Charting healthy growth: All the updates from Gulfood
With food security high on the UAE’s agenda, local F&B operators are investing heavily in innovation and new technologies, as was evident at the annual Gulfood exhibition in Dubai. What comes next?
Navigating through the crowds at the annual Gulfood event, a showcase of the regional food and beverage trade business, it was evident that any perceived slowdown in the global economy was not on anyone’s mind. From the launch of a new energy drink manufactured in Dubai – which aims to go global, to the introduction of sustainable packaging and new food alternatives, the show was a barometer of the evolving and fast-growing industry.
“Basically, food is considered one of the defensive sectors. So the resilience of the sector will always remain. Despite the ongoing trade tensions worldwide, food has proven to maintain stable prices,” explains Yousef Al Sadi, head of Risk Underwriting, Middle East at credit insurance company Euler Hermes.
However, the recent coronavirus outbreak, which has already led to a drop in oil prices and will impact sectors such as airlines, transportation and tourism regionally in the short term, is also set to affect the entire supply chain and commodities in the longer-term, he opines. While the direct impact may not be significant on the GCC’s food industry, it could see a bearing. “The GCC is a big importer of food – it imports approximately 90 per cent of its supplies. I’m sure some part of the supply chain at some point is connected either through China or Hong Kong or Singapore,” states Al Sadi.
But it is precisely to avoid any major disruptions in its food supply chain that the GCC – and the UAE specifically – is investing heavily in food security. Appointing its first minister for Food Security in 2017, the Emirates has announced a national goal of becoming the world’s best in the Global Food Security Index by 2051 and among the top 10 countries by 2021 (it ranked 21 in 2019, up from 31 in 2018).
Taking to the stage at Gulfood, Mariam Hareb Al Mheiri, minister of state for Food Security, said the UAE was focused on diversifying its food import sources; developing a sustainable food production process locally through the use of technologies; seeking to improve nutrition; and introducing policies to reduce waste.
The end result that the 2051 strategy is geared towards achieving is “zero hunger by ensuring access to safe, nutritious and sufficient food all year round throughout the world”. It specifically aims to implement resilient agricultural practices that increase productivity and help maintain ecosystems.
“We looked at what can we grow domestically that is commercially viable. For instance, when we grew wheat, the price was so expensive, no one would buy it. So far, vegetables, greens, some fruits, also fish and goat cheese [have proven to be viable],” Al Mheiri explained. There are several examples in the market, including Pure Harvest Smart Farms – which grows hydroponic tomatoes, Fish Farm – which produces salmon in the UAE and Badia Farms – which operates the GCC’s first indoor vertical farm.
But there is still a long way to go. “If you look at the self-sufficiency rates, it is at low levels [in the GCC for food necessities and commodities]. The UAE, in particular, has secured a high percentage for some kinds of vegetables mainly tomato, cucumber, as well as dates and dairy. They are also investing in different initiatives to improve food security,” states Al Sadi.
Healthy growth
According to Alpen Capital, food consumption in the GCC is expected to grow at a compound annual growth rate (CAGR) of 3.3 per cent, from an estimated 51.5 million metric tonnes in 2018 to 60.7 million metric tonnes in 2023. A rising population, increased tourism, high per capita income and a sustained economic recovery are likely to drive the growth of the food sector in the region, the report stated.
Being the staple food of the region, cereals are expected to remain the most consumed food category with a share of 48.2 per cent by 2023. Increasing demand for milk products will drive the growth of the dairy sector while consumption of egg, fish, potatoes and fats and oil are also set to grow. The report also found that the consumption of healthy and organic food is likely to increase with growing awareness. In the GCC, Saudi Arabia and the UAE are expected to remain the largest food consuming nations with their combined share estimated to reach around 81 per cent by 2023. The food consumption for the UAE and Saudi Arabia is estimated to reach 10.3 million metric tonnes and 39 million metric tonnes by 2023, respectively. “The forecasted growth rates largely reflects the
Food consumption in the GCC is expected to grow at a compound annual growth rate (CAGR) of 3.3 per cent
Strong appetite