Dairy in The Middle East and Africa

Dairy in The Middle East and Africa

PUTTING THE MIDDLE EAST AND AFRICA INTO CONTEXT
At over 3% CAGR, the Middle East and Africa is the third fastest growing region for dairy and has overtaken Eastern Europe to be the fifth largest region as of 2016. The market is highly unsaturated with per capita spend on dairy at just US$25 per head, the lowest in the world. As such, affordability is one of the predominant barriers to increased adoption. If affordability improves, growth could be even more dynamic. That said, the underdeveloped cold chain infrastructure in many MEA markets, makes it a difficult region to reach consumers and manufacturers have to be creative in distributing their perishable products.

JUST THREE MARKETS PROVIDE THE MAJORITY OF THE REGION’S DYNAMISM
While the Middle East and Africa’s growth is impressive - a 3.5% value CAGR was achieved between 2011 and 2016 - 60% of additional sales growth was recorded in just three markets: Egypt, Saudi Arabia and Algeria. In Saudi Arabia, much of this arose from a large contingent of foreign workers as well as strong macroeconomic performance in Algeria. In Egypt, changing family dynamics where female participation in the workforce is increasing has resulted in a stronger demand for convenient foods. Over the last few years, these countries have seen increased interest from international dairy players, such as Arla and Lactalis, seeking to gain access through joint ventures. Seeing the retail landscape is still dominated by small independent retailers, new players are forced to buy into an existing distribution network via partnerships with local players.

STRONG PERFORMANCE FOR DMP AND YOGHURT AND SOUR MILK
Drinking milk products (DMP) have shown a consistent strong performance across all MEA markets over the years. Saudi Arabia, where one of the strongest growths is seen is witnessing a gradual increase in health awareness among a select group of consumers, most notably females. They are more tuned into global health and lifestyle trends as they closely follow them through digital media. The demand for healthier food alternatives such as fresh milk is growing because this type of milk is considered healthier and more nutritious than shelf stable milk. With the exception of Iran, yoghurt and sour milk products has also seen strong performance across all markets. Partly this is due to consumers switching to packaged yoghurt instead of making this at home or buying artisanal types over the counter, due to better convenience.


INTRODUCTION
Scope
REGIONAL OVERVIEW
Putting the Middle East and Africa into context
Just three markets provide the majority of the region’s dynamism
Strong performance for DMP and yoghurt and sour milk
Iran the exception to strong dairy growth in the region
Iran takes hit, while Egypt flourishes
Two markets that could offer big return but are high risk
Strong divide in the region due to product availability
Increased foreign investment to improve cold chain infrastructure
Fragmented and diverse distribution of dairy across region
Slow development of modern stores an obstacle to growth
LEADING COMPANIES AND BRANDS
More international players will want foothold in MEA
Strong local competition a real problem for international players
Local dairy players likely acquisition targets in Iran
Fresh milk and cheese the common ground for leading brands
COUNTRY SNAPSHOTS
Saudi Arabia: Market context
Saudi Arabia: Competitive and retail landscape
South Africa: Market context
South Africa: Competitive and retail landscape
Egypt: Market context
Egypt: Competitive and retail landscape
Iran: Market context
Iran: Competitive and retail landscape
Israel: Market context
Israel: Competitive and retail landscape
Tunisia: Market context
Tunisia: Competitive and retail landscape
United Arab Emirates: Market context
United Arab Emirates: Competitive and retail landscape
Morocco: Market context
Morocco: Competitive and retail landscape
Nigeria: Market context
Nigeria: Competitive and retail landscape
Cameroon: Market context
Cameroon: Competitive and retail landscape
Algeria: Market context
Algeria: Competitive and retail landscape
Kenya: Market context
Kenya: Competitive and retail landscape

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