Healthy, trendy Egyptians fuel 'better-for-you' food growth
The research firm estimates the Egyptian better-for-you (BFY) packaged food sector was worth just over US$50m last year, and will grow by just under 4% this year. But this growth is set to accelerate, reaching a compound average growth rate of 7.26% between 2015 and 2020.
“BFY reduced sugar packaged food is expected to contribute to this growth mainly, with reduced sugar chocolate confectionery contributing the most as consumers seek healthier diets. Furthermore, reduced fat dairy will contribute as consumers in Egypt seek low fat yoghurts, low fat cream and low fat cheese as part of their diets. Dairy is a huge part of a traditional Egyptians lifestyle, hence this sector will contribute a lot,” said Fatemah Sherif, senior analyst at Euromonitor International.
Great gum growth
According to Sherif, the reduced sugar packaged food segment makes up most of the BFY packaged food sector, at US$32.7m in value last year, with sugar-free gum making up 84% of this figure. The next largest segment is BFY reduced fat packaged food, at 35% of the overall sector.
“Sugar free gum is the majority, due to the wide distribution of such brands within the main modern and traditional trade channels. Furthermore, with Egyptians looking to be more health conscious, having a sweet that can give them the same taste as a sugar sweet at low calorie is what they are looking for,” said Sherif.
A recent Euromonitor report into the sector says gum will be a main driver of growth: “Reduced sugar gum will […] benefit not only from consumers seeking to reduce their sugar consumption due to weight concerns but also from a growing focus on oral health. This product area is expected to see the strongest volume growth across better for you packaged food in the forecast period with an impressive 16% CAGR.”
The report predicts growth across all BFY segments, particularly low-fat milk, thanks to a continuing health and wellness trend in Egypt, with consumers becoming more concerned about obesity. According to Sherif, affluent consumers are a key part of this trend.
“The better for you market has grown with the growing interest in low sugar and fat foods. With the Western trends influencing the Egyptian market, this has driven high-mid income earners to buy healthier types of food and watch their calorie intake,” she said.
Imports face currency challenge
But Sherif warned international brands may struggle in the face of a weakening Egyptian pound: “BFY products are mainly sold in the modern channel and dominated in some categories like BFY reduced sugar packaged food by multinational brands.
“Furthermore, the spending power in Egypt with the devaluation of the Egyptian pound means imported brands are highly priced in comparison to local brands, leading retailers to increase prices and more expensive for consumers to buy. This may be challenging for multinational brands to grow, unless the currency becomes better against the dollar over the forecast period,” she added.
