GCC food consumption will increase at a moderate pace – News

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Food consumption is expected to increase by 2.3% to reach 52.4 million metric tons by 2025.

Food consumption in the GCC is expected to increase at a moderate pace due to population growth, economic recovery and the reopening of the hospitality and tourism sectors.

The GCC has remained relatively conservative, growing slower due to the economic and geopolitical concerns of recent years. While demand has been supported by population growth and changing consumer preferences, the decline in per capita income since the slowdown in oil prices in mid-2014 led to stable growth in food consumption between 2014 and 2019, according to the United Arab Emirates. based investment banking consultancy firm, Alpen Capital‘s latest report on the GCC Food Industry report.

The continued collaboration between the public and private sectors and the continued efforts of governments to increase food security have helped GCC countries build a strong food ecosystem, resilient to the Covid-19 pandemic.

Food consumption is expected to increase 2.3% to 52.4 million metric tonnes by 2025, with more emphasis on domestic production. In 2020, the GCC consumed 46.8 million metric tonnes of food, with Saudi Arabia and the United Arab Emirates consuming a total of 77.9% due to the increase in population. Apart from the two most populous countries in the region, Oman, Kuwait and Bahrain are expected to experience growth of 4.2% and 4.1%, with higher growth rates in the region.

Grains will remain the staple food of the region, the report predicts, although with much slower growth as most food categories will experience minimal change in share until 2025. However, the category of “other” foods including eggs, fish, legumes, oils, fats, potatoes and honey are expected to experience the highest growth rate of 3.7%, due to the changes in eating habits caused by the pandemic.

“Food consumption in the GCC has been relatively stable in recent years with some highs and lows depending on the economic situation. In terms of the type of food consumed, staples such as rice, wheat and other grains have always experienced stable to high demand, but in recent years, boosted by the impact of the pandemic, we have also witnessed an increase in sales in health foods. Category. Foods such as quinoa, chia seeds, and sprouted brown rice are rapidly growing in demand with the growing percentage of health-conscious consumers. In addition, the initiatives taken by the government in food security, local production and support for the health and well-being of the population have changed the overall outlook and dynamics of the food sector in the region, ”said Priyanka Mittal, Director of India Gate. KRBL Ltd.

The onset of the Covid-19 pandemic coupled with a high incidence of lifestyle-related illnesses is encouraging healthy eating habits in the GCC region, which has resulted in an increase in demand for organic food as consumers seek more home-cooked and plant-based meals. products with high nutritional value. Packaged ready-to-cook variants have grown in popularity with the arrival of global food retailers to the region, along with the demand for private labels. With an estimated population of 66.5 million by 2025, consumers have become increasingly price sensitive, prompting large retailers to look to private labels to preserve their revenues.

“In recent years, there has been more emphasis on improving agricultural capabilities by implementing technologies such as vertical farming, aquaponics, hydroponics, etc. to improve self-sufficiency. Many agreements have been made as part of the region’s strategic plan to improve food security and reduce dependence on imports. Companies have pursued the path of inorganic growth to focus on the growing food demand in the region and thereby expand their supply. Going forward, food aggregators are expected to transform industry dynamics and are expected to experience traction as consolidation looms in the context of Covid-19 to ensure survival, ”said Sanjay Bhatia, Managing Director of ‘Alpen Capital.

The pandemic has exposed the region’s vulnerability to disruptions in the global supply chain, raising fears of food shortages. GCC governments have taken steps to improve food security through supply chain diversification and are striving to increase domestic production with incentives for technology and investment in the sector. Governments will seek public-private partnerships in this area, paying particular attention to the implementation of the necessary reforms.

“Food consumption in the GCC is expected to grow at a moderate pace due to population growth, economic recovery and the reopening of the hospitality and tourism sectors. The impact of the pandemic has led governments to step up food safety initiatives and operators to adopt new delivery channels to meet the needs of their customers in a context of restricted traffic. We expect an increase in demand for organic, nutritious and ready-to-eat foods accompanied by a growing preference for private labels for price-conscious consumers, ”said Sameena Ahmad, Managing Director of Alpen Capital.

The overall growth of the sector will be driven by population expansion as governments improve economic infrastructure, alongside the much anticipated revival of tourism and related facilities following vaccination. Upcoming mega-events such as the Dubai Expo and the FIFA World Cup in Qatar will also contribute to growth over the next five years.

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Sandhya D’Mello

Journalist. Period. My interests are economics, finance and information technology. Prior to joining Khaleej Times, I worked with leading publications in India, including the Economic Times.


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