The Middle East & Africa specialty food ingredients market is projected to grow at a CAGR of 2.5% during the forecast period (2020 - 2025).
- The market is majorly driven by the rising demand for processed food products including various categories, such as ready meals, baked foods, breakfast cereals, confectionery, and non-alcoholic beverages. These specialty food ingredients are a vital part of a wide range of processed foods, thereby contributing to competitiveness in the food and beverage industry.
- Furthermore, the demand for convenient foods has recorded robust growth, owing to changing lifestyles and dietary preferences, which is, therefore, fueling the specialty ingredients market.
- However, the regulatory constraints regarding the authorization and approvals are the major factors restraining the market growth for specialty food ingredients.
Key Market Trends
Rising Demand For Functional Food Ingredients
Functional food ingredients are fortified with ingredients to enhance their basic nutritional values. The increase in consumption of nutritive convenience food and fortified food and the growth in health awareness among consumers is driving the functional food ingredients segment. Rapid advancements in technology and companies’ efforts in trying to develop products with multifunctional applications are driving the functional food ingredients segment of the market studied. For instance, in August 2017, ADM expanded its portfolio of plant-based functional extracts to include green tea, an antioxidant blend, and acerola. This helped the company in expanding its portfolio of naturally occurring nutritional ingredients. Moreover, to expand the company’s brand presence and increase their consumer base, manufacturers are partnering with other companies and retailers.
Saudi Arabia to Dominate The Regional Market
The specialty food ingredients market in Saudi Arabia was reported to dominate the regional market in 2019. Most Saudi food manufacturers depend on imports to secure their needs of food ingredients and raw materials. However, attractive investment conditions (such as revised Saudi Foreign Investment Act (FIA) which allows foreign investors to wholly own food production facilities or partner with Saudi nationals or companies) have lured some multinational corporations to establish production facilities in Saudi Arabia. For instance, in 2018, Cargill opened a new corn milling facility with the help of Arasco to fulfill the demand of the food and beverages industry in the country. Furthermore, the Saudi food manufacturing and processing sector has rapidly grown in the past ten years, mainly due to the growing support from the Saudi government which boosted investment in the food and beverage production sector and increased the number of food processing factories in Saudi Arabia, from 737 units in 2007 to 1,018 units in 2016, an increase of about 38%.
The Middle East & Africa market for specialty food ingredients is fragmented, owing to the presence of large regional and domestic players in different countries. Emphasis is given on the merger, expansion, acquisition, and partnership of the companies along with new product development as strategic approaches adopted by the leading companies to boost their brand presence among consumers. Key players dominating the regional market include Cargill, Incorporated, Tate & Lyle PLC, DuPont, ADM, and DSM among others.
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