Market Trends of GCC Rigid Plastic Packaging Industry
Food Segment to Hold Significant Share
- In GCC, food packaging is one of the most significant end-use industries of plastics. In the food industry, the demand for rigid plastic packaging is increasing. The industry is increasingly replacing traditional materials, such as paperboard, metals, and glass, due to beneficial plastic properties, such as lightweight and reduced cost.
- Moreover, the GCC's urbanization growth, economic recovery, and the reopening of the hospitality and tourist industries are all projected to contribute to a moderate increase in food consumption. For instance, according to various research estimations, most GCC nations have an urbanization rate of more than 80%. This would significantly enhance the number of consumers visiting grocery stores, mostly finding food packaged in rigid containers. Further, the food industry in the GCC has remained mostly conservative and grown progressively in recent years due to concerns about the economy and international relations. Such factors would contribute to the rigid plastic packaging market growth.
- The region includes significant countries such as Saudi Arabia, UAE, etc., where the food industry remains one of the most vital sectors in the overall economy. According to Foodex Saudi, the domestic food consumption in the country total is 3,130 calories per person per day. This creates a food sector annual consumption growth rate of 18.5%. Consumption rates are anticipated to expand by 55% through 2023. Such trends would significantly create demand for rigid plastic products in the region.
- Also, the region is witnessing a paradigm shift in consumers' affinity toward fresh, frozen, and baked foods. This is driving the growth of the market studied. These shifts occur in phases, as consumers focus on consuming health-conscious foods and are willing to spend more on high-quality fresh products. Such trends would positively impact rigid plastic packaging products, which would be an ideal solution for food packaging demands.
- Many packaging companies in the region have been expanding their manufacturing capabilities by building new production facilities to provide packaging solutions for food packaging, which indicates the market growth potential of the region.
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United Arab Emirates to Register Fastest Growth
- Saudi Arabia's demand for rigid plastic packaging solutions has been witnessing positive growth across end-user sectors such as food, beverage, consumer goods, cosmetics, and pharmaceuticals. The demand is primarily attributed to rapid urbanization, which usually translates to increased consumer spending and production of consumer goods, a large expatriate population, and the changing dietary habits of the resident citizens.
- Further, the country has been implementing several initiatives and regulatory reforms, such as Saudi Vision 2023 and the National Industrial Development and Logistics Program (NIDLP), that may increase regional industrial production. This is expected to create considerable demand for packaging products from the region's non-oil sector.
- The country's food and beverage sector is emerging as one of the largest sectors to adopt rigid plastic packaging products such as food containers and plastic bottles. Moreover, the expansion of the food, beverage, and dairy sector in the country further proliferates the demand for rigid plastic packaging products. For instance, in February 2022, Danish company Arla Foods, one of the leading dairy firms with brands such as Lurpak, Puck, Kraft, and The Three Cows, announced an investment of USD 17 million in new production lines in Saudi Arabia to diversify the product range and further its exports to the Middle East region.
- Further, in January 2022, Kerry officially opened a 21,500-square-foot facility in Saudi Arabia to produce sustainable food ingredients at its Jeddah operation. These will be distributed across the Middle East, particularly in the snack, meat, and bakery sectors. These new developments and the expansion of food manufacturing facilities would further drive the industry's growth of rigid plastic packaging solutions.
- Furthermore, according to the Saudi Arabian General Authority for Investment (Sagia), spending on food services will increase by 6% per annum over the next five years. The increase in food delivery options is the separation between food preparation and consumption location. Additionally, Saudi Arabia is home to an increasing number of restaurants, and the food manufacturing sector benefits from the growth in population and income, lifestyle changes, state support, and favorable trade agreements. The demand for disposable packaged foods is growing, and more multinational companies are entering the market, thus driving significant growth opportunities for market vendors in the coming years.
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