The healthy foods industry may be in a holding pattern in the Western world, but one region where industry is booming is the Middle East.
According to a new report by Frost and Sullivan, the total health food market in United Arab Emirates (UAE) and Saudi Arabia (KSA) brought in $374 million in 2009, and is growing at a rate of 11.8 percent year on year.
UAE and KSA are part of the larger region known as the Gulf Cooperation Council – or GCC – which also includes Kuwait, Bahrain, Qatar and the Sultanate of Oman.
"The health foods and beverages market is at burgeoning stage at present, but is expected to witness an increase in the forthcoming years due to the specific health benefits they offer," said Srividyaranjani Venkatasubramanian, research associate and author of the report "Strategic Analysis of GCC Health Foods and Beverages Market." "The demand for health foods and beverages in the developing countries is growing, presenting a lucrative opportunity for developing these domestic markets."
In the food segment, breakfast cereal is the fastest-growing product category. Healthy bakery stood at 3.95 million metric tons per annum (MTPa) in 2009 and the breakfast cereals market stood at approximately 42,050 MTPa. Healthy breakfast cereals in particular is expected to grow at 15.3 percent over the forecast period.
Comparatively speaking, health beverages are growing at an even faster rate, attracting both domestic and global players. "Sports and energy drinks, soy beverages, fruit beverages and malted health beverages are fast-growing segments," Srividyaranjani said. "These fortified health beverages make their appeal through their diet supplementing, revitalizing functions and the convenience of their packaging."
The total health beverages market in UAE and KSA was around 1,570.0 million liters. Soy beverages, and sports and energy drinks, are emerging segments and are expected to witness strong market growth in the long term. Malted health beverage is typically a fast-growing segment; however, the flavored milk market is comparatively mature in terms of market growth.
One challenge in the region is quality control. "The industry is struggling for greater self regulation in an effort to improve product standardization," Srividyaranjani explained.
The GCC industry is largely dependent on imports and tends to closely follow import regulations of the Food and Drug Administration and European Union directives. When, for example, the FDA recently approved health claims for soy, it significantly boosted sales for soy-based products in the GCC, Srividyaranjani said.