Sector Trends Analysis - Meat trends in the Gulf Cooperation Council (GCC)

Contents

Gulf Cooperation Council trends

The six Gulf states that constitute the GCC produce oil and gas, have the highest standards of living in the Middle East and are relatively stable and wealthy. Traditional independent retailers selling halal meat remain important shopping destinations in developing markets with low proliferation of modern retail formats, such as supermarkets, convenience stores and discounters. Anyone interested in exporting halal products to the GCC should have an understanding of the halal certificates required and that they need to work with an accredited halal certification body. For example, for the UAE, any product labelled halal needs to be accompanied with a halal certificate from an accredited halal certification body. The Emirates Authority for Standardization and Metrology is the authority in the UAE responsible for overseeing halal. Anyone interested in exporting halal products to the GCC should have an understanding of the halal certificates required and that they need to work with an accredited halal certification body. For example, for the UAE, any product labelled halal needs to be accompanied with a halal certificate from an accredited halal certification body. The Emirates Authority for Standardization and Metrology is the authority in the UAE responsible for overseeing halal.

The average gross income in the GCC was US$18,955 in 2016, higher than the average gross income in the world (US$13,164). This high income has created a high demand for imported goods and foods. In fact, almost 90% of foods are imported due to the agricultural limitations of the region.

Euromonitor International indicates that the GCC is a fast growing market, with consumer spending on food and non-alcoholic beverages reaching US$100 billion in 2016.

Increasing urbanization in the GCC countries, diversified lifestyles, growing popularity of large modern food retail formats and the presence of multinational food companies in the region, are the main factors in increasing the popularity of convenience foods among consumers. Moreover, the affluent local population has shifted its consumption patterns from a carbohydrate-based diet to protein-based diet. This has increased the demand for meat, meat products and health and wellness products.

In addition to the domestic consumption, the GCC is now among the world’s top tourism destinations. The United Arab Emirates is amongst the top ten destinations and the most popular in the Arab World according to the United Nations World Tourism Organization. Dubai’s Department of Tourism and Commerce Marketing (Dubai Tourism) released its annual visitor figures showing that Dubai attracted 14.9 million overnight visitors in 2016, recording a 5% increase over 2015, and a compound annual growth rate of 8% from 2012 to 2016.

Sales of meat in the GCC countries

The total volume sales of meat (beef and veal, lamb, mutton and goat, poultry and other halal meat) in the GCC increased to 2.55 million tonnes in 2016 from 2.15 million tonnes in 2012. Saudi Arabia had the highest total volume sales of meat: 1.46 million tonnes in 2016, representing 70.7% of the total volume sales in the GCC. This is mainly due to its large population (31.7 million), representing 60% of the total GCC population (53.1 million).

Saudi Arabia is expected to continue to take the lead in the forecast total volume sale from 2017 to 2021, followed by the United Arab Emirates. All GCC countries are expected to have steady increase in the next five years. This presents a great opportunity for Canadian meat suppliers.

Among the top three meat products sold in the GCC, poultry is ranked the first based on both historical and forecast sales. Saudi Arabia’s total volume sales of poultry reached 1.2 million tonnes in 2016, representing 62% of the total poultry sales in the region: 1.9 million tonnes. Qatar had the highest compound annual growth rate of 10% from 2012 to 2016 and is predicted to have the highest compound annual growth rate of 9% from 2017 to 2021 in the total volume sales of poultry.

Saudi Arabia had the highest total volume sales of beef and veal meat in 2016: 125 thousand tonnes, representing 46% of the total in the GCC and it is expected to lead the sales in the future. Qatar and Oman enjoyed the same 9% compound annual growth rate from 2012 to 2016, and Qatar is forecast to have the highest compound annual growth rate of 9% among all GCC countries from 2017 to 2021.

Saudi Arabia had the largest total volume sales of the lamb, mutton and goat meat in 2016: 148.1 thousand tonnes, accounting for 45% of the total volume sales in the region. Oman had the highest compound annual growth rate of 9% from 2012 to 2016. Kuwait is forecast to have the highest compound annual growth rate of 10% from 2017 to 2021.

Spending and consumption

The top two countries consuming poultry per capita were Kuwait with 43.3 Kg and the United Arab Emirates with 37.8 Kg in 2016.

Population increase, growing tourism and transit passengers passing through GCC countries and active Hotel, Restaurants, and Institution (HRI) sectors contribute positively to increasing poultry consumption.

Kuwait was the biggest consumer of beef and veal meat in GCC countries with 12.6 Kg per person in 2016.

Kuwait was also the biggest consumer of lamb, mutton and goat meat with 11.2 Kg per person followed by the United Arab Emirates with 9.8Kg in 2016.

