Increasing Awareness on Benefit of Consuming Animal Protein Rich Diet Are the Major Factors Driving the Growth of the GCC Processed Meat Market

The Rising Demand for High Quality Meat Coupled with the Growing Consumer Inclination towards Flavored Meat Products is Expected to Drive the Market Growth During the Forecast Period 2021-2026. GCC Processed Meat Market size is estimated at $6.8 billion in 2020, projected to grow at a CAGR of 5.3% during the forecast period 2021-2026.

The GCC region’s increase in meat consumption is in line with the rising global trend of consumption of protein-rich foods particularly organic and healthy produce with a strong, branded and most often halal provenance. Most GCC countries are home for expatriates and residents from various countries. This trend has brought in food dishes from different regions across the world and has positively impacted the GCC processed meat market. The amount of fast food and restaurants have grown immensely over the past years. The leading global fast food chains are set to have branches in GCC countries, adding to the growth of the market in this region. Besides this, increasing investments in tourism industry have led to rise in the number of tourists which again influences the meat consumption in these nations. These countries host a number of events such as sports events, shopping festivals, recreational fest, film awards and more. Moreover, the infrastructural developments along with investment in tourism and hospitality industry are also contributing to huge inflow of tourist in this region. This also drives the demand of processed meat as the demand increases with the rising food consumption. Furthermore, the growing adoption of fermentation and sun drying method in the region is expected to boost its market growth.

Processed meats are similar to fresh meat that has been preserved by being salted, dried, smoked, or fermented. Since, processed meats are cooked, it decreases the number of microorganisms and extends the shelf life. The global demand for processed meat is being driven by rising meat consumption among the population. Changing lifestyle of people and increased consumption of processed food and increasing awareness on benefit of consuming animal protein rich diet are the major factors driving the growth of the GCC Processed Meat Industry. Poultry segment held the largest market share in the year 2020 owing to the growing consumption of chicken in Saudi Arabia. The consumption of poultry in Saudi Arabia is increasing in general. Burgers, nuggets, salami, and hot dogs are popular choices for lunch among the rising youth population. They're easy to keep and prepare when in urgent basis. This segment's rise can be linked to the availability of many varieties of chicken products as well as consumers' preference for white meat over red meat. The GCC countries are developing new poultry farms in order to achieve maximum meat output self-sufficiency. Since, some GCC nations have prioritized expanding chicken production to meet future increased chicken consumption, overall broiler output is likely to increase. Chicken meat consumption in Saudi Arabia was 1.33 million MT in 2019, according to a report issued by the United States Department of Agriculture (USDA) driving the GCC Processed Meat Industry.

Supermarkets and Hypermarkets segment held the largest market share in the year 2020 owing to the high-income levels, rising millennial population (nearly 37% of the estimated population in 2017 was under 25 years of age) and the expanding retail infrastructure across the GCC.  Moreover, the growing demand of high nutritional foods have increased the demand of meat and poultry in GCC countries. To increase the availability, the processed meat companies have started distributing their packaged meats to the supermarket and hypermarkets in high manner. The expanding millennial population and people's high income levels are both contributing to the expansion of this market. Processed meat businesses have begun aggressively marketing their packaged meats to supermarkets and hypermarkets in order to improve availability driving the GCC Processed Meat Industry.

Saudi Arabia contributed to the largest market share in 2020 as it remains the largest producer and consumer of food production in the GCC countries, given the nation large consumer base (60% of the regional population) and sizeable cultivable land at their disposal (80% of the total cultivable land in the region). Moreover, from 2011, food consumption in the Kingdom grew at a CAGR of 4.7% to 31.4 million MT in 2016, significantly higher than the domestic production of 9.0 million MT (+1.6% CAGR since 2011). Hence, growing food consumption in the region is expected to drive its market in the upcoming years. Furthermore, in Saudi Arabia, frozen processed meat and poultry value series increased, primarily owing to the removal of a government subsidy for domestic players, that provided support to lower the cost of imported animal feed, vaccines and equipment, in turn assisting in keeping production cost and consumer prices low locally.

It has been observed that the consumption of animal protein has various benefits than that of plant protein. Thus, with rising health awareness, consumers are opting for meat products for their protein intake. As per the Arab Organization for Agricultural Development (Sudan), the share of animal protein from the total protein supply is higher for GCC countries than for Arab countries. This implies a demand for animal proteins is high here as the animal proteins contain complete range of essential amino acids as compared to plant proteins. Moreover, people are increasing their protein intake and reducing consumption of fats, sugar and other such unhealthy substances.

The upsurging trend of fast food, takeaway and junk food has led to rise in consumption of processed meat. As disposable income rises, the food consumption pattern also varies. The consumers mostly eat out and consume processed food and meat. Rising urbanization and growth in the number of expatriates have also increased the demand for packaged and processed meat. Companies have observed a decline in the demand for processed meat that contain harmful additives and thus they have developed additive free and organic variants to stabilize their sales. Rising health concern has increased the demand of organic processed meat which is further contributing to its market growth.

In October 2019, BRF signed a memorandum of understanding with the Saudi authorities to build a proprietary plant in the country, with investments of nearly US$120 million.

The major companies in the GCC Processed Meat Market include Americana Group, Al Islami Foods, Sunbulah Group, Brf S.A., Tyson Foods, Almasa Diamond Meat Processing LLC, Cherkizovo Group, Al Munajem Cold Stores Company, Almarai and Al Khazna. In 2019,   Almarai Company completed its acquisition with Premier Foods LLC. This acquisition enhanced Almarai’s footprint for expansion in the foodservice channel.

The growing inclination of consumers towards flavored meat products have compelled manufacturer to adopt different strategies in order to expand its product portfolio which in turn is boosting its market growth. For instance, in February 2020, JBS attended Gulfood 2020, the largest annual food and beverage fair in the world, which held in Dubai. The event expects to attract over 5 thousand exhibitors from nearly 200 countries, Seara plans to launch the incredible range, offering a complete range of 100% plant based products. The company’s 300 meter booth will also showcase products from Bordon, Novaprom and other brands from JBS operations in the USA and Australia.