Expenditure Prospects Look Endless in a Diversified Market A recent report from the Organization for Economic Cooperation and Development (OECD) and the United Nation’s Food and Agriculture Organization, projects that agricultural prices will rise by 20-50% over the next 10 years. However, the Middle East & North African (MENA) region which is known by its large population and its heavy dependence on imports to satisfy its nutritional needs, remains a substantial market for different food sectors, especially for retail, dairy, soft drinks and halal food as well as the hospitality industry. |
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Retail |
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The GCC retail food industry has morphed considerably in the past ten years and supermarkets are playing more important roles in the retail chain by providing a greater variety of food at lower costs. According to experts, the UAE hypermarkets have witnessed a 105% growth during the last four years while supermarkets progressed by 77%, as for Saudi Arabia, hypermarkets grew by 45% and supermarkets by 21%. According to Shopper Trends 2007, an annual study recently released by AC Nielsen, Saudi |
| and UAE households spend an average of US$ 400 per month on household shopping, 40% of which goes for fresh food such as meats, fruits and vegetables. | |
Dairy |
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Dairy production in the MENA region has grown by 20% over the last three years due to the increase in consumption rates and the awareness of milk’s benefits; at the same time, many Middle East and North African countries show low levels of dairy consumption, which means they still hold an important expansion potential. In Saudi Arabia, Saudia Dairy and Foodstuffs Company (Sadafco) announced a net profit of US$ 15.3 million for the financial year 2008, up 86 per cent over the previous year. Marmum Dairy Farm, |
| a subsidiary of Dubai Investments Industries and the third largest dairy farm in the United Arab Emirates, is aiming at increasing its milk production by 2.5 million liters. In Algeria, French dairy firm Lactalis bought out domestic rival Celia, and the French dairy giant Groupe Danone raised its interest in Danone Djurdjura in Algeria from 51 per cent to 95. Arla indicated that it wants to increase its annual Middle East turnover from US$ 622.2 Million to US$ 879.8 Million. Finally, Kraft Foods Inc. opened a new US$ 40 million manufacturing plant in Bahrain to produce 60,000 tons annually of the company’s main products. | |
Soft Drinks |
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| cil, the consumption of all types of commercially sold beverages by the 36.4 million people stood at over 15.5 billion liters in 2007. Saudi Arabia alone accounts for almost 65% of regional beverage consumption, and the UAE remains the second largest market. Over the next few years, Saudi Arabia will clearly remain the largest market, but the UAE and Qatar are the markets with the greatest growth potential for beverages. According to David Edwards, Managing Director of the IMES Consulting Group nearly all beverage categories will continue to grow at a healthy rate over the next 5 years, with energy drinks being the fastest growers. |  |
Halal Food |
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| The Halal food market currently accounts for as much as 12% of global trade in agri-food products, which is estimated at US$ 80 billion; Estimates on the size of the global Halal market range between US$ 500 billion and US$ 2 trillion. With expected increases in both population and incomes of Halal consumers, this percentage is certain to increase. Furthermore, with the Muslim population projected to account for 30% of the world’s population by 2025, Halal food could easily account for 20% of world trade in food products in the future. Saudi Arabia and the United Arab Emirates (UAE) are seen as the most important import markets in the GCC region, Turkey is seen as both a growing market and a potential supplier for Halal products and Egypt was recently seen as the most important market for Halal food in North Africa. | |
Hospitality Sector |
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| According to the HotelBenchmark™ Survey by Deloitte, hospitality industry in the Middle Eastis still one of the fastest growing regions in the world with revenue per available room (revPAR) growth of 17.0 percent. Average room rates were the main driver up 11.4 percent, while occupancy increased 5.0 percent to 71.6 percent. With investment in excess of US$ 30 billion in more than 120 new multiple hotel projects across the Arabian Gulf and Egypt, suppliers to the region’s hospitality sector can expect unparalleled business opportunities over the next ten years. | |
Sources |
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- Organisation for Economic Cooperation and Development - AC Nielsen - IMES Consulting Group - Deloitte Touche Tohmatsu Middle East Food (MEF) magazine is your ticket to the lucrative MENA Food market |
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