Top foreign suppliers of meat and meat products to the GCC

The total exporting value of meat and meat products to the GCC countries reached US$4,438 million in 2016. Brazil, Australia, India, the U.S and France are major players. Although Canada was the twelfth largest meat supplier to the GCC in 2016, its compound annual growth rate was 63% from 2012 to 2016, the second highest increase after South Africa and Jordan, both with a compound annual growth rate of 150%. Canada’s share represents 0.5% of the region’s total meat imports in 2016.

Frozen/fresh/chilled poultry was the biggest GCC’s import: US$2,671.9 million, representing 60% of the total meat imports in 2016. Frozen beef had the highest compound annual growth rate of 11% from 2012 to 2016 as seen from the table below.

Saudi Arabia imported the largest amount with a value of US$1,947.9 million in 2016, representing 45% of the GCC’s total meat imports worth US$4,438.4 million in 2016. Saudi Arabia and the United Arab Emirates were the major importers accounting for nearly 74% of meat imports in the region in 2016. Qatar had the highest compound annual growth rate of 7% from 2012 to 2016.

Competitive landscape

The GCC region is a significant poultry meat market, a destination for over 11.2% (US$2,671.9 million) of world exports in 2016 (US$23, 770.8 million). Over half of the shipments were sent to Saudi Arabia while a quarter went to the UAE in 2016. Demand for poultry meat imports is strong for two main reasons: low domestic production, and re-exports.

Among the top ten meat suppliers, poultry meat was the largest supplied product of the five suppliers (Brazil, United States, France, Argentina and Jordan). Meat of sheep and goat was the largest supplied product of the three suppliers (Australia, New Zealand and Ethiopia) between 2015 and 2016. Canada was the twelfth largest meat supplier to the GCC with the frozen beef being the leading supplied product from 2015 to 2016.

Livestock trends

The food consumption pattern is steadily changing from carbohydrate-based staple foods (such as cereals) to protein-rich diets including meat and dairy products. This pattern combined with growth in population and visitors alike, are boosting the demand for livestock products.

The available data from the Food and Agriculture Organization of the United Nations (FAO) shows that bovine, sheep, goat and poultry production numbers are increasing year-over-year by an average of 9% per year.

Saudi Arabia was the largest producer of poultry in the region in 2014. Its production covers about 70% of poultry flock in the GCC. Saudi Arabia was also the largest producer of goat and sheep, and second- largest producer of beef cattle in the GCC.

Iran, Jordan and Australia were the top three live animal suppliers to the GCC: US$467.6 million in 2016, accounting for 60% of the total live animal supply worth US$787.7 million to the GCC. Canada was the twenty-sixth top live animal supplier in 2016 with a value of US$606,667 in 2016. Iran had the highest compound annual growth rate of 60% from 2012 to 2016.

According to Tamer Qarmout's article: “Can more meat go to the Middle East?”, Canada is lagging compared to other competitors when it comes to beef and livestock exports to the region. Canada being one of the world’s leading countries in beef and agriculture produce, technologies and research can help in building the much-needed regional capacities in agriculture research and development. Canada can develop mutually beneficial relations with the GCC and research entities aimed at developing scientific and research-based agricultural practices and best solutions. Such co-operation can take place in two ways: by facilitating Arab investments in the livestock and beef production sector in Canada, and by helping the governments in the region to acquire necessary skills and capacities in this sector.

Conclusion

The GCC has an increasing population, limited local agricultural production, a growing demand for imported food products, and a strong re-export market. Canadian agri-food products are perceived as being high-quality and safe.

The GCC countries demand for halal meat in particular, continues to rise both in quantity and quality. With local meat supply and herd expansion being constrained by arid land, feed and water shortages, the GCC will continue to import a significant proportion of meat from the world.

For more information

International Trade Commissioners can provide Canadian industry with on-the-ground expertise regarding market potential, current conditions and local business contacts, and are an excellent point of contact for export advice.

• Overview of Trade Commissioner Services in the MENA region
• Find a Trade Commissioner

For additional intelligence on this and other markets, the complete library of Global Analysis reports can be found on the International agri-food market intelligence page, arranged by region.

For more information on the 2018 Gulfood exhibition in Dubai, please contact:

Ben Berry, Deputy Director
Trade Show Strategy and Delivery
Agriculture and Agri-Food Canada
ben.berry@canada.ca

Resources

• Euromonitor International (2015), Halal Boosts Fresh Meat Performance
• Euromonitor International (2017), Income and Expenditure Dashboard
• Emirates 24/7 News (2017), Dubai welcomes record 14.9m overnight visitors in 2016
• Food and Agriculture Organization of the United Nations (FAO), 2017
• Global Trade Tracker 2017
• Pew Research Center’s Forum on Religion & Public Life, 2011, The Future of the Global Muslim Population Projections for 2010-2030 (external PDF)
• Qarmout, Tamer (2016), Can more meat go to the Middle East?

Sector Trend Analysis - Meat Trends in the Gulf Cooperation Council
Global Analysis Report

Prepared by: Hongli Wang, Market Analyst

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