Dairy Products and Alternatives in Middle East and Africa

January 2024

There is an intriguing dichotomy at play in dairy products and alternatives in Middle East and Africa, with value for money particularly important for many consumers given the current inflationary environment. At the same time, particularly among those with higher disposable incomes, demand for healthier products continues to grow. This is likely to see new product developments focusing on areas such as organic, fortified, high protein or low sugar or fat content.

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Key findings

Subsidies on milk make it difficult to drive value growth for this product in Algeria

Milk is still perceived as the cheapest protein option among Algerians, especially fresh pasteurised milk, as it is subsidised by the government. The subsidies are projected to be maintained over the forecast period for what is an increasingly mature product, consumed by most households. With pasteurised fresh milk prices set by the government, this leaves milk producers with little opportunity to increase their margins in this product area.

Kenya looking to make improvements to its domestic dairy industry

The Kenya Dairy Board announced in mid-2023 that it plans to re-examine the legal framework as it looks to improve the country’s dairy industry. It is planning to increase local and foreign investment with the aim of becoming a net exporter, at the same time as limiting imports.

South Africa planning front-of-pack warning labels for unhealthy products

The rising incidence of obesity and heart disease in South Africa has seen the government draw up draft Regulations Relating to the Labelling and Advertising of Foodstuffs. The proposals would promote healthier dietary choices and include front-of-pack warning labels for packaged food products that contain added sugar, saturated fats, salt or artificial sweeteners above the stipulated maximum levels.

Hajj and Umrah operating at full capacity again in Saudi Arabia

Saudi Arabia is expected to record strong growth over the forecast period. Not only have Hajj and Umrah been operating again at full capacity since 2023, but investments and expats are being attracted to the Kingdom. Events such as Jeddah Season Festival, while designed to attract foreign visitors, are also aimed at persuading locals to stay at home rather than travelling abroad.

Scope
Key findings
Middle East and Africa recording the strongest sales growth
Growth expected in the forecast period after a difficult 2022 due to rising costs
Dairy dominates sales in the overall category in Middle East and Africa
Anytime Milk Machines eating into sales of packaged milk in Kenya
Plant-based dairy very dynamic in Israel, Morocco and South Africa over 2018-2023
Dairy dominates new sales added in 2018-2023
Value for money remains key for consumers in South Africa
Small local grocers tend to be the leading distribution channel in Africa…
…with modern grocery retailers leading in the Middle East
Increasing concentration in Saudi Arabia as local players make gains
Leading players losing share to private label in South Africa
Leaders Nestlé and Danone present across the region
Almarai remains the clear brand leader in Middle East and Africa
Positive value and volume growth expected throughout the forecast period
South Africa considering front-of-pack warning labels for products high in fat or sugar
Algeria: Market Context
Algeria: Competitive and Retail Landscape
Cameroon: Market Context
Cameroon: Competitive and Retail Landscape
Egypt: Market Context
Egypt: Competitive and Retail Landscape
Israel: Market Context
Israel: Competitive and Retail Landscape
Kenya: Market Context
Kenya: Competitive and Retail Landscape
Morocco: Market Context
Morocco: Competitive and Retail Landscape
Nigeria: Market Context
Nigeria: Competitive and Retail Landscape
Saudi Arabia: Market Context
Saudi Arabia: Competitive and Retail Landscape
South Africa: Market Context
South Africa: Competitive and Retail Landscape
Tunisia: Market Context
Tunisia: Competitive and Retail Landscape
United Arab Emirates: Market Context
United Arab Emirates: Competitive and Retail Landscape
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