Executive summary

1. Overview of the report:

A comprehensive analysis is commissioned a detailed analysis to identify potential markets for
processed fruit products of Lavidood company beyond Vietnam. The report explores the market
landscapes of Saudi Arabia and Egypt, examining opportunities, threats, and market dynamics. Its
findings inform strategic decision-making and propose entry strategies for new markets in the
Middle East.

2. Key finding:
After conducting a comprehensive analysis of the micro and macroeconomic factors, key
insights regarding the Egyptian and Saudi Arabian markets emerge. In Egypt, the presence of a
sizable and youthful population, alongside a burgeoning middle class, indicates a substantial
demand for health-oriented and natural food products. Despite this potential, the market is
hindered by economic instability, currency fluctuations, bureaucratic hurdles and a convoluted
regulatory framework, which pose significant challenges. Despite these obstacles, Egypt's price-
sensitive consumers exhibit a preference for affordable yet high-quality products, creating a niche
for Lavidfood to position itself strategically. However, the market's infrastructure limitations
impede efficient distribution, complicating market development efforts.

On the other hand, Saudi Arabia, while has a stable kingdom and low crime rates, operates under
an authoritarian regime, with notable wealth inequality and modernization challenges. The
government's initiatives to stimulate foreign investment and support small and medium
enterprises contribute to a growing economy. The processed fruit market in Saudi Arabia is
expanding steadily due to a health-conscious populace, food security policies, and rising
disposable incomes, albeit amidst intense competition and regulatory complexities. Despite these
hurdles, the dynamic nature of consumer preferences and the strong retail infrastructure,
particularly in modern trade channels, provide a fertile ground for strategic entry and market
penetration.

3. Conclusion and recommendation:

Despite challenges, Saudi Arabia' stable economy, strong infrastructure, and health-conscious
consumers make it an attractive market for Lavifood. Lavifood’s entry into Saudi Arabia, backed
by a joint venture, aligns with its growth objectives. Strategic marketing efforts and adherence to
local norms will position Lavifood for success in these promising markets by leveraging its
market knowledge, distribution networks, and regulatory expertise, maintaining operational
control while benefiting from local insights.
 Table of Contents
Executive summary........................................................................................................................................1

1. Introduction:........................................................................................................................................4

2. Company and product background:..................................................................................................4

3. Macro-environment analysis:.............................................................................................................6

4. Micro-environment analysis:..............................................................................................................6

4.1. Micro-environment of Saudi Arabia..........................................................................................6

4.1.1. Product market analysis......................................................................................................6

4.1.2. Competitive analysis............................................................................................................9

4.1.3. Buyer analysis.....................................................................................................................12

4.2. Micro-environment of Egypt....................................................................................................12

4.2.1. Product market analysis....................................................................................................12

4.2.2. Competitive analysis..........................................................................................................16

4.2.3. Buyer analysis.....................................................................................................................18

5. Market selection with justification and Opportunity statement...................................................19

Reference.....................................................................................................................................................25
1. Introduction:
In the context of economic difficulties after the COVID-19 pandemic, the fruit industry has
emerged as a model of market-driven transformation. Thanks to welcoming opportunities,
stepping up negotiations, signing new agreements, and upgrading free trade agreements
(FTAs), Vietnamese fruits now have a presence in most large markets with strict quality
standards, confirming their position in the global market and opening up many chances
ahead. Besides, large enterprises in the fruit and vegetable industry demonstrate a strong
desire to increase the export of products from potential Middle Eastern partners thereby
increasing the export turnover of vegetables and fruits and creating a solid foundation to build
Vietnamese brands for unique agricultural products. Therefore, the purpose of this report is to
analyze the potential market for Lavifood company on the journey to bring agricultural
products from Vietnamese farms to the world.

In pursuit of this objective, the report will be divided into five major sections. Firstly, it will
present basic details about the Lavifood company. Following that, an examination of the
macro and micro environments in Saudi Arabia and Egypt will be conducted to assess the
opportunities and threats associated with market entry. As a result, Lavifood's predicted
adaptability to other markets will help identify the potential market. Ultimately, the report
will outline an entry strategy for Lavifood's international expansion before beginning the
journey.

2. Company and product background:

Lavifood is a company based in Vietnam, operating in the agricultural sector since its
establishment in 2014 with its first factory located in Phu An Thanh Industrial Park, Ben Luc
District, Long An Province. The company specializes in processing and exporting fruits and
vegetables, with frozen fruits as its main product. Additionally, Lavifood also supplies fresh
and frozen vegetables, purees, juices, and concentrated juices. Lavifood's primary markets
include Vietnam, Singapore, France, South Korea, and the USA.

Lavifood's vision is to secure a leading position within the vegetable and fruit processing
industry. The company aims to be the top choice in Vietnam, among the top 5 in Southeast
Asia, within the top 10 across Asia, and among the top 20 globally. To achieve this vision,
Lavifood is committed to providing the best products at the most reasonable prices, balancing
the interests of farmers - producers and the company, along with social responsibility and
maximizing benefits for each stakeholder.

Objectives:
Lavifood aims to establish long-term and reliable business relationships with partners and
customers, achieving mutual benefits.

Strategy:

Product:
Lavifood offers a variety of products such as fresh fruits and vegetables, concentrated fruit
juices, vegetable juices, and dried fruits and vegetables, using advanced technology
techniques. The products are adapted to external conditions and environments. In the
domestic market, the company has utilized abundant agricultural resources and collaborated
with the government and farmers to minimize waste by applying high-tech processing
methods, producing dried, frozen, and flexibly dried products that meet diverse needs.
Internationally, Lavifood plans to move towards "ready to eat" products, not just "ready to
cook."

Price:
Lavifood uses a value-based pricing strategy. The company focuses on selling high-tech
processed products at Tanifood factory for export, hence the price is higher compared to other
products in the market. Lavifood segments the market based on income, demand, and
customer preferences.

Place:
Lavifood collaborates with major supermarket chains nationwide such as CoopMart, Big C,
VinMart, Top Market, and also sells products on reputable domestic and international e-
commerce platforms like Shopee, Lazada, Tiki, Alibaba, etc. The products are exported to
many countries around the world, including demanding markets like the USA, Australia,
Japan, and Singapore.

