Gcc Functional Food Market

Functional Food Market: GCC Industry Analysis and Opportunity Assessment 2014 - 2020

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GCC Functional Food Market: The revenue generated from the sales of functional foods in GCC countries is estimated to be around US$ 4,895 Mn in 2014, and is projected to expand at a CAGR of 10.9% during the forecast period 2015-2020.

Considering the trends in a span of the past few years, the Middle East nutraceuticals industry is expected to grow at a significant rate. The market for dietary supplements is attaining relative maturity as compared to the market for functional food, thus there is a high potential for the growth of functional food products, which can be attributed to healthcare spending and self-medication. These factors have resulted in a shift in consumer preference towards the consumption of essential nutrients to remain healthy and avoid medical expenses. The market for GCC functional food is expected to witness high demand in specific countries, such as the UAE and Saudi Arabia, whereas, other countries of GCC are likely to witness low demand.

Functional foods are nutritive foods that deliver additional benefits over and above their basic nutritional value. Functional food encompasses a large variety of food items, such as omega 3 fatty acid-fortified eggs, stanol/sterol-enriched low-fat spreads, probiotic yogurt and protein breads, which can be consumed daily. GCC functional food market demand is directly related to the awareness and the disposable income of the population. The rising disposable income of the Middle East population due to increased employment rates and the economic independence of women has led to an overall development in the lives of the people, which is supporting the growth of the GCC functional food market. Moreover, government spending on healthcare for the prevention of diseases arising from obesity and cholesterol has increased, and governments are heavily promoting the consumption of fortified or functional food. Governments of Saudi Arabia, Kuwait and the UAE conduct various awareness programs and exhibitions to promote the consumption of healthy foods among consumers in the region, which is adding to the growth of GCC functional food market.

GCC functional food market: Hypermarkets & A-class stores are currently gaining traction in the GCC functional food market followed by other modern retail formats

Currently, the sales of functional foods through hypermarkets & A-class stores is estimated to account for the highest value share, and they are expected to remain dominant during the forecast period. The retail industry is growing at a significant rate in the GCC countries, which has enabled manufacturers to increase the availability of functional food products in hypermarkets & A-class chains, and this is promoting the growth of this segment of the GCC functional food market. On the other hand, consumer co-operatives and grocery stores are losing their popularity in the GCC functional food market across the region. Overall, these distribution channels are contributed a 28.3% share of the GCC functional food market in 2012, however they are expected to lose their share in 2020 due to higher consumer preference towards hypermarkets & A-class stores.

In-store promotions of functional food products, which include allocating budgets for generating awareness through branding, sampling or other means, tie-ups with school canteens and creating a whole new category of health foods in retail stores in co-operation with manufacturers & retailers, are among the key differentiating strategies adopted by manufacturers in the GCC functional food market. This is generating awareness and driving the overall demand for functional food in the GCC countries.

For instance, modern food retailers, such as Lulu Hypermarket, Al Maya Group, Al-Othaim Supermarket, Carrefour, Spinneys and Choithrams, are expanding in Saudi Arabia and promoting functional food.

With a rise in per-capita GDP in the Middle East region, there has been a significant increase in the purchasing power of the people. The middle-class population in the region is experiencing rapid growth, which has helped transform the country’s consumer market. Healthcare spending in GCC is expected to increase at a double-digit growth rate between 2015 and 2020 due to the rising concerns about health and wellness. Thus, rising purchasing power, coupled with increasing awareness about the consumption of fortified food products among consumers, is expected to support the growth of GCC functional food market.

For instance, the demand for yogurt/frozen yogurt in convenient packs and fresh fruity frozen yogurt has witnessed double-digit growth since 2011.

Beautiful Brands International’s (BBI) FreshBerry Frozen Yogurt Café in Makkah, Saudi Arabia, recorded sales of US$ 11,000 on its opening day.

