GCC FOOD CONTRACT MANUFACTURING MARKET

GCC Food Contract Manufacturing Market is projected to rise at robust CAGR owing to growing population, rapid urbanization and the rising income levels, government’s objective to achieve food security.

To improve efficiency and to increase productivity, many companies start to collaborate with another companies for food and beverage products manufacturing as they place focus on other business priorities such as sales and marketing. The cost-effectivity, technological advancements, and legal compliance have contributed to fostering the growth of the food contract manufacturing market. As more companies recognize the importance of this scheme, there is a growing demand for the food contract manufacturing market, including in the GCC region.

Major GCC Food Contract Manufacturing Market Drivers and Emerging Trends

There has been substantial growth in GCC food contract manufacturing market due to various factors, such as urbanization and the expansion of the food industry. The rapid urbanization and the rising income in the United Arab Emirates can boost the demand for convenience foods, which can drive the growth of this market. The country’s robust tourism industry has also driven the expansion of the restaurant industry which leads to manufacturers providing a wide range of products to meet varied preferences. In addition, as many consumers seek healthier food, there is an increasing need for food contract manufacturing market to meet the growing demand in the region.

 GCC has been witnessing a surge in its food consumption due to the growing population in the region which is dominated by young working professionals. Furthermore, the economic stability and reemergence of the tourism industry can increase per capita income which leads to higher food consumption in the region. The regional government has also launched multiple programs to secure sustainable food supply to accommodate the growing demand, which will further drive the growth of GCC food contract manufacturing market. 

In 2021, Saudi Arabia’s food production hit 10.9 million MT, and the food shortage has decreased in the last five years owing to the country’s strategies to promote agricultural self-reliance. The country has seen changing situation on its food imports as there are several trade policies imposed in recent years, mostly regarding poultry products and the termination of import subsidy programs. 

In the UAE, the government has deployed several initiatives to support innovation to boost domestic production in specific commodities. Meanwhile, even though Kuwait heavily relied on imports to meet its consumption demands, there was a drop in imports in 2021 while self-reliance ratio increased in the same year.

There has been a rising recognition among GCC countries regarding the importance of food infrastructure development to improve food security and minimize imports, as the governments want to diversify revenue sources away from oil. These countries have deployed policies and initiatives, such as the new construction of food processing plant projects, to be able to meet the robust consumer demand for convenience foods in the region. Saudi Vision 2030 and Food Security Strategy in UAE will further promote the food processing sectors to fuel economic development and self-reliance. Several international players also seize the opportunity by setting up manufacturing plants, such as Nestle in Saudi Arabia and Kellog’s in UAE.

Technological advancements such as the integration of digital technologies and the improvement of manufacturing processes can further foster the expansion of food contract manufacturing market in the region. As there is a rising concern regarding environmental issues and the need to reduce carbon footprint, this food processing scheme can be a favorable solution. However, high initial cost for the equipment installation or constructing food processing plants can be a challenge for the growth of this market in some countries. In addition, the limitation in infrastructures along with the disruption in the supply chain and policy inconsistency can further hinder the expansion of food contract manufacturing market in the GCC region.

Segments covered in the Report:

The GCC Food Contract Manufacturing Market has been segmented on the basis of Service and end-use. Based on the service, the market is segmented into manufacturing, packaging, custom formulation & R&d. Based on the end-use, the market is segmented into dietary supplement, dairy products, convenience foods, bakery products, confectionery, others.

Market Segmentation

GCC Food Contract Manufacturing Market by Service

• • Manufacturing
  • Packaging
  • Custom Formulation & R&D

GCC Food Contract Manufacturing Market by End-Use

• • Dietary Supplement
  • Dairy Products
  • Convenience Foods
  • Bakery Products
  • Confectionery
  • Others