Promotion:
Lavifood participates in food fairs and exhibitions both domestically and internationally,
helping to introduce products to potential customers and expand the market. Lavifood
regularly launches promotional programs such as discounts and gifts. The company also
engages in PR activities like organizing seminars, events, and sponsoring organizations and
events like the Vietnam football team and the Mekong Delta Marathon. Advertising efforts
are not heavily emphasized.

Company Size:
Lavifood has achieved a revenue of $6 million and currently employs between 201 and 500
staff members, with 34 associated members connected to the organization. The company
owns one of the five most modern factories in the Asia-Pacific region called Tanifood. The
factory is built on a site nearly 15 hectares large and has a total investment of 1,780 billion
dong. It is the first factory in Vietnam to meet the American Lead Silver standard and uses
4.0 technology in management and operation.
Competitive
Lavifood employs advanced technologies like VHT and IQF to enhance product
quality and extend shelf life while maintaining nutritional value. Their strict quality
control procedures, from sourcing to production, meet global standards, satisfying
markets like the US, Singapore, and Japan. They prioritize supporting farmers
through diverse fruit procurement, modern cultivation methods, and software
assistance. This boosts product quality, expands market presence, and ensures
international competitiveness. Additionally, they've established a comprehensive
value chain to maintain quality throughout the production process.
Strenghths

Lavifood has set up two modern, large-scale production factories and a subsidiary
company, employing skilled and passionate individuals alongside experienced
workers. Their diverse product range has earned numerous quality certifications. They
import production lines from leading countries such as Europe, the United States,
and Japan and utilize High Pressure Processing (HPP) technology to preserve product
freshness, nutrition, and safety, extending shelf life and value. Furthermore, the
 company actively monitors and controls product quality from raw material
procurement to finished exports, holding various international quality certifications.
Resoures

LLavifood acknowledges farmers' importance and provides comprehensive support. They set up
farmer support centers and develop software to advise on market trends and agricultural
practices. Partnering with organizations, Lavifood implements sustainable startup programs to
enhance farmers' awareness, skills, and access to modern technology. These initiatives aim to
cultivate a new generation of skilled farmers, enhance product competitiveness, and safeguard
farmers' well-being.

3. Macro-environment analysis:
3.1. Saudi Arabia
Maccroeconomic Outlook
As the world's largest producer and exporter of oil, this nation plays a pivotal role in the global
energy industry. The Vision 2030 aims to diversify the economy away from hydrocarbons and
enhance job creation by promoting the involvement of the non-oil private sector in the economy.
To achieve the economic diversification goals outlined in Vision 2030, the government has set
targets to increase foreign investment and the participation of medium and small-sized
enterprises.
 3.1.1. Political environment
3.1.1.1. Stability
The nation boasts a stable monarchy but lacks a democratic foundation. The political direction
and future stability are ambiguous. Despite its stability, the kingdom is susceptible to mounting
pressures, ranging from wage concerns and unemployment to the impacts of social media
activism, sectarianism, and fluctuations in oil prices. Under the leadership of MbS, Saudi Arabia
has witnessed a further consolidation of authoritarian power, resulting in the absence of any
democratic institutions.
The operations of the government remain largely opaque. There is a lack of transparency
regarding the disbursement of state funds and the internal decision-making processes governing
their allocation. Moreover, there is no public mechanism in place to hold senior officials
accountable for their decisions.
 3.1.1.2. Safety and security
Attacks can occur indiscriminately, targeting residential areas, military interests, oil facilities,
transportation and aviation, as well as public spaces such as restaurants, hotels, beaches, shopping
centers, and mosques.

Military operations are currently underway to counter efforts by Houthi rebels to disrupt
international maritime shipping activities in the Red Sea.

The State Safety Score of Saudi Arabia is 4.2 out of 10, indicating that many individuals feel
unsafe due to arbitrary detention, torture and ill-treatment, enforced disappearances, extrajudicial
killings, or executions. Compared to other countries in our sample, Saudi Arabia is showing
below-average levels of safety from state violence.

3.1.1.3. Crime rate

Saudi Arabia boasts a remarkably low crime rate, evidenced by its crime index of 28.02,
positioning it as one of the countries with the lowest incidence of criminal activities. The crime
index, a comprehensive metric encompassing factors like violence, property crimes, and overall
safety, underscores Saudi Arabia's status as a safe destination for residents and visitors alike.
With such a low crime index, Saudi Arabia stands out as a secure and peaceful environment
relative to other nations.

3.1.1.4. Corruption
Saudi Arabia has historically ranked relatively low on Transparency International's Corruption
Perceptions Index (CPI), indicating a widespread perception of significant corruption within the
country. The concentration of power within the ruling Al Saud family has raised concerns about
nepotism and favoritism, which can foster corrupt practices. Allegations have been made against
certain members of the royal family for exploiting their positions to benefit themselves and their
associates, often at the expense of public funds or fair competition. Corruption tends to thrive in
sectors like construction, public procurement, and energy.

