By Staff writer
New report says growth in lifestyle-related ailments in the Gulf is driving sales of healthy, organic foods
A growth in lifestyle-related ailments in the Gulf region is leading to an increase in the consumption of healthy, organic, and dietary foods, Alpen Capital has said in a new report.
It said the organic food market in the Gulf, estimated at $300 million in 2009, is anticipated to reach $1.5 billion by 2018 as illnesses such as obesity and diabetes become more and more common.
Alpen also highlighted a projected growth in Halal food imports into the GCC region which are expected to almost double from $25.8 billion in 2010 to $53.1 billion by 2020, registering a 7.5 percent compound annual growth rate (CAGR).
According to the report, food consumption in the GCC is expected to grow at a 3.5 percent CAGR between 2014 and 2019 to reach 51.9 million metric tonnes.
Cereals are likely to remain the most consumed food category, accounting for 46.5 percent of the region's total food consumption in 2019.
However, it added that rising consumption of high-priced protein-rich and healthy foods is expected to gradually eat into the share of cereals in the total food consumption.
During the forecasted period, food consumption in Qatar and the UAE is expected to grow at a CAGR of 5.5 percent and 4.8 percent, respectively, the fastest across the GCC.
Saudi Arabia is the largest food consuming nation in the GCC and is anticipated to remain so for the foreseeable future, Alpen said. Food consumption in Saudi Arabia is estimated to show an annual average growth of 3 percent from 2014. Oman, Kuwait and Bahrain also show similar growth patterns ranging from 2.7-3.2 percent.
Rising population is one of the key drivers of food consumption in the GCC as it naturally increases the demand for food. Based on the International Monetary Fund (IMF) data, the population in the Gulf is projected to increase at a 2.4 percent CAGR between 2014 and 2019 to reach 57.6 million.
Alpen also highlighted challenges that the GCC food sector will face over the next few years.
It said securing a steady supply of food remains a key challenge for the GCC governments due to their dependency on imports.
"Another hurdle in increasing food supply is the lack of effective private sector participation in domestic food projects due to price controls, labour laws, and lack of clarity on government regulations," it added.
The GCC region is also facing extreme water scarcity due to persistent decline in its renewable water resources. An inadequate water supply is adversely impacting the region's limited agricultural productivity, Alpen said.
Sameena Ahmad, managing director, Alpen Capital, said: "High health awareness and a developing taste for a westernized diet, introduced by the increasing expatriate population, are bringing about a change in the region's dietary habits, creating demand for organic and international foods."
Mahboob Murshed, managing director, Alpen Capital, added: "The inherent growth potential of the industry is encouraging international as well as local players to enter and expand their foothold in the sector.
"We see growing interest from these companies to invest in the food sector which expectedly will play a major role to significantly reduce the food imports by the region in the foreseeable future."