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Premiumisation to drive GCC frozen meat mkt in 2019
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Friday, 01 February, 2019, 08 : 00 AM [IST]
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Mithun Appaiah
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Meat is an inseparable part of Middle-Eastern cuisine. In fact, people say that Arab cuisine was born in the tents of the nomadic tribes of the desert. To survive the harsh elements of the desert, for millennia, these tribes from the Arabian Peninsula relied heavily on a diet of meat. And decades later, meat still continues to be a staple and one of the largest imports of this region.
Lack of arable land
Acute water shortage and the lack of arable land make the GCC (Gulf Cooperation Council) countries, home to some of the world’s richest population in terms of per capita wealth, largely dependent on food imports. Of this, processed and frozen meat form a major part.
A 2016 report on the Middle-Eastern food sector stated, “The GCC produces only 30 per cent of its food requirements, and imports the remaining 70 per cent, worth over $150 billion, annually. In fact, MEED reported that the GCC’s food import bill will cross $53.1 billion by 2020, and the region’s meat consumption is expected to cross 4.3 million tonne by 2019 (Alpen Capital).
Food consumption in the GCC is changing, thanks to surge in the region’s population and societal changes, such as working women, in addition to increasing income per capita and booming tourism industry.
Additionally, the rise in urbanisation, busier lifestyles, the growing popularity of large modern food retail formats and the presence of multinational food companies are also driving the popularity of convenience foods among consumers.
Frozen processed meat
The demand for frozen meat products is significantly rising owing consumption of hot dogs, salami, franks, and burgers among the young population of the region. And also the fact that frozen processed meat products can be conveniently stored and easily prepared when needed which is driving the preference.
Furthermore, the wealthy local population has consumption patterns from a high carb-based diet to a protein-based diet. This has increased the demand for meat and meat products and health and wellness products in the region.
With the preference for healthier meat rising, poultry is gaining momentum and with it the demand for frozen options. Widespread health awareness campaigns are being credited with driving demand for healthier food as many consumers now pay more attention to their diets.
And there is also the rising demand for organic. Agriculture consultancy Clarity has estimated that the region’s demand for organic food indicated a market worth about $1.5 billion by 2018. This, in turn, has led to an increase in the number of food companies vying for a share of a market that is increasingly seeking healthy and trusted food sources.
Globally spending on Halal F&B is expected to reach $1.93 trillion by 2020. With over 56 million people living in the GCC countries and predominantly Muslim, the demand for Halal meat is ever increasing and the opportunity for frozen food players is huge.
Though the lack of a global standard means there is confusion surrounding what qualifies as Halal. That is why supplying Halal frozen meat to the region is, therefore, a far more complex task than one might imagine.
Premiumisation of frozen food products is emerging as one of the key emerging trends in the frozen food market, particularly in Europe. The general consumer perception about premium products is that they are made using high-quality ingredients and are better than ordinary products is accelerating the sale of premium frozen food products.
The frozen food players in the market are also introducing new products to tap the potential offered by the growing demand for premium frozen food products. This trend is gaining momentum in larger GCC markets like the United Arab Emirates (UAE) and Saudi Arabia.
Owing to high income levels and rising affluence, consumers in these markets on average spend more on premium and gourmet products than equivalent households in the United States, Japan, the United Kingdom, Korea and China.
Innovation will be a key driving factor as frozen food companies need to blend health with taste and convenience. As the demand for 100 per cent natural and products with no preservatives, free of monosodium glutamate (MSG), trans fat, sugars, food fillers, food colouring, mechanically deboned meat (MDM) or gluten rises, frozen food players will need to offer highly nutritious and made from a healthy blends of halal meat while innovating unique products, the likes of which have never before been seen in the market to stay relevant and competitive.
(The author is chief executive officer, Sumeru)
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