Companies operating in the kingdom may encounter demands for bribes or kickbacks to secure
contracts or obtain permits/licenses. Recognizing the need to address corruption, the Saudi
government has incorporated anti-corruption efforts into its Vision 2030 reform agenda.
 3.1.2. Foreign Relation/Trade
At the beginning of 2023, despite historical regional tensions, Iran and Saudi Arabia initiated a
reconciliation process with China acting as a mediator. The relationship between Saudi Arabia
and China, a significant oil importer and supplier of essential goods, is expected to strengthen.
However, these dynamics may present challenges to Saudi Arabia's relationships with Israel and
the United States. The United States remains a steadfast ally of Saudi Arabia, particularly in
security matters, although progress in relations with Israel is hindered by ongoing conflicts with
Hamas.
Saudi Arabia ranked as the 21st largest goods exporter and the 32nd largest importer globally in
2022, with international trade accounting for 64% of GDP (World Bank, latest available data).
To promote international trade, attract foreign investment, and diversify non-oil sectors, the
government has devised plans to establish four "economic cities" across different regions of the
country, offering various benefits for businesses operating in these areas.
 3.1.3. Social and cultural environment
The majority of the population in Saudi Arabia is of Arab descent. The culture here is
fundamentally traditional and conservative. Islam deeply influences the social, familial, political,
and legal aspects of people's lives. From a Western societal perspective, Saudi Arabia is often
viewed as a particularly oppressive society, especially towards women and political dissidents.
The nation's wealth, generated primarily from the oil industry, has accelerated the processes of
industrialization and urbanization throughout Saudi Arabia. Today, the international population
of Saudi Arabia is significant, with over 80% residing in the five largest cities.
The increasing technological and economic progress in Saudi Arabia has created tension between
modernization and conservatism. However, societal attitudes seem to be relatively receptive to
these reforms, particularly among the younger generation of Saudis.
Gender discrimination is widespread in Saudi society, influencing and shaping various ideas
about privacy and personal space. Social stratification is notable in Saudi Arabia, with a common
societal acceptance that power and wealth are unevenly distributed, seen as an inherent reality of
Saudi Arabian society. A distinct class system is particularly evident between local Saudi Arabs
and foreign laborers.
3.1.4. Economic Environment
Saudi Arabia stands as the largest economy in the Middle East and the wealthiest Arab nation.
The government's objectives include income diversification, empowering the private sector, and
implementing comprehensive structural reforms. Policies promoting large-scale public
infrastructure projects, alongside foreign direct investment and the robustness of the banking and
financial system, have propelled the country to become the leading economy in the region and
one of the largest in the world.
3.1.4.1. GDP/GDP per Capita
The Saudi Arabian economy heavily relies on oil, with GDP growth closely correlated to real oil
production growth. According to official figures, as of December 2023, the total outstanding
direct debt of Saudi Arabia stands at 1,050.3 billion SAR (equivalent to 280.1 billion USD).
Meanwhile, inflation has slightly decreased to 2.5%, yet it remains above the average of 2%
during the period from 2010 to 2022. The cost of living in Saudi Arabia ranks among the highest
in the Middle East, with a GDP per capita (PPP) of 68,453 USD (IMF, 2023).

3.1.4.2. International Economic Cooperation

Saudi Arabia is a member of several international economic organizations, including AMF, ICC,
GCC, G-20, G-77, IMF, WTO...
In terms of free trade agreements, the General Authority of Foreign Trade oversees all matters
concerning trade agreements and policies related to the Kingdom's foreign trade. Its aim is to
facilitate access for Saudi exports to foreign markets, open up new markets, and address external
obstacles hindering trade.
 3.1.5. Agricultural Environment
Agriculture constitutes 2.4% of Saudi Arabia's GDP and employs 2% of the active population
(World Bank, latest available data). Due to geographical and climatic challenges, particularly
droughts, the country heavily relies on imports to meet its agricultural and food needs.
Water scarcity poses a significant regional challenge that Saudi Arabia is expected to confront in
the future, exacerbated by the expanding cultivation of wheat, which threatens water resources.
Despite being the largest agricultural market in the GCC region, productivity in Saudi Arabia's
agricultural sector remains constrained compared to the substantial public investments it receives.
Official figures indicate that the agricultural sector contributed approximately USD 19.37 billion
to GDP in 2022. Over the past five years, there has been an 18% increase in organic food
farming, reaching 52,800 tons.

3.1.6. Technological Environment

There's a shift in energy consumption trends towards transitioning to a green economy, utilizing
environmentally friendly energy sources. According to the 2020 Environmental Business Report,
obtaining construction permits has become easier through the implementation of online
platforms. Additionally, the country has enhanced protection for minority investors. Based on
changes in 10 indicators, it measures the ease with which local entrepreneurs can start small and
medium-sized businesses.
3.2. Egypt
3.2.1. Political Environment
Under President el-Sisi, Egypt has experienced relative political stability compared to the
tumultuous years following the Arab Spring. However, concerns have been raised by human
rights organizations regarding limitations on freedom of expression, widespread arrests, and
crackdowns on dissent.
From an international marketing perspective, Egypt continues to be a significant market in the
Middle East and North Africa (MENA) region due to its sizable population, strategic
geographical location, and expanding economy. Nevertheless, political stability plays a crucial
role in influencing foreign investment and business activities within the country. Investors and
businesses must closely monitor the political landscape and assess potential risks associated with
it.
While Egypt has made strides towards stabilizing its political environment, challenges persist,
necessitating careful evaluation by international marketers to adjust their strategies accordingly.

3.2.2. Economic Environment

3.2.2.1. Economic outlook
In 2022, the estimated GDP growth was 6.7%, although the growth rate declined to 4.2% in 2023.
The country faced challenges with high inflation and imbalances in the balance of payments.
Despite these issues, financial support has sustained private consumption, expected to regain
momentum as inflation subsides. Household consumption remains stable, supported by measures
controlling energy prices, food subsidies, and a range of financial packages.
On the other hand, business investment has sharply declined due to increased financial constraints
and heightened uncertainty, with a gradual recovery predicted. The IMF forecasts growth to reach
only 3.6% this year before rising to 5% in 2025.

