The FMCG sector in the MENA region continues to sail ahead and evolves rapidly, with more than 400 million people and a growing and very young population. The size of the MENA region economy is nearly 2 trillion dollars and there is huge headroom for growth in every industry including FMCG. This includes facial tissues, toilet paper, kitchen towels, feminine napkins, baby diapers, hair shampoos, hair colouring products, soaps, cleaning detergents, mouthwash, toothpastes, pesticides, packaging products, household supplies, air fresheners, baby care products, cosmetics, wipes, nail polish remover, shaving creams, and many others.
Changes in the competitive environment and operating models as well as shifting consumer lifestyles and channel structures are creating opportunities for FMCG manufacturers, distributors, and retailers. FMCG companies in the GCC and Middle East are spending millions of dollars in building their brands, growing their products, changing consumer behavior, and developing organizational capabilities. They are also expanding their capacities by having several manufacturing facilities dotted across the MENA landscape in addition to de-bottlenecking facilities and modernization.
Today, all the leading multi-national FMCG companies worldwide are present in the region including Kimberly Clark, Unilever, P&G, Henkel, Reckitt Benckiser, L'Oreal, Sealed Air –Diversey, Biesdorf, Johnson & Johnson, Dabur, Godrej, Indevco, Fine, many others. These companies have different strategies as to how they run their business in the region. Some of them have their own offices and production plants, others have offices and outsources the production to private label contract manufacturers in the region, some have distribution and retail centers only, or a mix of different strategies for different product lines.
Private label and contract manufacturing are growing very quickly in the region as more international FMCG companies works to outsource the production of their products or complement their existing capacities to fulfill increasing demands. In addition, more local retailers are working towards developing their own brand portfolio to compete with international FMCG companies.
The GCC’s increasing population and per capita income are helping drive the region’s consumer market, which is set to grow by 7.9% a year and reach $221 billion in 20151. A combination of high Bahraini disposable income and younger demographic profile is creating demand for high-value luxury goods and electronics, while the ever-growing working expatriate population is hungry for consumer goods. Such an attractive consumer market has drawn many international players with large-scale operations to Bahrain, including Kimberley-Clark, Unilever and British American Tobacco.
1Gulf Industry Worldwide, 1 February 2014
|British American Tobacco|
|Al Mashal Chemical|