June 14, 2024

GCC Dairy Market Outlook

According to the report by Expert Market Research (EMR), the GCC dairy market size attained a value of USD 10.49 billion in 2023. Aided by the increasing demand for dairy products and the growing applications of dairy in various industries, the market is projected to further grow at a CAGR of 5.3% between 2024 and 2032 to reach a value of USD 16.70 billion by 2032.

Dairy products, derived primarily from cow, goat, and camel milk, are a staple in many diets around the world. They include items such as milk, cheese, yoghurt, butter, and ice cream, each playing a significant role in nutrition, culinary applications, and food processing industries. The GCC (Gulf Cooperation Council) countries, which include Saudi Arabia, UAE, Kuwait, Oman, Qatar, and Bahrain, have a burgeoning dairy market driven by factors such as rising disposable incomes, increasing health consciousness, and an expanding population.

Market Drivers

The primary driver of the GCC dairy market is the increasing consumer preference for nutritious and high-protein food products. As awareness of health and wellness grows, there is a significant shift towards incorporating dairy products into daily diets due to their rich nutritional profile, which includes essential vitamins, minerals, and proteins.

Furthermore, the rising expatriate population in the GCC countries has diversified consumer preferences, leading to a higher demand for a variety of dairy products. This demographic shift has encouraged the introduction and acceptance of a wide range of dairy offerings, from traditional items to more innovative and exotic products.

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Industry Applications

Dairy products in the GCC market cater to various segments, including retail, food service, and industrial applications. In the retail sector, dairy products are available in multiple formats such as liquid milk, cheese slices, yoghurt packs, and butter tubs, providing convenience for household consumption. The food service sector, encompassing hotels, restaurants, and cafes, benefits from the high demand for dairy-based dishes and beverages.

Additionally, the industrial sector utilizes dairy products in food processing and manufacturing. Dairy ingredients such as whey protein, casein, and milk powder are integral in producing bakery items, confectionery, infant formula, and ready-to-eat meals. The versatility of dairy products in enhancing texture, flavor, and nutritional value makes them indispensable in various food applications.

GCC Dairy Market Trends

Several key trends are shaping the GCC dairy market. One notable trend is the growing demand for organic and natural dairy products. Consumers are increasingly seeking out products free from artificial additives, hormones, and antibiotics. This trend is driven by health concerns and a preference for more natural and wholesome food options, leading to the introduction of organic milk, cheese, and yoghurt in the market.

Another significant trend is the rising popularity of functional and fortified dairy products. With the increasing focus on health and wellness, consumers are looking for dairy products that offer additional health benefits, such as probiotic yoghurts, calcium-fortified milk, and protein-enriched cheese. These products cater to specific health needs such as digestive health, bone strength, and muscle recovery.

The market is also witnessing a surge in demand for flavored and specialty dairy products. Traditional dairy items like plain milk and yoghurt are being complemented by a variety of flavored options such as strawberry, vanilla, and chocolate, as well as unique regional flavors like saffron and cardamom. Specialty cheeses, including artisanal and gourmet varieties, are gaining popularity among consumers seeking premium and exotic food experiences.

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GCC Dairy Market Segmentation

The GCC dairy market can be divided based on by flavour, by category, by product type, end-use, sales channel and region.

Breakup by Product

  • Fluid Milk
  • UHT Milk
  • Flavoured Milk
  • Cream
  • Butter
  • Anhydrous Milk Fat (AMF)
  • Skimmed Milk Powder (SMP)
  • Whole Milk Powder (WMP)
  • Whey Protein(Powder and Concentrate)
  • Lactose
  • Cheese
  • Yoghurt
  • Ice-cream
  • Others

Market Breakup by Region

  • Saudi Arabia
  • United Arab Emirates
  • Kuwait
  • Oman
  • Qatar
  • Bahrain

Competitive Landscape

Some of the major key players explored in the report by Expert Market Research are as follows:

  • Almarai Company
  • National Agricultural Development Company (NADEC)
  • Al Rawabi Dairy Company
  • Al Ain Dairy
  • Saudia Dairy & Foodstuff Company(SADAFCO)
  • Nestlé S.A.
  • Fonterra Co-operative Group Limited
  • Arla Foods amba
  • Lactalis Group
  • Others

Challenges and Opportunities

While the GCC dairy market presents numerous growth opportunities, it is not without challenges. One of the primary challenges is the dependency on imports for raw materials and finished dairy products. Despite efforts to boost local dairy production, a significant portion of the dairy supply chain relies on imports, which can be affected by international trade dynamics and supply chain disruptions.

Moreover, the market faces increasing scrutiny over the environmental impact of dairy farming and production. Concerns related to water usage, greenhouse gas emissions, and land degradation are prompting calls for more sustainable and eco-friendly practices in the dairy industry. Companies that adopt sustainable practices and invest in environmentally friendly technologies are likely to gain a competitive edge.

However, these challenges also present opportunities for growth and innovation. The GCC countries are investing heavily in diversifying their economies and enhancing food security, which includes boosting local dairy production. Government initiatives aimed at supporting the dairy sector, such as subsidies, grants, and technological advancements, are expected to drive the growth of domestic dairy industries.

The expanding reach of e-commerce and online delivery services provides another opportunity for the dairy market. With the convenience of home delivery, consumers can enjoy a wider variety of dairy products without leaving their homes. This trend is particularly relevant in urban areas where busy lifestyles drive the demand for convenient shopping solutions.

Future Outlook

Looking ahead, the GCC dairy market is expected to experience steady growth, driven by the increasing demand for nutritious and high-quality dairy products. The market is anticipated to witness continued innovation in product offerings, catering to the evolving preferences of consumers.

As the industry evolves, collaboration between manufacturers, retailers, and technology providers will be crucial in addressing the challenges and harnessing the opportunities in the market. By leveraging advancements in production technology, sustainable practices, and digital marketing strategies, the GCC dairy market can navigate the complexities of the evolving landscape and achieve long-term success.

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