3.2.2.2. GDP
The ratio of public debt to GDP increased from 88.5% in 2022 to 92.7% in 2023, although the
proportion held by external creditors only accounted for approximately one-third of GDP.
Exchange rates have experienced minimal fluctuations since the beginning of 2023, following a
series of depreciations that caused the Egyptian pound to lose about 50% of its value against the
US dollar since the beginning of 2022. The GDP per capita (PPP) was estimated by the IMF to be
$17,123 in 2023.
3.2.3. Social and cultural environment
Egyptian society is relatively homogenous, with approximately 90% of the population adhering to
Sunni Islam, while the remaining 10% primarily identify as Coptic Christians. Both groups
generally uphold the notion of a unified nation and self-identify as Arab Egyptians, with no
separatist movements.
The 2014 constitution enshrines religious freedoms, designating Islam as the state religion and
Shariah as a primary source of law. The regime opposes and stigmatizes atheism, with many
atheists being detained under strict blasphemy laws. The society maintains conservative religious
attitudes, a factor the regime considers when formulating policies and laws, although it
continually highlights its secular nature.
3.2.4. Technological Environment
In May 2022, the Egyptian government announced plans to implement a series of smart industrial
zones near Cairo, aiming to develop projects related to artificial intelligence technology and
promote industrial automation. Additionally, in 2021, Egypt introduced the ICT 2030 strategy to
develop ICT infrastructure, including digitalization, capacity building, and encourage domestic
innovation by the year 2030.
3.2.5. Foreign Relationship/Trade
Egypt is a key player in regional diplomacy, actively engaging in mediating conflicts in the
Middle East. However, the ongoing Israel-Hamas conflict in Gaza and the escalating tensions
between Russia and Ukraine present significant challenges to Egypt's foreign policy agenda.
Despite these challenges, Egypt and Israel have proposed initiatives to enhance their economic
ties and bilateral trade relationships. Egypt's economy heavily depends on wheat imports, with
Russia and Ukraine being major suppliers. The country's trade sector, constituting 37% of GDP,
is gradually opening up with the approval of various free trade agreements. Petroleum products,
particularly oil and gas, dominate both exports and imports.
In response to economic pressures stemming from the Russia-Ukraine crisis, Egypt is intensifying
efforts to boost exports and curtail imports to stabilize its foreign exchange reserves. Notably, the
country's economy faced a trade deficit estimated at around 6.8% of GDP in 2022, highlighting
the importance of these measures for economic sustainability.
 3.2.6. Agricultural Environment
The agricultural sector contributes 10.9% to Egypt's Gross Domestic Product (GDP) and engages
20% of the working population, according to the latest data from the World Bank. Historically
significant for Egypt, this sector accounts for approximately 20% of the total export value and
foreign exchange earnings. The country possesses 3.9 million hectares of agricultural land with
only 45,000 hectares of forest, as reported by the Food and Agriculture Organization (FAO). Its
warm climate and abundant Nile River water enable multiple harvests annually. Principal crops
include cereals, cotton, sugarcane, and root vegetables. Egypt also holds a significant position as
a major producer of long-staple cotton, crucial for the textile industry. According to recent
official government statistics, Egypt's agricultural exports increased by 15% in the first ten
months of 2023, reaching a notable figure of 4.3 billion USD.
 Egypt's non-oil industrial sector remains somewhat constrained. Despite efforts to diversify the
economy, the nation continues to heavily rely on the Suez Canal for a substantial portion of its
foreign income.

4. Micro-environment analysis:
4.1. Micro-environment of Saudi Arabia
4.1.1. Product market analysis
Size of market in term of demand

There is a slight increase in the sales of frozen fruit in terms of value from 2019 to 2023. In
detail, it increased by 2 SAR million during this period.

Figure 1: Sales of processed fruit and vegetable by category

 Revenue in the Processed & Frozen Fruits market amounts to US$312.80m in 2024. The market
is expected to grow annually by 3.98% (CAGR 2024-2028).

Figure 2: Revenue in the Processed & Frozen Fruits market

Product lifecycle

It is expected that the Saudi Arabia Fruit Concentrate market would witness steady growth in the
next five years since 2024 as the industry matures. Taxes enforced by the Saudi government on
energy and carbonated drink purchases encouraged the market for fruit concentrates to expand.
According to Statista (2024), user penetration is about 4.0% in 2024 and is anticipated to hit 5.5%
by 2029. Additionally, in the Processed & Frozen Fruits Market, the number of users is expected
to amount to 2.2m users by 2029. This potential number would greatly indicate citizens’
consumption ability.

Product segments

The Saudi Arabia processed fruit market segmentation accounted for 62,8% of market’s total
value, and reached a value of $6.2 billion in 2019.
 Figure 3: Saudi Arabia agricultural products market category segmentation

Size and relative growth rates of these product segments

According to Sales of Processed Fruit and Vegetables by Category in terms of percentage value
growth 2018-2023, the CAGR of Frozen fruit from 2018 to 2023 is 3.6%.
 Figure 4: Sales of Processed Fruit and Vegetables by Category

Sources of foreign supply for extent the market

According to OEC, Saudi Arabia is reported to have a total $174M of processed fruit imported in
2022. In detail, Saudi Arabia imported processed fruit and nuts mainly from China ($23.6M),
Kuwait ($20.3M), United States ($18.7M) and United Arab Emirates ($17.9M).

Market Channels

According to Euromonitor (2023), there are various retail channels of Processed Fruit and
Vegetable in terms of value from 2018 to 2023 particularly shown in the chart below. This figure
primarily indicated that retail offline remains the significant contribution as the key distribution
channels in comparison with online channels. In detail, grocery retailers took up the highest
proportion with 99.9& in 2018; however, it witnessed a slight decrease in 2023 with 99.4%.
Online channels still had a low portion in 2018 and gradually increased to reach 0.6% in 2023.

4.1.2. Competitive analysis

Theo Euromonitor (2023), there are a variety of companies in Saudi Arabia activating in the
Processed Fruit Market. Gulf Food Industries is the typical one with 19.9% in terms of value in
 2023, which offers over two hundred products processed in over twenty countries around the
world. From humble beginnings, they started selling three SKU’s, mainly California canned fruit,
then they introduced the Middle East quality canned Fava Beans from California. In 2018 they
celebrated their one billionth can produced. They offer many different types of fruits, from fruit
cocktails to peaches, pears, pineapple, and apricots in various sizes. Some of their fruit
availability is in their natural juice and some in light syrup. There is a significant performance of
the company with more than one million families across the Middle East eating their products
daily. Additionally, the company works closely with factories across the world to ensure they
meet the company's high-quality standards.

Followed by Luna - National Food Industries accounted for 9.5% in 2023, which was established
in Jeddah, Saudi Arabia in 1993. With its modern facilities, the factory is the largest integrated
food industry in the Middle East. It processes and packages a wide range of canned goods,
including block cheese, foie gras, peas and beans, evaporated milk, ice coffee, flavoured milk in
cans, sweetened condensed milk, sterilized cream, UHT milk and flavoured milk, cream cheese
spread, and tomato paste in cans and Tetra Pak.

Besides, there are still some potential competitors such as Basamh Trading Co, or Sunbulah Food
and Fine which accounted for 9.4% and 7.4% in 2023 respectively.

Lavifood’s strengths in comparison with competitors?

