GCC Economic Growth & the Flourishing Plant-Based F&B Market
GCC Economic Growth & the Flourishing Plant-Based F&B Market
Staff Writer
In this article, we will explores the thriving plant-based market within the F&B sector. The data used here is from a market assessment case study Ventures Middle East did for a client in the F&B sector. GCC economies faced unprecedented challenges due to the impact of COVID-19. However, amidst the economic downturn, the Food and Beverage (F&B) sector in the GCC region emerged as a resilient and promising industry.
Driven by rising populations, growing tourism, major events, and increased disposable income, the F&B sector is experiencing robust growth. Simultaneously, the rise in health awareness among consumers has led to a shift towards healthier food and beverage choices, particularly plant-based options.
Rise in health awareness among consumers has led to a shift
GCC Economic Overview:
Despite the adverse effects of the pandemic, the GCC region’s real GDP annual growth has rebounded and is currently surpassing pre-pandemic levels. With a growing population, which reached approximately 60 million people in 2021, the GCC economies are on the path to accelerated recovery, leading to increased consumer spending and a rise in disposable income. This positive economic outlook has created a conducive environment for the F&B sector’s growth.
Rising Health Awareness and Shifting Consumer Preferences:
The GCC region, along with the global population, is experiencing a significant increase in health consciousness. Consumers are willing to pay more for healthier food and beverage options, including gluten-free products, lactose-free alternatives, vegan choices, organic foods, and non-alcoholic beverages with functional benefits.
COVID-19 has further amplified this trend, prompting people to prioritize their well-being and opt for healthier eating and drinking habits. Consequently, there is a visible shift towards healthier food and beverage options in the GCC region.
Intensified Competition and Diverse Consumer Offerings:
The surging demand for healthier products in the GCC F&B market has led to intensified competition among businesses. To cater to evolving consumer preferences and needs, there has been a rise in the number and variety of food and beverage outlets.
As a result, consumers now have a wider range of options to choose from, further propelling the growth of the sector.
Health Concerns and Demand for Alternatives:
The region faces health complications, including diabetes, high cholesterol, high blood pressure, obesity, and cardiovascular problems. Rapid urbanization, rising obesity rates, sedentary lifestyles, poor dietary intake, and cultural habits contribute to these issues.
In response, GCC governments have launched health awareness campaigns to combat obesity, resulting in lifestyle changes and increased demand for healthier food options. Consequently, many food and beverage companies are introducing plant-based or vegan meat and dairy products in the GCC market. The rising popularity of vegan diets and incidences of lactose intolerance further drive the demand for plant-based dairy alternatives.
Functional Efficacy and Sustainability:
Plant-derived products offer functional efficacy and high sustainability claims that attract consumers seeking alternatives to conventional animal-based products. This drives the growth of the plant-based meat and dairy market in the GCC. Manufacturers are investing in creating plant-based products that mimic the taste and structure of traditional counterparts, appealing to consumers who desire healthier options. Moreover, the GCC’s booming tourism industry contributes to the growth of meat and dairy substitutes, particularly in the UAE.
Rising consumer awareness regarding the negative impact of the consumption of meat and dairy on health is leading to a shift towards a vegan diet
Innovation and Product Development:
The plant-based food and beverage market in the GCC is poised for significant innovation in the coming years. New sustainable crops will be employed to produce nutritious alternatives to dairy, with product developments such as vanilla, almond, coconut, fortified plant milk with calcium, almond with cocoa, and oat already available.
Technological advancements have allowed plant-protein alternatives like soy, peas, and nuts to closely resemble the taste and texture of meat or dairy products. Meeting the expectations of consumers accustomed to meat and dairy consumption is essential for success in the GCC market.
Younger generations are more open to innovative products, including plant-based food, creating an opportunity for local production
Local Production and Food Security:
While imported brands dominate the GCC’s plant-based products market, there is substantial potential for locally produced, high-quality offerings at lower price points. The younger generation in the GCC is more open to innovative products, including plant-based food, creating an opportunity for local production. Governments, particularly in the UAE, are supporting local production initiatives through public and private sector collaborations, aiming to achieve food security and reduce reliance on imports.
As the GCC economies continue to recover and diversify, the plant-based food and beverage sector is poised for further expansion, providing consumers with healthier and sustainable choices. You can download the free report here!
To request a report on the F&B sector or a sector of your choice, get in touch with our consultants. Ventures Middle East offers advisory services to clients helping them grow their business in the region.