cheese, pistachios, and soy sauce.
Gains from the FTA is more obvious for the medium and long term where
many key products will see their duties being phased out.

# Promotional Events for U.S. Food Exporters

The Office of the Agricultural Affairs at the American Embassy in Rabat
is organizing the 4^th^ Casablanca American Café on June 6,7,8 2005.
This US only food exhibition helps U.S. exporters to meet with key
importers and distributors in Morocco, Algeria, and Tunisia. For more
information about his event, please contact <AgRabat@usda.gov>