Lavifood is heavily investing in modern processing technology with large-scale, advanced

factories such as Lavifood, Tanifood... to be able to consume all types of fruits from the
community. This not only helps to increase the value of Vietnamese agricultural products but also
contributes to raising stable incomes for farmers.
Furthermore, they are collaborating to establish the Lavifarm farmer support centre and develop
the E-Farm Software Solution to assist and advise farmers on market trends, technical solutions,
agricultural material usage, preprocessing, and preservation of agricultural products... to enhance
the competitiveness of agricultural products, build local agricultural brands, linkages, and
cooperation to ensure benefits for farmers.
Lavifood has also partnered with the Vietnam Green Startup Fund, the Organic Agricultural
Economics Institute to implement sustainable startup support programs for farmers to
continuously improve awareness, skills, and training in accessing new agricultural science and
 technology, gradually creating a new generation of dynamic and knowledgeable farmers, meeting
international production standards.
Additionally, by 2025, Lavifood is expected to expand cultivation areas to 33,100 hectares,
achieve vegetable and fruit output of 1 million tons/year, and reach a total revenue of $1.5
billion/year. Along with that, Lavifood will establish factory chains starting in provinces such as
Long An, Tay Ninh, Hai Phong, Lam Dong, Dak Lak...

4.1.3. Buyer analysis

Saudi Arabia fruit concentrate market is projected to grow at a CAGR of 4.15% during the
forecast period (2020-2025).
Consumers in Saudi Arabia are more inclined toward a carbohydrate-rich diet. However, they are
gradually shifting to a vitamin, mineral, and fiber-rich diet.
According to World Bank data, the GNI Per capita of Saudi Arabia of 2019 was $22840 whereas
that of 2018 it was $21610. There has been a rise of 5.55%. On the other hand, the inflation level
was -2.093%. Thus the income level rise is more than the inflation level. This shows that people
had more surplus money in their hands. The rise in surplus money has accelerated people’s desire
for luxury items. This is one of the reasons behind the increase in the consumption of Fruits and
Vegetables in Saudi Arabia.
As a result, when entering the Saudi Arabia market, Lavifood can vary ranges of high-quality
products with high prices to maximize meeting the usage needs of customers then boost sales.

4.2. Micro-environment of Egypt

4.2.1. Product market analysis
Size of market in term of demand

According to Euromonitor (2023), the processed fruit market witnessed a dramatic increase by
approximately 3.4 EGP million from 2018 to 2023, despite volume growth still unchanged within
5 years. Moreover, revenue in the Processed & Frozen Fruits market amounts to US$1.18bn in
2024. The market is expected to grow annually by 10.82% (CAGR 2024-2028).
Product lifecycle

According to Statista in 2024, in relation to total population figures, per person revenues of €9.81
are generated. The average revenue per capita shows a strong upward trend from 2018 to 2023,
and it is forecasted to increase even further in the period from 2024 to 2028. Additionally, the
average volume per person in the Processed & Frozen Fruits market remains high, expected to
reach 2.0kg in 2024. This likely leads to an increase in demand for higher quality fruits, driven by
higher living standards and busier schedules.
Product segments

From the chart below, the feature highlighted by the data is that frozen fruit accounted for only
9.1 EGP million in terms of value growth in 2023, and is predicted to slightly increase over the
next 5 years until reaching 9.8 EGP million in 2028. Another two categories of processed fruit
and vegetable also are forecasted to significantly increase in the future such as Frozen Processed
Potatoes and Frozen Processed Fruit and Vegetable.
Sources of foreign suppliers
According to OEC (2022), Egypt is reported to have spent $22.9M totally in importing processed
fruit and nuts from various countries. In particular, Egypt imported processed fruit mainly from
Greece ($4.85M), followed by Spain ($4.25M) and Thailand with $3.89M.
Market channels
According to Euromonitor in 2023, Egypt utilizes both offline and online sales channels to boost
revenue in the processed fruit and vegetable market. In the chart below, offline retail almost
outweighs online retail, with an extreme result of Grocery Retailers (100%) in 2018, and
experienced a slight decrease in value growth in 2023, with 98%.
4.2.2. Competitive analysis
Despite having to import processed fruit from various countries, Egypt still has many domestic
brands such as Farm Frites Egypt and United Co Food Industries Montana, which achieved 9.9%
and 6.3% respectively in terms of value growth in 2023.
 In particular, Farm Frites was established in Egypt in 1988 as a joint venture between Farm Frites
Holland and Kuwait Food Company – known as Americana. The Farm Frites plant in Egypt is
one of the largest Farm Frites plants in the world, presenting the biggest potato farming operation
in the Middle East and Africa. It is made possible by the combination of their cutting-edge
technology and our team's constant commitment to achieving perfection in quality. The business
combines Egyptian rural and cultural traditions with its global experience. The company takes
pride in offering their customers the greatest field-fresh products all year long to achieve the
highest possible product quality. All of the company's potatoes are cultivated exclusively in
Egypt.

United Co food industries Montana is a family-owned firm based in Egypt that produces
agricultural goods. operates its own fleet, production facility, and refrigerators. Additionally, it
sells only natural items that are free of preservatives and additives. The business was supplied
with fruits and vegetables that have been thoroughly cleaned and prepared for processing,
preserving their nutritious value and achieving the highest level of hygiene.
Lavifood’s strength in comparison to the competitors?
Lavifood pioneers in directing consumers to use health-beneficial products, with 100% natural
ingredients, fresh and pure, applying cutting-edge world-leading technology in processing &
blending various fruits and vegetables from farmers into products. This helps farmers consume
their produce and serve the community's benefits, bringing health and joy to everyday life.
Lavifood is the first company in Vietnam to have a factory meeting international standards for
energy efficiency and environmental protection (Lead silver) from the US Green Building
Council (USGBC), applying Industry 4.0 technology in management and operation. Furthermore,
Lavifood offers a diverse range of naturally grown dried fruits with strict quality standards and a
large scale, which is seen as a competitive advantage compared to competitors.

Last but not least, by 2025, Lavifood is expected to expand cultivation areas to 33,100 hectares,
achieve vegetable and fruit output of 1 million tons/year, and reach a total revenue of $1.5
billion/year.