GCC functional food market dynamics: Consumers are getting influenced by the availability of new product variants majorly in the cereals, flakes & confectioneriesas well as dairy product segments

On the basis of product type, the GCC functional food market is segmented into functional dairy products, cereals, flakes & confectioneries, iodised salt, fortified eggs, fish & meat and oil & margarine. In 2014, the cereals, flakes & confectioneries segment in the GCC functional food market accounted for almost 41% market share in terms of value. The region has witnessed an increase in the number of gymnasiums, diet centres and fitness centres, which promote the consumption of health food such as oat flakes, cereal bars and energy drinks. The robust growth of these segments can also be attributed to the novel varieties available in the functional food market in addition to customer preference for convenience foods such as yogurt, cornflakes and cereal bars. In the region, 80% of the cereal products are being imported. Cereal bars, fortified pasta, noodles and corn/oat flakes are among the functional food products in demand in GCC countries. Al Ghurair Foods, one of the country’s leading fortified or functional food product producers, set up an oat plant in UAE in February 2011 after realising that there was higher demand for oat products in the functional food market. Wheat flour fortification takes place in most of the GCC countries, however, the level of fortification is far less than that in the OECD countries, which indicates that there is scope for value addition in the fortification of cereals in GCC countries.

Functional dairy products is projected to be the second-largest segment in the GCC functional food market by 2020, and the fastest-growing one across the functional food category in GCC. It is projected to increase at a CAGR of 12.8% between 2015 and 2020. In the GCC region, most dairy products are manufactured domestically, however, the fortification trend is only limited to milk and yogurt. Some companies voluntarily fortify cheese with calcium and vitamins. Probiotic yogurts still dominate the dairy segment in the functional food market. Dubai-based Al Rawabi Dairy Co. LLC plans to launch a range of healthy fruit yogurt products after launching omega-3 fresh milk in September 2013. IFFCO launched its premium range of Noor Lite Mayonnaise in April 2014 with olive oil for health-conscious consumers and labneh to cater to the preferences of consumers for functional food products in the Middle East.

Dairy products score the highest in terms of profit margins in the functional food market. However, cold storage facilities and refrigerated vans are required to import and transport dairy products, which makes these products expensive for consumers seeking dairy-based functional food. However, the oil & margarine segment is expected to witness favourable growth rates in the GCC functional food market as the awareness about omega 3-fortified oil is rising in the region.

GCC functional food market regional analysis: In terms of value sales, Kuwait & Qatar are among the most lucrative markets for functional food as compared to other GCC countries

Regionally, the GCC functional food market is segmented into Saudi Arabia, United Arab Emirates (UAE), Oman, Kuwait, Qatar and Bahrain. Sales revenue of functional food in KSA has been estimated to account for the largest market value share of 48.3% in 2014. The country is expected to represent an incremental opportunity of US$ 1,879.10 Mn between 2014 and 2020. Sales revenue of the functional food market in the UAE was valued at US$ 1,390.5 Mn in 2014, and is expected to increase by 1.8X over the forecast period.Kuwait & Qatar are among the most lucrative markets for functional food products as compared to other GCC countries. Qatar is one of the most robust economies in the rest of the GCC, which can directly affect the per-capita food expenditure of consumers. Qatar has the highest per-capita income in GCC, which is likely to drive the buying pattern of premium health food, thus fuelling the growth of the functional food market in the country. Newer varieties of functional foods with convenient packaging has started attracting health-conscious people in rest of the GCC countries, thus transforming this niche sector into mainstream. Kuwait is expected to be the most lucrative market for functional food with a CAGR of 12.2% over the forecast period.  

Regional players are relatively highly concentrated in the GCC functional food market as compared to local functional food manufacturers

Detailed profiles of companies are also included in the GCC functional food market report to evaluate their strategies, key product offerings and recent developments. Some of the key players profiled in the  GCC functional food market study include Almarai, Danone, AL Rawaby Dairy, Pinar, Anchor, Kraft Foods, IFFCO, Nestlé, Oman Flour Mills Company, The Modern Flour Mills and Macaroni Factories, Al Ghurair Foods, Alyasra Foods, AL Jazira Poultry Farm LLC NEZO,ZAD INDUSTRIES & TRADING CO and Savola Foods. To increase the sales revenue, majority of players are focusing on generating awareness and launching new functional food product variants in the region.

