25 February 2017

Food consumption in Gulf Arab states is expected to increase by an annual rate of 4.2 percent in the next five years thanks to an expanding young and affluent society and continued growth in tourism, according to a report by Alpen Capital.

With working-class people accounting for nearly half of the population in the Gulf Cooperation Council (GCC), more retailers are offering packaged food and services such as online groceries and mobile trucks to cater to fast-paced lifestyles and multi-ethnic tastes. (Read more here)

Here are some key figures and trends from the Alpen Capital report to watch out for ahead of Gulfood exhibition which kicks off in Dubai on Feb. 26.

·         Food consumption in the GCC is expected to grow to 59.2 million metric tonnes (MT) by 2021 from an estimated 48.1 million MT in 2016. Saudi Arabia and the United Arab Emirates will continue to be the two largest markets, with consumption in Saudi Arabia forecast to reach 37.7 million MT by 2021 and in the UAE to 10.1 million MT (Read more here

·         The retail food market in Saudi Arabia has huge room for expansion, with only 52 percent penetration of modern retail stores. Last June, the kingdom permitted foreign investors to own 100 percent interest in retail and wholesale businesses.

·         The number of food processing units in the GCC is increasing, with rising imports and re-export potential. International firms have invested in, acquired or formed joint ventures with companies in Saudi Arabia to tap the market, including Mars Inc., Delmonte, Frito-Lay, Heinz and Danone Ltd.

·         Convenience foods are in demand and there has been a rise in private labels, which are more profitable for retailers. The retail sales value of packaged foods in the UAE is projected to grow by 5.5% annually to reach $5.6 billion in 2020.

·         Demand for healthy and organic foods is also rising amid increased awareness of lifestyle diseases, which are prevalent in the region. Sales of healthy packaged foods in the UAE are forecasted to grow by 9.2 percent annually to reach $357 million by 2020.

·         New distribution channels: Online grocery stores and food delivery platforms are most prevalent in the UAE, as are mobile food trucks, but these trends are also picking up in other Gulf Arab states. (Read more here)

© Express 2017