4.2.3. Buyer analysis

Income is one of the key factors that leads to an increase in demand for processed fruit.
Simultaneously, higher incomes can drive increased demand for products with various
characteristics such as safer, higher quality, more healthy, etc.

Average household budget shares for fruit and vegetable in terms of income category still
accounted for a large proportion with all three levels of income. In detail, people who have low,
middle and high income all have high demand for using processed fruit and vegetables with 23%,
21% and 20% respectively.

As a result, Lavifood has price competitive advantages when entering Egypt’s processed fruit
market, which is a key factor of adapting Egyptian customers’ needs.
 5. Market selection with justification and Opportunity statement
5.1. Saudi Arabia

1.1. Opportunities
The Saudi Arabian processed fruit market is on a steady growth trajectory, projected to grow
at an annual rate of 3.98% from 2024 to 2028. This growth signifies an increasing demand
for processed fruitsproviding a ripe opportunity for expansion. As consumers in Saudi Arabia
increasingly opt for healthier dietary options, such as products high in vitamins, minerals, and
fiber, there is a rising trend of using fruit concentrates as substitutes for sugar in baked goods
and confectionery. Lavifood can seize this opportunity to introduce healthier alternatives.
Additionally, tax policies imposed by the Saudi government on energy and carbonated drinks
have spurred the fruit concentrate market's expansion, aligning with consumer preferences
for healthier choices.
Saudi Arabia, boasting a strong economy and affluent population, offers a substantial market
for processed fruits. With a GDP per capita (PPP) reaching $68,453 (IMF, 2023), efforts to
expand this market align with the government's goal of reducing reliance on oil revenue. This
entails fostering the food processing sector, which holds potential for economic
diversification. Additionally, government initiatives aimed at boosting foreign investment and
aiding small and medium enterprises create an advantageous environment for foreign
companies looking to scale up production and export of processed fruits into this promising
market.
1.2. Challenges:
The processed fruit market in Saudi Arabia is competitive, with established players holding
significant market shares. Lavifood will need to differentiate its products and brand effectively
to compete with these established players. Consumers in Saudi Arabia have varying
preferences regarding sugar content, with some preferring juices with no added sugar while
others may prefer natural sweetness. Balancing the sugar content in products to cater to
different age groups and preferences can be a challenge for Lavifood. Furthermore, ensuring
a consistent and reliable supply of quality fruits for processing can be challenging, especially
when operating in a foreign market like Saudi Arabia. Establishing efficient supply chain
management practices and partnerships with local suppliers will be crucial for Lavifood's
success in the market.
Next challenge is that Saudi Arabia heavily relies on its oil industry, despite government efforts
to diversify the economy. This dependence poses challenges for expanding industries like food
processing, including processed fruits, as it could limit diversification opportunities and increase
competition. Moreover, political instability and environmental concerns add to the hurdles faced
by businesses in the country, impacting market expansion efforts. Additionally, the processed
fruit market in Saudi Arabia faces stiff competition from global manufacturers and exporters,
requiring a robust competitive strategy to attract consumers and establish brand trust in this
competitive landscape.\
Egypt
Opportunities:
According to the World Bank's Ease of Doing Business report for 2020, Egypt ranked 114th
out of 190 countries, scoring 60.1 out of 100. Establishing a business in Egypt requires 5
procedures, compared to the Middle East and North Africa (MENA) region's average of 6.5
procedures. Obtaining a construction permit in Egypt involves 20 procedures, while the
MENA region averages 15.7 procedures. Egypt ranks 67th in terms of credit and 57th in
protecting minority investors out of 190 countries.

Egypt has set a target to increase wheat production from 45% of total consumption in 2020 to
65% by 2025. Additionally, the country aims to produce oilseed crops to meet 10% of
consumption by 2025, up from 3% in 2020. In July 2022, the Egyptian Ministry of Planning
set a goal to invest 82.9 billion EGP (5.3 billion USD) in the agricultural sector.

Challenges:
Egypt is ranked 85th out of 152 countries in the Global Conflict Risk Index (GCRI) for the
second quarter of 2022. Its score places it in the category of countries with manageable risks
(40–50). The nation exhibits an unstable internal political environment. Ongoing internal
conflicts in neighboring countries pose unfavorable risks. However, the country's
macroeconomic prospects remain stable due to robust initiatives aimed at implementing
governmental structural reforms.

Egypt faces long-term challenges intertwined with numerous global shocks that have led to
foreign exchange crises, historic inflation, and pressure on already strained financial and
 external accounts. Growth has slowed to 4.2%, accompanied by inflation reaching double
digits since March 2022, surging to 37.4% (food inflation at 71.7%) by August 2023.
Non-oil exports and Foreign Direct Investment (FDI) have been sluggish, private sector
activities restricted, and job creation constrained, especially for youth and women, as
government debt escalates.
Official estimates as of 2019 indicate revenue mobilization below potential continues to
constrain the financial space needed to enhance human and physical capital for Egypt's
population nearing 105 million, nearly 30% of whom live below the national poverty line.

