After the invasion, Iraq has been looked at as a place of patchy progress and broken politics. Today, though, despite the remaining negative sentiment, Iraq is gradually emerging into a world of economic possibilities; part of Iraq is becoming more politically stable, more economically prosperous, and more integrated to the international economic community — the Kurdish region and the southern provinces are already enjoying greater peace and prosperity. The overall progress can be noticed in its significant economic growth:  over the next 5 years, Iraq’s collective GDP, mainly fueled by oil and services, is expected to grow at double-digit rate of ~12% per annum, reaching USD 250 bn in 2017[1].   With this progress, Iraq will be the fastest growing economy in the region (see Figure 1). On maps and spreadsheets, Iraq abundance of oil reserves, recently boosted to 150 bn barrels (over 9% of global total), will begin exporting around 6 m barrels/day within 4 years[2].

Despite lingering instability, Iraq’s economy is growing at double-digit growth of ~12%, to reach USD 250 bn within 4 years

Furthermore, a combination of stabilized and growing economy as well as an increasing household income, has set the stage for a reviving consumer market. Along with a growing GDP, Iraq’s imports have been growing significantly and are expected to continue to grow at the same pace over the next years (see Figure 2).

Exporters from across industries began including Iraq as part of their emerging market portfolio with Transport Goods, Capital Goods, Industrial Supplies and Fast Moving Consumer Goods (FMCG) leading the list. This acceleration in imports is a further indication of an over-all economic growth surge.

Iraq’s market growth and opportunity however have been particularly attractive for neighboring countries. Almost half of Iraq’s imports are sourced from neighboring countries, notably from Turkey and Syria. Compared to the GCC countries, Iraq’s imports percentage from neighboring countries is close to triple the norms (see Figure 3). Most imports of regional countries are from non-neighboring countries. This special case of goods flow to Iraq is most likely due to the growing trading ties with Iraq's neighboring countries, the relative ease of transportation from nearby countries, familiarity of regional markets, and a more attractive competitive landscape when international players are merely watching from the sideline.

Iraq’s imports have been growing at an impressive pace, yet significantly driven by neighboring countries

FMCG goods represented a considerable portion of the Iraqi imports of 15% last year[1], confirming a flourishing retail market and surging consumer spending.  Along with these improving conditions, several international FMCG companies are noticed today, yet, not as many as the regional ones.

Neighboring brands, such as of Turkish and Iranian origin, are strongly presented in the Iraqi retail market. Regional FMCG companies, especially Turkish, rushed into Iraq to secure the lion’s share, and they have claimed significant market shares. Ülker, Yaşar Holding, ETİ and many more have pursued the Iraqi FMCG market and their success is becoming increasingly evident — Iraq is leading their international volume and claiming the greatest share of growth.

A good example of this success is Coca-Cola Içecek (CCI), the 6^th largest bottler in the Coca-Cola system, headquartered in Turkey. They export to numerous countries including Pakistan, Kazakhstan, Azerbaijan, Kyrgyzstan, Turkmenistan, Jordan, Iraq, Syria and Tajikistan. Iraq posted, by far, their strongest international growth in 2012 with volume surging by 80% to reach 42.3m unit cases (see Figure 4). Today, CCI’s Iraqi market represents over 15% of their international volume (up from 11% in 2011) and is expected to continue leading future growth due to its favorable demographics — Iraq has a population of 32 million, of which 70% are less than 30 years old. CCI made the right moves in expanding its operation aggressively in Iraq where they claimed 10% of an increasingly growing non-alcoholic ready to drink beverage (NARTD) market of Iraq last year.

In order to successfully reach the Iraqi market, FMCG companies need to consider multiple strategies