Packaged food is forecast to eat into the market for fresh produce this year as shoppers become more affluent and shift to convenience products.
Packaged foodstuffs wrapping up market
Across Western Europe and the US in the 1970s, it was all the rage to own a microwave and sit in front of the TV with a processed dinner.
The Middle East has never quite given up fresh food to the same degree, but packaged food is forecast to eat into the market for fresh produce this year as shoppers become more affluent and shift to convenience products.
Sales of packaged and processed foods to retail stores and food providers is set to increase 11 per cent to US$51.9 billion (Dh190.63bn) across the Middle East, above the level of growth in fresh food, according to the research company Euromonitor.
"Packaged food is slowly eating away at fresh food across the Middle East," said Lee Linthicum, the head of global food research at Euromonitor. "People have been eating fresh and unprocessed food in the region for years; it's now that there's a shift from unprocessed to processed."
More developed markets for packaged-food processers and retail outlets, such as the UAE, will also see growth in processed food as shoppers become more time conscious and seek convenience.
Packaged food will grow 8.8 per cent this year in the UAE, above the rate of the overall market, according to Euromonitor, and benefiting major consumer goods companies exhibiting at Gulfood this week. Mark Napier, the director of the Dubai World Trade Centre and organiser of Gulfood, says processed food and packaging companies have been among the biggest-growing segments represented at the event in recent years.
"In the last two editions, [the number of] companies in our processed and packaged halls have grown by 300 per cent," he said. "I think that's a reflection of the market and describes the opportunity for companies."
The Middle East is a growing market for international consumer goods and packaged food companies that are investing in offices and infrastructure in the region, particularly in Saudi Arabia.
Mars, a food and confectionary company, announced an initial investment of $60m in a new facility in Saudi Arabia, with an additional $150m planned over the next 10 years. Meanwhile, Coca-Cola recently invested nearly $1bn in the Saudi company Aujan industries, and Unilever expanded its factory operations in Jebel Ali last year.
The UAE Government has invested in local food processing and packaging units, and there are now more than 150 companies in operation, expecting to expand production.