COUNTRY SELECTION
6. When analyzing the potential for entering the markets of Saudi Arabia and Egypt, it becomes
evident that Saudi Arabia presents more favorable opportunities for a foreign company.
Additionally, the risks associated with entering the Saudi Arabian market are comparatively lower
than those in Egypt. Moreover, in the Saudi Arabian market, the advantages significantly surpass
the challenges, unlike in the Egypt market where the balance may not be as favorable.
Considering the strong economic health and changing consumer tastes in Saudi Arabia, Lavifood
has a great chance to grow its dried fruit business there. With a high GDP per capita , people in
Saudi Arabia have a lot of buying power, which supports a high demand for quality and healthy
food products. The processed fruit market in Saudi is growing at a steady pace. This growth points
to a shift towards healthier eating and a rising need for nutritious, easy-to-eat snacks like dried
fruits. Saudi Arabia is working to make its economy less dependent on oil and is actively involved
in international trade groups, creating a supportive setting and possible benefits for foreign
companies. However, Lavifood faces challenges such as tough competition in the market and the
 need to adjust its products to fit local preferences, especially regarding sugar content. By focusing
on smart marketing, ensuring product quality, and building strong local partnerships to keep a
stable supply chain, Lavifood can effectively enter this expanding market, meeting consumer
desires for healthier food choices and making the most of the region's positive economic
environment.
7. Entry strategy:
After carefully considering the options, it appears that Saudi Arabia makes more sense given Lavifood's
current growth trajectory. The Saudi Arabian fruit and vegetable market is thriving due to consumer
inclination toward a healthy diet Source, government initiatives, and the increasing presence of
superstores and hypermarkets (https://www.mordorintelligence.com/industry-reports/fruits-and-
vegetables-in-the-kingdom-of-saudi-arabia-industry). Furthermore, Saudi Arabia has become one of
Vietnam's most important economic partners in the Middle East. Many Saudi businesses are interested in
Vietnamese goods, particularly agricultural products and foodstuffs, as the Middle Eastern country seeks
to diversify its supply sources to ensure food security(https://thesaigontimes.vn/tao-dieu-kien-cho-cac-
tap-doan-lon-cua-vung-vinh-mo-rong-dau-tu/). This presents Lavifood with a significant opportunity to
enter a rapidly expanding Middle Eastern market. Among various entry modes, Joint Venture is
considered to provide superior advantages over exporting methods, taking into account factors such as
market complexities, cultural nuances, risk mitigation, and strategic alignment with Lavifood's marketing
objectives when determining the best entry strategy for Saudi Arabia.

A suggested company to form a strategic alliance with Lavifood is Sunbulah Group, which has a
significant presence in several food categories, such as frozen vegetables and pastries, frozen processed
meat, premium cheese, and natural honey. One of the important reasons demonstrating the potential bond
between the two companies is the goal of fulfilling strong commitments to satisfy user needs, as well as
the desire for long-term, mutually developing relationships with customers, partners, and the community.
This is also one of the most crucial aspects when selecting a joint venture or export method to Saudi
Arabia. Lavifood can foster a deeper, long-term relationship with its customers in Saudi Arabia by
forming a joint venture with a local partner based on shared goals and trust. Furthermore, within the joint
venture with Sunbulah Group, Lavifood maintains operational control and flexibility, subject to
negotiated terms. This alignment enables Lavifood to pursue its strategic vision while leveraging partner
resources, giving it an obvious edge over indirect exports, which lack such control and long-term
relationship-building opportunities.
Secondly, although Lavifood has been present in Vietnam, Singapore, France, Korea, and the US in the
present, the Middle East region is assessed as new and it will be difficult to capture the market in Saudi
Arabia. The joint venture partnership will gain access to market expertise and extensive local knowledge.
This is extremely beneficial for Lavifood in Saudi Arabia, a complex market with intricate cultural
nuances, legal complexities, and distinct consumer preferences. As a result, Sunbulah Group, one of
Saudi Arabia's largest food manufacturing companies, can provide Lavifood with valuable insights into
market trends, distribution channels, and consumer behavior. This will help both parties make informed
decisions and adjust their products and strategies. Conversely, direct exports pose challenges due to the
need for strong marketing efforts and a limited understanding of local market dynamics in the Saudi
Arabian market.

Furthermore, joint ventures minimize risks associated with unfamiliar market dynamics and allow risk
sharing between partners. By sharing resources, expertise and financial investments, both Lavifood and
Sunbulah Group can effectively mitigate risks and improve their prospects for successful entry into the
Saudi Arabian market.

Saudi Arabia is the most suitable choice for Lavifood to export processed fruits and vegetables because it
offers benefits in both the macro and micro environments.
In terms of the macro environment, Saudi Arabia was ranked 35th out of 136 nations in the GCRI Q4
2021, placing it in the low-risk nations band (between 30-40). The country's overall risk score is lower
than that of other Middle Eastern and North African countries and the world average in GCRI Q4 2021.
Moreover, despite facing some debt issues both domestically and internationally, Saudi Arabia has one of
the highest standards of living in the Middle East, with a GDP per capita (PPP) of $68,453 USD (IMF,
2023). Additionally, agriculture accounts for 2.4% of Saudi Arabia’s GDP and employs 2% of the active
population (World Bank, latest data available). Due to geographical and climatic constraints such as
droughts, Saudi Arabia imports most of its agricultural and food products, providing Lavifood with
additional opportunities to compete fairly with competitors in Saudi Arabia due to the country's
substantial demand.

On a micro level, the market size in terms of demand has steadily increased over time. Moreover, revenue
in the Processed & Frozen Fruits market amounts to US$312.80 million in 2024. The market is expected
to grow annually by 3.98% (CAGR 2024-2028). Additionally, according to Statista (2024), user
penetration is about 4.0% in 2024 and is anticipated to reach 5.5% by 2029. The processed fruit and
vegetables market in Saudi Arabia is currently in a maturing stage. The number of users is gradually
increasing, indicating a rise in purchasing power. Combined with this trend, offline sales channels
virtually outweigh online channels; therefore, this presents an opportunity for Lavifood to export dried
fruits to the Saudi Arabian market. Furthermore, according to World Bank data, the rise in income levels
exceeds the inflation rate, indicating that people have more disposable income. Indeed, Lavifood’s
products only need to meet quality, packaging, and ingredient requirements under the best conditions to
attract a large number of customers in Saudi Arabia. Currently, Lavifood's product prices are moderate,
but when choosing to export to Saudi Arabia, the brand can be varied to increase sales while retaining
customers and encouraging repeat business in the near future.

Reference
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Apr. 2024].

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structuring-joint-ventures-in-saudi-arabia-what-every-foreign-investor-should-know.pdf.

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2024].

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[Accessed 20 Apr. 2024].

www.mordorintelligence.com. (n.d.). Saudi Arabia Fruits and Vegetables Market | 2022 - 27 |

Industry Share, Size, Growth - Mordor Intelligence. [online] Available at: Setting up a
partnership in Saudi Arabia involves several steps. Initially, deep market analysis is required to
identify potential partners with trustworthy backgrounds, financial stability, and alignment with
Lavifood's goals. The Sunbulah Group emerges as a partner for Lavifood leading to discussions
on ownership structure, profit sharing and decision-making processes. The required
documentation includes an agreement outlining roles and responsibilities followed by a joint
venture contract prepared by law experts. Adhering to regulations especially those concerning
foreign ownership restrictions is crucial and may require approval from the Saudi Arabian
General Investment Authority (SAGIA) or other relevant government entities (Structuring joint
ventures in Saudi Arabia: what every foreign investor should know, n.d.). Moreover
understanding and respecting the culture are essential for the success of the partnership.
Ultimately the success of the Lavifoods' joint venture shows careful planning, cultural awareness
and compliance with laws.

