Saudi Arabia, with over 65% share, is the largest producer of meat among the GCC countries, followed by Kuwait (14%). Unlike many other GCC nations, Saudi Arabia has a significant quantity of domestic meat production, though not enough to meet the domestic demand. Regarding consumption, Saudi Arabia continues to lead with over 47% share of the total meat consumption by GCC countries; the United Arab Emirates stands second with a share of 29% due to the high tourist-inflow. As of 2015, the edible meat industry in the Saudi Arabia region was valued at USD XX.XX billion and is expected to grow at a CAGR of X% for the next five years.
Owing to the support from Saudi Arabia government, the food manufacturing and processing sector has grown fast over the past few years. The government has offered support in the form of direct subsidies for select food production equipment, duty-free imports of raw supplies, interest-free loans and highly subsided benefits.
Growing population (both domestic and expat) is another factor responsible for the increased consumption. Urbanization and growing popularity of retail format, together, are enhancing the consumption of processed food, milk and meat. Strong economic growth leading to higher protein consumption, growing number of domestic, as well as, expat population, coupled with rising preference for red meat (both sheep and bovine meat) are driving the meat market in the region.
Restraints and Challenges
As the region has a high Islamic population, the biggest constraints for the market in the region are strict quality checks and phytosanitary norms, along with Halal requirements. Processes, such as stunning and automated mechanical slaughter, do not accommodate for Halal procedures, making these methods of slaughter unsuitable for the region. Meat processing companies must be very careful in their selection of meat and non-meat ingredients. In addition to the already existing constraints, classification of red meat and processed meat as, possibly, carcinogenic foods by the WHO is reducing the consumption of these products in certain sections of the educated population.
Due to its location and lack of natural resources necessary for livestock production, most of Saudi Arabia’s edible meat is imported, to meet its domestic demand. Saudi Arabia aims to close this gap and achieve self-sufficiency, which is part of its food security plan. Currently, Saudi Arabia can meet only 56% of its edible meat demand, i.e., chicken, beef, goat and sheep, with domestic supplies. With several projects, underway, the production capacity is expected to double by 2020. Major poultry companies have already done so with the support of the government. Hence there are a lot of opportunities in the country regarding trade, food processing and infrastructure requirements. As many importers in this region import live animals, there exist great opportunities for setting up slaughter houses and processing plants in the region.
About the Market
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