Functional Food Market to Reach US$ 9.07 Bn by 2020, GCC Industry Analysis : Future Market Insights
Aggressive marketing by manufacturers, growing health issues, widening the span of distribution channels and Inclination towards novel and processed food varieties are some of the major drivers of the functional food market growth in GCC.
Future Market Insights (FMI) announces the release of its latest report titled, “GCC Functional Food, Market Opportunity Assessment; 2015 to 2020 Forecast”. According to the report, the GCC functional food market was valued at US$ 4.8 Bn in 2014, and is expected to reach US$ 9.07 Bn by 2020. The GCC functional market is projected to demonstrate a significant CAGR of 10.9% during the forecast period. This growth is attributed to increasing obesity and diabetes rates in the GCC region.
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The GCC functional food market is driven by factors such as increasing awareness about health benefits, consumer preference towards health food, change in life-style, wide assortment and visibility of health products. Furthermore, growing population, increasing per capita income, and growing population of expatriate will further drive the GCC functional food market over the forecast period.
According to the product type, the GCC functional food market is segmented as functional dairy products, cereals, flakes and confectionary, iodinated salt, fortified eggs, fish and meat, and oil and margarine. Cereals, flakes and confectionary segment collectively accounted for US$ 4.89 Bn with 41.7% of the total revenue market in 2014, and are expected to hold 44.8% of the total revenue market by 2020. Furthermore, Arab consumer are more inclined towards carbohydrate rich diet, but gradually they are shifting towards protein rich diet. This shift has led the demand for frozen yogurts among Arab consumers along with fortified cheese and low fat spreads during the forecast period. Henceforth, dairy is another prominent segment in GCC region.
The GCC functional food market is segmented on the basis of end-user such as hypermarket or A-class stores, self-service and B-class chains, consumer co-operatives and groceries, and others (convenience store, discount stores, and food and drug stores). Change in consumer buying pattern from traditional to modern retail formats has improved the consumer ability to buy off-the-shelf products as well as new health food categories. As a result, modern retail formats accounted for over 60% of the total market share in 2012, and this segment is expected to dominate the GCC functional food market by 2020. Others segment accounted for 8.8% of the total market of US$ 4.43 Bn in 2013, and is also expected to contribute significantly to the distribution of GCC functional food market over the forecast period.
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By geographies, the GCC functional food market covers six countries include Saudi Arabia, United Arab Emirates (UAE), Oman, Kuwait, Qatar, and Bahrain. Among all the countries, Saudi Arabia and UAE together accounted for US$ 3.3 Bn with more than 75% of the total revenue market in 2013, and are projected to dominate the market over the next five years. Moreover, UAE is the largest market for new product launch as 80% of the food is being imported in GCC. Government support in terms of providing subsidies to fortified food manufacturers is another factor which will drive the GCC functional food market in the near future. The growing adoption rate of health and fortified food is higher in regions such as UAE, Qatar, and Kuwait. As a result, Kuwait is expected to exhibit a fastest CAGR of 12.2% during the forecast period, followed by Qatar.
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