Although the retail sale of fruits and vegetables in the region increased due to consumer preferences toward consuming healthy diets to boost immunity, the supply chain and production got disrupted in terms of export and import trade movements during the COVID-19 pandemic across all the GCC countries. The wholesale market of fruits and vegetables also got disrupted due to lesser demand from the bulk purchasers belonging to hotels, restaurants, and tourism industries due to the closure and lockdown restrictions brought into place by the respective governments. Most of the countries in the GCC region are not self-sufficient, in terms of fruits and vegetables. Hence, the countries are mostly dependent on imports, in order to satiate their domestic demands. However, smart farming practices, like hydroponics, have been serving as a vital alternative for traditional farming in most countries such as Saudi Arabia, the United Arab Emirates, and Kuwait among others. This increase in the adoption of new farming technologies is primarily attributed to a reduction in the dependence on the import market thereby resulting in significant growth of the market.
Key Market Trends
INCREASED DEMAND FOR FRUITS
According to the Food and Agriculture Organization, the fruits produced in the majority of the countries dominated the market over the years. Among all the countries, Saudi Arabia, Oman, United Arab Emirates, and Kuwait were the major producers of fruits. The total fruits production accounted for 3,195,046 metric tons in Saudi Arabia in 2019 whereas, the vegetable production accounted for 638,690 metric tons. Higher disposable incomes tend to make consumers shift from a carbohydrate-based staple diet to a nutrition-rich diet. The rising level of education and health awareness, among a major section of the population, is leading to more fruits and vegetable inclusive diets currently. Due to the increasing awareness regarding health issues, consumers from major countries in GCC, such as Saudi Arabia, United Arab Emirates, etc. are preferring healthier and more nutritious food, containing high-quality nutrition which in turn is driving the market.
INCREASED ACCESSIBILITY DUE TO PRESENCE OF MORE RETAIL CHAIN
The local distribution and retail network has flourished rapidly in the major parts of the GCC, especially in Saudi Arabia, United Arab Emirates among others, in the past few years. Most of the fruits and vegetables demand in the country is met through imports from other countries, hence the distribution channel is very strong. Supermarkets and hypermarkets have been propping up, and with their superior distribution channel and in-store equipment, the shelf-life of fresh produce has increased, thus enabling greater consumption of fresh produce among consumers. The majority of the consumption of fresh produce in the countries is accounted for through supermarkets and hypermarkets. Hence, the distribution of fruits and vegetables is better facilitated through partnerships with local supermarkets and hypermarket chains, like LuLu Group, LVMH, Fu-Com, and others. The leading retail chains in the region are Union Coop, Carrefour, Geant Hypermarket, Lulu Hypermarket, and others. The retail store market in the country is consolidated, and the high market share of these outlets is due to the promotional offers given to customers. Although only a few companies have major markets, new small retail and independent supermarket stores are growing at a faster rate.
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1.2 Scope of the Study
4.2 Market Drivers
4.3 Market Restraints
4.4 Value Chain Analysis
4.4.1 Value Chain Analysis - Overview
4.4.2 Value Chain Analysis - Price Markup
4.4.3 Stakeholders Analysis
4.4.4 Issues and Challenges Involved
5.1.1 United Arab Emirates
5.1.6 Saudi Arabia
7.2 Strategies Adopted and Recent Events