Market Trends of GCC Labeling Industry
The Food Sector Significantly Driving the Market Growth
- The increasing growth of the food industry is significantly propelling the demand for labeling, primarily because governments and regulatory bodies impose strict labeling requirements on the food industry to ensure consumer safety and transparency. Labels must include detailed information about ingredients, nutritional facts, allergens, expiry dates, and country of origin. Compliance with these regulations is essential, driving the need for accurate and comprehensive labeling.
- Some GCC countries have implemented or are considering front-of-pack labeling systems, such as traffic light labeling or Nutri-Score, to provide a quick and easy way for consumers to assess the nutritional quality of food products at a glance. In addition, the GCC Standardization Organization (GSO) works toward harmonizing food labeling regulations across member states to facilitate trade and ensure consistent standards. This includes alignment with international standards set by organizations such as Codex Alimentarius. Such regulations reflect the GCC's commitment to protecting consumer health, promoting transparency, and ensuring that food products meet high safety and quality standards.
- Modern consumers are more health-conscious and demand transparency about the food products they purchase. They seek information on ingredients, nutritional content, sourcing, and potential allergens. Clear and detailed labels help consumers make informed decisions, increasing the demand for effective labeling solutions. According to the World Travel & Tourism Council (WTTC) and the International Monetary Fund (IMF), retail food sales in the nations of the GCC were expected to rise to USD 216.3 billion by 2026.
- Furthermore, the growth of supermarkets, hypermarkets, and specialty food stores increases the variety of consumer products. Each product requires a unique label that meets regulatory standards and provides necessary information. The expansion of retail outlets directly correlates with the increased demand for labeling solutions. For instance, in April 2024, UAE-based grocery store operator Spinneys 1961 Holding PLC announced its plans to debut in Saudi Arabia, capitalizing on the Kingdom’s development and increasing demand for retail products.
- In addition, in August 2023, LuLu Group, a significant retailer in the Middle East, opened its 14th hypermarket in Kuwait. The recent store is located in the Warehouse Mall in South Sabahiya and spans 48,000 square feet. It offers a wide range of products, including fresh produce, groceries, seafood, children’s toys, seasonal party supplies, health and beauty products, electronic and mobile devices and accessories, IT products, peripherals, and premium cosmetics and perfumes under the brand BLSH.
- Also, in a strategic move, the Alshaya Group launched a new production hub in Saudi Arabia, dedicated to baking and packaging food for 400 Starbucks outlets nationwide. With a regional Starbucks portfolio exceeding 1,000 stores, Alshaya Group strengthened the facility's reach and supplied over 500 Starbucks locations in 2023. Such expansion in the food industry may further propel the growth of the market.
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The United Arab Emirates to Hold a Significant Market Share
- The United Arab Emirates is significantly driving the market growth. The country's food and beverage industry is expanding rapidly, driven by a growing population, increased tourism, and a rising number of expatriates. This growth necessitates extensive labeling to provide product information, ensure safety, and meet regulatory requirements. According to the World Bank, the number of international tourist arrivals in the United Arab Emirates is expected to constantly expand between 2024 and 2029 by 17.3 million arrivals (+63.32%).
- Furthermore, the country's e-commerce and online grocery shopping surge has amplified the need for accurate and detailed product labeling. In order to ensure consumer trust and satisfaction, online platforms require comprehensive product descriptions and images, including clear labeling information.
- According to the USDA Foreign Agricultural Service, food retail is the fourth largest e-commerce segment in the United Arab Emirates. The retail value of food e-commerce in the United Arab Emirates recorded USD 1,072 million in 2023. In addition, one of the most prominent players in the food e-commerce space in the country was Carrefour UAE, which generated over USD 100 million in revenue in 2023.
- Moreover, the country's expanding healthcare and pharmaceutical industries also contribute to the demand for precise and compliant labeling. Labels in these industries must provide detailed information on dosages, ingredients, usage instructions, and regulatory compliance. For instance, the UAE Ministry of Health and Prevention and Jafza, a DP World company, signed a Memorandum of Understanding (MoU) to develop the healthcare and pharmaceutical industries. This is expected to increase the demand for various products in the region, such as dropper bottles, nasal sprays, and liquid bottles, thereby increasing the demand for pharmaceutical packaging further in labeling.
- Innovations in labeling technologies, such as digital printing, RFID, and QR codes, are enhancing the functionality and efficiency of labels. These technologies support better inventory management, product tracking, and consumer engagement. For instance, in December 2023, Dubai significantly strived toward digital transformation. The city is considering introducing the Dubai Unified License and QR code, marking a pivotal moment in its business landscape. This initiative is poised to revolutionize business operations, spanning from the vibrant mainland to the dynamic free zones of the city.
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