This report provides a forecast and analysis of the functional food market in the GCC countries. It provides analysis on the basis of historical data and forecast from 2014 to 2020 in terms of revenue (US$ Mn). The report reveals market dynamics in seven geographic segments along with market analysis for the current and future scenario. In addition, it includes drivers, restraints and recent trends of the functional foodmarket. The report also comprises opportunities for functional food manufacturers and highlights the value chain analysis in detail. The study demonstrates the market dynamics and trends across regions that are expected to influence the current status and the future prospects of the functional food market.

The report studies the GCC functional foodmarket for the period 2014–2020. The prime objective of this report is to offer quantitative and qualitative insights and study key market trends pertaining to the GCC functional food market that gradually help transform businesses.

The market numbers have been assessed by carefully scrutinising the functional food production and the export & import scenario of all the six countries for the current year as well as the historical performance of the market. Market size and forecast for each segment in the functional food market has been provided in the context of country-level markets. All the segmentation of the functional food market has been considered after appropriate secondary research and revalidation of the data obtained through interviews with key thought leaders and industry experts. The market has been forecast based on constant currency rates. The report includes market sizingin terms of the value generated from the sales of functional food across all the countries.

The report begins with an executive summary intended to give a clear perspective about the market to the reader. It is then followed by an overview of the functional food market and provides the definition and analysis about drivers, restraints, opportunities and key trends in the functional food market. The sections that follows includes GCC functional food market analysis, analysis by product type, distribution channel and country-level analysis.  

On the basis of product type, the GCC functional food market is segmented into functional dairy products, cereals, flakes & confectioneries, iodised salt, fortified eggs, fish & meat and oil & margarine. By distribution channel, the GCC functional food market is segmented into hypermarkets/A-class stores, self-service & B-class chains, consumer cooperative & groceries and others.

All the above sections evaluate the market on the basis of various factors affecting the market as well as cover the present scenario as well as future prospects of the GCC functional food market. For market data analysis, the report considers 2013 as the base year, with market numbers estimated for 2014 and forecast made for 2015–2020. All the segmentation of the functional food market has been considered after appropriate secondary research and revalidation of the data obtained through interviews with key thought leaders in the industry. The market has been forecast based on constant currency rates.

The next section of the report highlights the market by region and provides the market outlook for 2014–2020. The study investigates the regional Year-on-Year (Y-o-Y) growth of the functional food market. Key countries assessed in this report include Saudi Arabia, United Arab Emirates (UAE), Oman, Kuwait, Qatar and Bahrain. The report evaluates the present scenario and growth prospects of the regional market for 2014–2020.

 

The functional food market numbers have been assessed based on the sales and the weighted average pricing of functional food by product & distribution channel, following which the aggregate revenue is derived through weighted average country pricing trends. The functional food market size and forecast for each segment has been provided in the context of country. The functional food market has been analysed based on the expected demand, per capita consumption and current production scenario. Pricing considered for the calculation of revenue includes average country prices obtained through primary quotes from numerous regional functional food manufacturers, suppliers and distributors. All key product types have been considered on the basis of secondary sources and feedback from primary respondents. Country-wise demand patterns have been considered while estimating the functional food consumption across the various countries in GCC. Functional food market numbers for all the countries by product type and by distribution channel have been derived using the bottom-up approach, which is cumulative of each country’s demand. The company-level functional food market share has been derived on the basis of revenues reported by key manufacturers. The functional food market has been forecasted based on constant currency rates. Given the characteristics of the market, we have triangulated the outcome on the basis of three different types of analysis: supply side analysis for functional food, demand side analysis and the impact of macro-economic factors on the functional food market. In addition, it is imperative to note that in a fluctuating global economy, we not only conduct market forecasts in terms of Compound Annual Growth Rate (CAGR), but also analyse the market based on key parameters, such as Y-o-Y growth rates, to understand the predictability of the functional food market and identify the right opportunities for players.