‌
 ‌

ABOUT LAVIFOOD

Lavifood is a company based in Vietnam, operating in the agricultural sector since its
establishment in 2014 with its first factory located in Phu An Thanh Industrial Park, Ben Luc
District, Long An Province. The company specializes in processing and exporting fruits and
vegetables, with frozen fruits as its main product. Additionally, Lavifood also supplies fresh and
frozen vegetables, purees, juices, and concentrated juices. Lavifood's primary markets include
Vietnam, Singapore, France, South Korea, and the USA. Lavifood's vision is to secure a leading
position within the vegetable and fruit processing industry. The company aims to be the top
choice in Vietnam, among the top 5 in Southeast Asia, within the top 10 across Asia, and among
the top 20 globally. To achieve this vision, Lavifood is committed to providing the best products
at the most reasonable prices, balancing the interests of farmers - producers and the company,
along with social responsibility and maximizing benefits for each stakeholder.

OBJECTIVES

Lavifood aims to establish long-term and reliable business relationships with partners and
customers, achieving mutual benefits.

Price

Lavifood uses a value-based pricing strategy. The company focuses on selling high-tech
processed products at Tanifood factory for export, hence the price is higher compared to other
products in the market. Lavifood segments the market based on income, demand, and customer
preferences.

STRATEGY

Product

Lavifood offers a variety of products such as fresh fruits and vegetables, concentrated fruit
juices, vegetable juices, and dried fruits and vegetables, using advanced technology techniques.
The products are adapted to external conditions and environments. In the domestic market, the
company has utilized abundant agricultural resources and collaborated with the government and
farmers to minimize waste by applying high-tech processing methods, producing dried, frozen,
and flexibly dried products that meet diverse needs. Internationally, Lavifood plans to move
towards "ready to eat" products, not just "ready to cook."

Lavifood collaborates with major supermarket chains nationwide such as CoopMart, Big C,
VinMart, Top Market, and also sells products on reputable domestic and international e-
commerce platforms like Shopee, Lazada, Tiki, Alibaba, etc. The products are exported to many
countries around the world, including demanding markets like the USA, Australia, Japan, and
Singapore.

Promotion

Lavifood participates in food fairs and exhibitions both domestically and internationally, helping
to introduce products to potential customers and expand the market. Lavifood regularly launches
promotional programs such as discounts and gifts. The company also engages in PR activities
like organizing seminars, events, and sponsoring organizations and events like the Vietnam
football team and the Mekong Delta Marathon. Advertising efforts are not heavily emphasized.

Place

Company size
Lavifood has achieved a revenue of $6 million and currently employs between 201 and 500 staff
members, with 34 associated members connected to the organization. The company owns one of
the five most modern factories in the Asia-Pacific region called Tanifood. The factory is built on
a site nearly 15 hectares large and has a total investment of 1,780 billion dong. It is the first
factory in Vietnam to meet the American Lead Silver standard and uses 4.0 technology in
management and operation.

Lavifood uses cutting-edge technologies like Vapour Heat Treatment (VHT), Individual Quick
Freezing (IQF) to improve product quality, extend shelf life, and retain nutritional value. Their
products undergo rigorous quality control from sourcing to production, meeting international
food safety standards and satisfying demanding markets like the US, Singapore, and Japan. They
prioritize supporting farmers by purchasing diverse fruit materials, implementing modern
cultivation methods, and offering software for monitoring and advice. This not only enhances
product quality but also expands market reach and international competitiveness. Additionally,
they've established a comprehensive value chain involving "6 houses" to ensure quality control
throughout the process.

Lavifood have established two modern, large-scale production factories, a subsidiary company,
and employed skilled and passionate individuals, along with experienced workers. Their wide
range of products has earned numerous quality certifications. Lavifood imports all production
lines from leading countries like Europe, the United States, and Japan. They utilize High
Pressure Processing (HPP) technology to maintain product freshness, nutrition, and safety,
thereby extending shelf life and enhancing value. Additionally, the company actively monitors
and controls product quality from raw material procurement to finished exports, holding various
international quality certifications.

Lavifood recognizes the vital role of farmers in its agricultural operations and aims to support
them comprehensively. They establish farmer support centers and develop software solutions to
provide guidance on market trends, technical solutions, and agricultural practices. Additionally,
Lavifood partners with organizations to implement sustainable startup support programs,
focusing on enhancing farmers' awareness, skills, and access to modern agricultural technology.
These efforts aim to foster a new generation of knowledgeable and skilled farmers while
promoting the competitiveness of agricultural products and ensuring farmers' welfare.

In the context of economic difficulties after the COVID-19 pandemic, the fruit industry has
emerged as a model of market-driven transformation. Thanks to welcoming opportunities,
stepping up negotiations, signing new agreements, and upgrading free trade agreements (FTAs),
Vietnamese fruits now have a presence in most large markets with strict quality standards,
confirming their position in the global market and opening up many chances ahead. Besides,
large enterprises in the fruit and vegetable industry demonstrate a strong desire to increase the
export of products from potential Middle Eastern partners thereby increasing the export turnover
of vegetables and fruits and creating a solid foundation to build Vietnamese brands for unique
agricultural products. Therefore, the purpose of this report is to analyze the potential market for
Lavifood company on the journey to bring agricultural products from Vietnamese farms to the
world.

In pursuit of this objective, the report will be divided into five major sections. Firstly, it will
present basic details about the Lavifood company. Following that, an examination of the macro
and micro environments in Saudi Arabia and Egypt will be conducted to assess the opportunities
and threats associated with market entry. As a result, Lavifood's predicted adaptability to other
markets will help identify the potential market. Ultimately, the report will outline an entry
strategy for Lavifood's international expansion before beginning the journey.