Gulf’s food industry can tuck in more growth

It has bucked the trend of consumers spending less where possible

The Gulf’s food industry continues to tuck into some decent growth numbers even as consumers scaled back on all non-essential purchases. And consumption is expected to expand at a compounded annual growth rate of 4.2 per cent from an estimated 48.1 million metric tonnes in 2016 to 59.2 million tonnes in 2021, according to a report issued by Alpen Capital yesterday.

“This growth is primarily attributable to increase in the consumer base coupled with a higher per capita income, as GCC economies stage a sustained economic recovery from the recent downturn,” it adds.

During the period, food consumption in Saudi Arabia is expected to grow at an annualised 4.2 per cent to 37.7 million tonnes and that in the UAE by 4.4 per cent to 10.1 million tonnes.

Stumbles

But there are challenges that come with the prospects — “regional governments’ measures such as reduction in subsidy spend and public wages, tightening of liquidity and a subdued job market, are likely to affect consumer spending power and profitability of domestic food producers.”

There are also gaps within the industry itself. “With increasing quantity of food imports, the need for setting up a robust logistics infrastructure is being felt across the region.”