The market segments for the GCC functional food market have been analysed in terms of Basis Point Share (BPS) to understand the relative contributions of each segment to market growth. This detailed level of information is important for identifying various key trends in the functional food market. Another key feature of this report is the analysis of the market in terms of absolute dollar opportunity represented by the sales of functional foods. Absolute dollar opportunity is critical for evaluating the scope of opportunity that a provider can look to achieve as well as to identify lucrative segments. The overall absolute dollar opportunity represented by the functional food market is mentioned in the report. To understand key growth segments in terms of growth and adoption for functional food in GCC, FMI has developed a market “Attractiveness Index.” This index is expected to help providers identify real market opportunities. A number of primary and secondary sources were referred during the course of this study. Some of the secondary sources include IMF, World Bank, Hoover’s, Factiva, annual reports of companies, government associations and publications.

In the final section of the report on the functional food market, a “dashboard view” of the companies is provided to compare the current industrial scenario and their contribution to the total functional food market. Moreover, it is primarily designed to provide clients an objective and detailed comparative assessment of key providers specific to a segment in the functional food market. Report audiences can gain segment-specific manufacturer insights to identify and evaluate key competitors in the functional food market. Detailed profiles of companies are also included in the report to evaluate their strategies, key product offerings and recent developments. The key players of the GCC functional food market include Almarai, Danone, AL Rawaby Dairy, Pinar, Anchor, Kraft Foods, IFFCO, Nestlé, Oman Flour Mills Company, The Modern Flour Mills and Macaroni Factories, Al Ghurair Foods, Alyasra Foods, AL Jazira Poultry Farm LLC NEZO,ZAD INDUSTRIES & TRADING CO and Savola Foods.

Gcc Functional Food Market Reports - Table of Contents

  1. GCC Functional Food Market-Executive Summary

  2. Functional Food Market Taxonomy

  3. GCC Food Sector: Overview

  4. Global Functional Food Market: Overview

    • Global Functional Food Market Value Forecast, 2013-2020 ($ Bn)

    • Global &GCC Functional Food & Retail Market Y-o-Y Growth Comparisons, 2013-2020

  5. GCC Functional Food Market: Overview

    • GCC Functional Food Market Value Forecast & Y-o-Y Growth, 2013-2020 ($ Bn)

    • GCC Functional Food Market Y-o-Y Growth Comparisons, 2013-2020 ($ Bn)

    • GCC Functional Food Market Value Share, by Distribution Channel, 2012 (%)

    • GCC Functional Food Market Value Share, by Distribution Channel, 2020 (%)

  6. Market Driversand Impact Analysis: GCC Functional Food Market

  7. GCC Functional Food Value Chain Analysis

    • Food Value Chain Model

    • GCC Food Laws

  8. GCC Functional Food Market Value Share & Forecast, byCountries, (2012-2020)

  9. Relative Market Attractiveness of GCC functional Food Market, by Countries, 2014-2020

  10. Saudi ArabiaMarket Value Forecast, (2012-2020)

    • Saudi Arabia Functional Food Market Value Share, by Segment 2012-2020 (%)

    • Saudi Arabia Functional Food Market Value Share, by Distribution Channel, 2012-2020 (%)

    • Drivers: Impact Analysis

  11. United Arab EmiratesMarket Value Forecast, (2013-2020)

    • United Arab Emirates Functional Food Market Value Share, by Segment 2012-2020 (%)

    • United Arab Emirates Functional Food Market Value Share, by Distribution Channel, 2012-2020 (%)

    • Drivers: Impact Analysis

  12. OmanMarket Value Forecast, (2013-2020)

    • OmanFunctional Food Market Value Share, by Segment 2012-2020 (%)

    • OmanFunctional Food Market Value Share, by Distribution Channel, 2012-2020 (%)

