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The Middle Eastern and North African Food Market,
Growing at Fast Rates, Taking New Dimensions

The Middle East and North Africa (MENA) region is a major global market for agricultural and food products. As a region, it is one of the largest producers and importers of food and feed grains in the world: the region includes Egypt, the largest wheat importer in the world, and Turkey, one of the largest wheat producers.

The fast-growing food and beverage processing industry has remarkably increased in importance in major countries of the MENA since the 1970s. Growing populations, rising incomes, changes in lifestyles, ambitious development plans financed by oil revenues and the overseas expansion of European and American food-manufacturers since the 1980s have all contributed to the industry’s booming growth.

Since the early 1990s, the increased agricultural output stimulated an increase in fruit and vegetable canning as well as juice, beverage, and oil processing in countries like Egypt, Syria, Morocco, Tunisia and Lebanon. The agricultural expansion also occurred in the Gulf Region as a result of which Saudi Arabia became nearly self-sufficient in some products and able to export to neighboring countries. These new facts prompted the establishment of many Saudi technologically-advanced dairy products, bakery and oil processing plants.

Demand for processed food in MENA is likely to increase. Population is growing by more than 3 percent a year in many countries of the region and incomes are increasing. Consumption patterns are expanding as people become increasingly educated, exposed to other cultures and concerned with health and food safety. Trade agreements such as those with the European Union and the World Trade Organization are opening local markets to foreign producers and investors. Thus, the agro-food sector is currently witnessing an unprecedented growth in many countries of the MENA region:

In Lebanon, investments in the food and beverage industries represent more than 40 percent of the investments targeting the industrial sector, a ratio that reinforces the sector’s key importance to the Lebanese economy. Similarly, the industrial agro-food sector is one of the major contributors to the Egyptian GDP.

At the same time, around 300 food manufacturing establishments worth US$350 million have been recently established in Jordan thanks to the advancement and modernization of Agriculture. It is worth noting that a number of the establishments are joint ventures between Jordanian and foreign companies, a majority of which are several beverages producers.

Saudi Arabia remains the largest market for food & beverage in the Gulf region as it represents 63% of the US$9 billion Gulf market. Soft drinks, juices, breakfast cereals, natural foods, edible oils, cakes and biscuits, poultry and meat products are all sectors in continued high expansion and growth. Yet, the hot climate and growing population are creating a particularly rising demand for the soft drinks’ market as annual sales exceed US$1.2 billion in this sector alone. Special growth opportunities exist for natural drinks and health beverages. Saudi Arabia's market for soft drinks is growing at a rate of almost 10% per annum by volume.

The number of Saudi food producers is growing at double-digit rates in order to supply a rapidly expanding network of supermarkets and food stores. 75% of the output of the local packaging industry is for the food and beverage producers and packers. The high growth of the Kingdom's food industry offers special opportunities for suppliers of bulk commodities and food processing and packaging equipment.

Despite the growth efforts deployed in various countries, there is a huge gap between food production and consumption in the MENA region. The agro-food sector is still largely relying on imports from foreign countries, and, on average, food imports represented 15-20 percent of total imports over the past two decades. However, they represent a much higher proportion in the Gulf region, where some countries are totally dependent on imports to meet their food needs. Kuwait, for example, imports 100 percent of its food, and food imports made up 30 percent of average total imports for Egypt.

According to a market study of Canada’s export opportunities in 10 MENA countries, the region offers extensive opportunities for value-added processed food, especially in markets such as Saudi Arabia, the UAE and Kuwait.

Yet, with its central location, MENA could also play an important role in re-exporting food products to other regions of the world. A well-known example is the UAE with Dubai being the region's trans-shipment hub, with 70% of total UAE food imports re-exported to other Gulf countries, the Indian sub-continent, North and East Africa, and increasingly, the Central Asian Republics.

Another noticeable phenomenon taking place in most countries of the MENA region is the quick transition from high-street shops to custom-designed shopping complexes. International hypermarket chains as Carrefour and Geant are gaining a strong foothold in the Gulf as well as in the Middle East. Their cutting-edge store designs and services offer convenience and a wide range of products and brands. Price competition is at its peak and food marketing is shifting to a new level by seeking consumer satisfaction.

Thus, the Agro-food sector in the MENA region is shifting today to a new level based on a consumer-oriented marketing. State-of-the-art establishments are being built, and food production is complying with the new consumption patterns of a “quality” and “health” aware consumer.

Despite the challenges of a largely arid land and limited agricultural resources, the MENA food industry is a vital segment in different economies, and it proudly dares integrate the latest technological advancements, stepping forward into a prosperous future.