The Middle East food processing market size is anticipated to register growth during 2020-26.The Middle East market covers the Gulf Co-operation Council consisting of members like Bahrain, Kuwait, Oman, Qatar and the UAE, Saudi Arabia. The largest markets are the UAE and Saudi Arabia.

 

The Middle East & Africa specialty food ingredients market is projected to grow at a CAGR of 2.5% during the forecast period (2020 - 2025). The Kingdom of Saudi Arabia (KSA) and the United Arab Emirates (UAE) are the largest and fastest-growing food processing markets followed by Qatar and Kuwait. There is demand for convenience products due to higher levels of disposable incomes and shortage of time for cooking. People in Middle East prefer trying new cuisines and food products that will take less time to cook. This has increased the demand for frozen food products and high quality baby foods.The Middle East and Africa food processing machinery market was worth US$ 5.18 billion in 2021 and estimated to be growing at a rate of 6.2%, to reach US$7.1 billion by 2026.

 

The F&B market increased from $34.6 billion in 2019 to $37 billion in 2020. Expenditure on F&B is expected to increase at a rate of 6.9%. Saudi Arabia alone is expected to witness a growth of 5.4%. The Saudi Arabian food sector is witnessing heavy investments because the country wants to improve its food security. Annual investment in the food sector in Saudi Arabia is expected to reach €19.3 billion. Increase in consumer preferences to order food via food delivery app is boosting the prospects of processed foods in Saudi Arabia. The Government is supporting the establishment of wholly owned subsidiaries of foreign players.

 

The food processing equipment can perform operations like slicing vegetables, pureeing, mixing and kneading dough, shredding or grating cheese or vegetables, grinding nuts and seeds. The market is sensitive to the quality of processed foods and the way the food products have been handled.  Processed foods are now available in Middle East that offer enhanced taste, improved shelf life, low risk of contamination and easy portability.The food processing market is expected to grow significantly in the near future due to increase in demand for ready to eat food products, baby foods and frozen food products. Changes in lifestyle of consumers and awareness towards infant health and wellness coupled with more women taking up employment are the main reasons for the dramatic shift in consumption of processed foods.

 

But the picture is not entirely rosy. Consumers are concerned about loss of nutrients when food is processed or addition of genetically engineered ingredients.  Food manufacturers are shifting to use of pre-packed vegetables and ready to eat food products. The Covid-19 pandemic resulted in Middle Eastern countries announcing new laws related to food safety and security. Food manufacturers and retailers are now bound legally to take all precautionary steps to ensure safety of food products and proper packaging. Despite supply chain disruptions due to pandemic, the processed food market did not experience any major impact. Lockdowns resulted in people cooking at home and demanding frozen foods, snacks and products having a longer shelf life. The food processing market is divided into three groups - primary, secondary and tertiary food processing. Organised sector is expected to grow in the near future due to increase in food outlets and restaurants that provide hygienic food for their customers. The competitiveness in the food and beverage industry is driven by different categories of processed foods that are available for consumption like ready meals, baked foods, breakfast cereals like corn flakes and muesli sprinkled with dry fruits. Non-alcoholic beverages and confectionaries are other categories. The quality of processed foods relies on specialty ingredients.

 

Consumers are looking at purchasing food and beverages that have a shorter shelf life. Consumers seek fresh food with nutritional quotient that can boost their immunity.  Organic foods, wholegrain cereals, processed breakfast cereals along with fruits and vegetables will continue to witness a surge in demand. Consumption in meat is expected to spiral downward as consumers are concerned about consuming food products that can lead to obesity and cardio vascular complications.  So, meat processors need to introduce leaner versions of meat that contain less fat.

 

Functional foods are fortified with ingredients to enhance their nutritional value. Companies are also doing research to introduce multifunctional foods in the market. Plant-based functional extracts like green tea and antioxidants are being considered for inclusion in processed foods.

 

The UAE has become a hub for food and beverage production in the Middle East. Investments in advanced production technology, packaging and distribution capabilities reflect the growth in food processing market. Efforts are on to reduce import dependency. This augurs well for the future of the food processing industry. But hygiene standards will need a drastic improvement to meet global standards. India’s food trade with UAE is growing. Middle East countries are a great opportunity for Indian fruit and vegetable processors. Semi processed fruit pulps are exported to countries in the Gulf region for conversion to ready to drink beverages.

 

For all businesses that aspire to be market participants in the Kingdom of Saudi Arabia and the United Arab Emirates, innovation and product differentiation will drive success. Innovations can be explored in the form of new flavours, ingredients and better taste. Interestingly, the food consumption habits differ across weekdays and weekends.

 

Rising awareness about health issues, product differentiation and convenience will drive the food processing market in the Middle East. Cereals are being consumed more followed by value-added dairy products, fruits, vegetables and meat based products. Alternatives like organic foods, whole wheat and gluten free products are increasing manufacturers’ margins. Government’s efforts to create awareness about the need for a balanced diet are stoking trends in the right direction. Technologies like Internet of Things in agriculture for food processing and traceability are future developments. Millennial population in Middle East active on social media are also looking at consumption of premium products.