    • Drivers: Impact Analysis

  13. KuwaitMarket Value Forecast, (2013-2020)

    • KuwaitFunctional Food Market Value Share, by Segment 2012-2020 (%)

    • Kuwait Functional Food Market Value Share, by Distribution Channel, 2012-2020 (%)

    • Drivers: Impact Analysis

  14. QatarMarket Value Forecast, (2013-2020)

    • QatarFunctional Food Market Value Share, by Segment 2012-2020 (%)

    • QatarFunctional Food Market Value Share, by Distribution Channel, 2012-2020 (%)

    • Drivers: Impact Analysis

  15. BahrainMarket Value Forecast, (2013-2020)

    • BahrainFunctional Food Market Value Share, by Segment 2012-2020 (%)

    • Bahrain Emirates Functional Food Market Value Share, by Distribution Channel, 2012-2020 (%)

    • Drivers: Impact Analysis

  16. GCC Functional Food Market – Competitive Landscape

    • GCC Functional Food Market – Overview

    • GCC Functional Food Market- Brand Footprint

Gcc Functional Food Market Reports - List of Tables

  1. GCC Functional Food Market Value Forecast, by countries, 2013-2020, ($ Mn.)

  2. GCC Functional Food Market Value Forecast, by product type, 2013-2020, ($ Mn.)

Gcc Functional Food Market Reports - List of Figures

  1.  GCC GDP Per Capita Projections (‘000 US$)

  2.  Per Capita Expenditure On Food In GCC, Brazil And The U.S. (Projections 2012-2014-2020) (in USD)

  3. GCC Food Retail Market Value Share, By Type, 2014& 2020 (%)

  4. GCC Functional Food Market

  5.  Global & GCC Year on Year (Y-o-Y) growth comparisons,2014 –2020 ($ Mn)

  6. GCC Functional Food Market Value Forecast &Y-o-Y Growth, 2012 – 2020 ($ Mn.)

  7. GCCFunctional Food Market Absolute $ Opportunity, 2014-2020 ($ Mn.)

  8.  GCCFunctional Food Market Value forecast &Y-o-Y Growth, by Type, 2014 – 2020 ( $Mn)

  9.  Absolute Value Growth in US$ Billion,Global & GCC (2014-2020)

  10.  GCC Functional Food Market Value Share, by Distribution Channel, 2012 (%)

  11.  GCC Functional Food Market Value-Chain Model

  12.  GCC Functional Food Market Value Share, By Countries, 2014& 2020 (%)

  13.  Relative Market attractiveness for GCC Functional Food Market

  14.   Saudi Arabia Functional Food Market Value Forecast, by Product Type, 2013-2020 (%)

  15.  Saudi Arabia Functional Food Market Value Share, By Product Type, 2014 - 2020 (%)

  16. Saudi ArabiaFunctional Food Market Value Share & Forecast of Distribution Formats, 2014 – 2020 (%)

  17.  UAE Functional Food Market Value Forecast, by Product Type, 2013 - 2020 (%)

  18.  UAE Functional Food Market Value Share, by Product Type, 2014 - 2020 (%)

  19. UAE Functional Food Market Value Share & Forecast of Distribution Formats,2014 – 2020 (%)

  20.  Oman Functional Food Market Value Forecast, by Product Type, 2013 - 2020 (%)

  21.  Oman Functional Food Market Value Share, by Product Type, 2014 - 2020 (%)

  22.  Kuwait Functional Food Market Value Forecast, by Product Type, 2012 - 2020 (%)

  23.  Kuwait Functional Food Market Value Share, By Product Type, 2012 - 2020 (%)

  24.  Qatar Functional Food Market Value Forecast, by Product Type, 2012 - 2020 (%)

  25.  Qatar Functional Food Market Value Share, By Product Type, 2012 - 2020 (%)

  26.  Bahrain Functional Food MarketValue Forecast,sby Product Type, 2012 - 2020 (%)

  27.  Bahrain Functional Food Market Value Share, By Product Type, 2012 - 2020 (%)