Rising population fuels demand for processed food in the Middle East

A rapidly rising population and greater levels of urbanisation in the Middle East have boosted demand for processed food products to about double the global rate for the industry, according to a leading manufacturer of food ingredients.

DuPont, the US chemical producer, is forecasting double-digit growth annually in its nutrition and health business in the Middle East, a senior executive said.

“It is above the average growth rate for the industry, due to increased demand for processed foods, growing population and an increasing consumer trend towards health and wellness,” said Craig Binetti, the president of DuPont Nutrition and Health. “We are very excited about the opportunities in the Middle East and this is an important area for our business for the future.”

The average growth rate for the food ingredients industry globally is 5 to 6 per cent a year, according to Mr Binetti.

The population of the Arab countries has almost tripled since 1970, rising from 128 million to 359 million in 2010 and it is forecast to reach 598 million by 2050, increasing by two thirds, according to the United Nations.

At the same time, the world has to produce 70 per cent more food to feed the additional inhabitants by 2050, according to the UN food and agriculture organization (FAO). It forecasts the current global population of about 7.2 billion to rise to 9.6 billion by 2050.

Food security is a key issue for the UAE, where reliance on food imports has risen to more than 90 per cent amid a rise in global food prices. The Government began targeting the accumulation of strategic reserves of commodities such as wheat, rice, flour, sugar and coffee to hedge against risks caused by fluctuation in prices or bad weather. A key step in that process has been the building in Fujairah of grain silos, capable of storing 275,000 tonnes of wheat and rice.

Du Pont, which is diversifying into food and energy, has seen demand for its protein, fibres, stabilisers, emulsifiers and other food ingredients that go into the manufacturing of processed food in the Middle East, grow over the past few years.

“We are seeing food retailers growing and expanding in the region as they respond to increasing demand – as a result, there is an increase in processed foods consumption, accounting for 50 per cent of total food sales in the region,” said Mr Binetti.

Sales of its Du Pont’s health and nutrition unit globally grew 39 per cent last year to US$3.4 billion from a year earlier. The firm’s total sales in 2012 reached $34.8bn, up 3 per cent from 2011.

Growing rates of obesity and diabetes are also driving food manufacturers to produce more healthy products.

The Arab world, particularly the Gulf, suffers from high obesity rates, as high as 42.8 per cent of the population in Kuwait, according to a report from the FAO.

“There are also increasing rates of obesity – rates have increased threefold over the last three decade,” said Mr Binetti. “The region is also grappling with diabetes with close to 13 per cent of the population with some form of diabetes. With levels of obesity and diabetes increasing, we are seeing definite trends towards more healthy food options.”

“Matching the increasing focus on health and wellness, we are seeing strong interest in probiotics for digestive health. Also stabilisers is a key growth area for us.”

Food wastage – not just a problem facing the Middle East – is acutely felt in the region because of the extreme weather conditions. Extending the shelf life of food and food safety is a top issue.

“There is an opportunity to work collaboratively on food protection from shelf life extension to safety … packaging and ingredients offerings,” said Mr Binetti.

business@thenational.ae