Exciting Growth and Investment Potential in GCC Food Sector
There is very good reason for the high levels of optimism currently circulating the GCC food sector.
Core demographics, fundamental to growth in Food Services, indicate a very positive outlook for private sector companies that are positioning themselves to meet growing demand in the GCC and MENA.
This blog post examines some of those key growth drivers and emerging trends in Food Services, and includes insight from industry analysts and leading companies operating in the region.
Let’s look at four key factors driving food consumption in the GCC:
1. Rapid population growth (2 x global average)
2. An increase in tourism
3. Economic growth (the region’s GDP is expected to reach US$ 1.8 trillion by 2017 from US$ 1.1 trillion in 2010)
4. Purchasing power strength in the region (per capita income is likely to increase to US$ 36,839 in 2017 from US$ 27,304 in 2010).
Consider alongside these powerful indicators the rising significance of the Halal food industry, which has ballooned to a global value of USD $685 billion. Dubai, with its governmental push to lead the ‘Halal revolution’, combined with its advanced logistical might, is widely viewed as the pivotal regional player.
Historical and forecast food consumption in the region is spiking. The GCC will consume 49.1 million tonnes of food annually by the end of 2017, with the UAE to be the largest consumer in per capita terms, according to a 2013 GCC Food Industry Report. The same 2013 study shows that, over the past five years, the value of the UAE’s total foreign trade in food products was $80.4 billion – remarkable growth of 84%.
Arabian Gateway’s global gathering is designed to help your company successfully expand into MENA, using the UAE as its gateway. Attending delegates will benefit from direct access to our industry panel experts and market analysts from Zawya Thomson Reuters, who will be facilitating workshops to examine opportunities in detail and build strategies specific to your company to tap into this potential.
Book your place now and position your company for success.
Trends and Investment Positives (Alpen Capital Group 2013)
- In-line with the global trend, the region is also going to see a changing consumption pattern – a shift to a protein-rich diet that includes meat and dairy products from a carbohydrate-based one that consists of staple food items such as cereals.
- Increasing urbanization, hectic lifestyles, growing popularity of large food retail formats and presence of multinational food companies in the GCC region are expected to increase the popularity of high-value processed foods among consumers, driving their consumption.
- While there is a growing awareness and drive about healthy living, obesity rates are high and diabetes is a concern for the region. As a consequence, demand for health food (also known as functional food) which is high on energy and nutrition is expected to gain traction. This is likely to be a fast growing segment.
- Halal food consumption is growing at a faster pace with the rise in income levels, and tourist activities in the region.
- Per capita consumption in the region is low compared to that in developed economies and is expected to increase at a relatively higher rate.
Market Insight & Observations
“An increasing trend of dining out and stronger preference for quick meals, including fast food and ready-to-eat foods, have opened up exciting growth opportunities in this sector” – The Savola Group
“The GCC government focus on food security is likely to see more investments in the regional / local food processing and production sector and setting up of home grown units” – A’Saffa Foods SAOG
“With rising population and income levels, demand for food and food products in the GCC has been rising at a much faster rate than the developed economies. Such favourable demographic factors present tremendous opportunities in Food Services” – Allana International Limited
“With continuous government support and private sector involvement, the food processing segment is becoming one of the leading and most diversified industries in the GCC. Growing food requirement and a high dependence on imports creates interesting opportunities for private sector companies operating in this sector” – Alpen Capital Group
“We estimate that due to population growth, increase in foreign tourists and per capita income, food consumption will reach 49.1 million metric tonnes (MT) by 2017, growing at a CAGR of 3.1% over the period 2012-2017. To meet this increasing demand for food arising out of the growing consumption is both a challenge for the GCC governments and an opportunity for private sector players to expand within the GCC markets” – Alpen Capital Group
“Among GCC countries, the UAE leads the food processing sector due to its strategic location and strong logistics” – Alpen Capital Group
You can learn more about our Arabian Gateway program agenda here.
Arabian Gateway is a seven day program. Each delegate attends the first two days in the city closest to their current business premises (London, New York, Sao Paolo, Singapore, Sydney or Johannesburg). The final five days take place in Dubai, at the JW Marriot Marquis, from 25th-29th May 2014 (Flights and accommodation included). Book your place now.