MENA’s consumer packaged goods industry in a high-growth phase

The MENA region is quickly becoming a leader in global consumer packaged goods (CPG) industry. A new report from Bain & Company explores the region’s growth and what it means for CPG players in Saudi Arabia, the UAE, Egypt, and Iraq.

The overall market for CPG in the overall MENA region totals more than $450 billion in 2024, made up of fast-moving consumer goods, including around $200 billion in food and beverage and $250 billion in other, non-food categories.

According to Bain’s report, which surveyed 3,500 consumers and 20 regional executives, the UAE has been seeing about 6% volume growth in CPG, well above the 1.7% global average, and Saudi Arabia followed with around 4%, alongside solid value growth.

The report projects MENA’s CPG market will reach up to $650 billion by 2030, an annual growth of 5%, supported by positive regional fundamentals and continued consumer demand. There has been more disposable income and good consumer spending, in part thanks to easing inflation and anticipated interest rate cuts. Government-led initiatives to lessen dependence on oil have paid off, creating new economic opportunities with the intent to lower unemployment rates.

The survey found around 37% of MENA consumers reported not having enough time for daily essentials, making them more time-strapped than global peers. That means more demand for packaged goods from the supermarkets.

“CPG leaders should view MENA as a true growth arena. The opportunity is real, but the bar is rising,” said Faisal Sheikh, senior partner at Bain & Company.

“Consumers are more time-starved, more intentional, and increasingly focused on trust and relevance. The winners will be the companies that tailor their growth algorithms to the region’s realities and invest behind the moments that matter most to local consumers. This will inevitably mean streamlining the cost structure to create funds that can be reinvested behind growth.”

Emerging markets

Emerging markets around the world have begun to play an outsized roll in the global CPG market, especially in China, India, Mexico, and Brazil. The MENA countries, too, have also been above the world average of volume growth.

The MENA region’s CPG market has also proven to be robust. Egypt, having recently rebounded from macroeconomic turbulence, is now leading the regional CPG market with an estimated $67 billion in sales, closely followed by Saudi Arabia at around $65 billion.

The region’s growth has been supported by robust structural fundamentals. For example, population size is on a steady upward trajectory, laying the groundwork for sustained long-term demand. Easing inflation and anticipated interest rate cuts have enhanced disposable income and improved consumer spending.

Government-led initiatives to lessen dependence on oil have paid off, creating new economic opportunities with the intent to lower unemployment rates. CPG executives are feeling the effects of the favorable environment. In interviews, most CPG leaders reported that their companies outperformed expectations. More than three-quarters said EBIT performance improved over the previous year, and two-thirds said it exceeded their forecasts.

Challenges

A number of factors have led to rising costs for CPG companies in recent years. For example, on the logistics side, costs continue to rise, and those costs may continue to increase as government subsidies progressively disappear. Labor costs are escalating due to regional wage inflation, requirements to hire local workers (particularly in the KSA), and the higher skill level these jobs require.

Though the MENA region has done quite well in recent years despite global economic headwinds, it has still been hit by difficulties – especially its exposure to geopolitical disruptions.

Inflation has weighed on margins around the world, contributing to increasing costs in raw materials, energy, and production. The Red Sea crisis disrupted vital shipping lanes, increasing logistics costs and delivery timelines for imports and exports. These factors all add pressure to supply chains and operating margins, especially CPG companies that rely on fast-moving cross-border trade.

Despite these various challenges and risks, the MENA market for CPG is expected to continue expanding steadily, and regional executives remain confident. About 77% of the leaders interviewed expressed a positive growth outlook, with nearly a quarter describing their expectations as ‘extremely positive’.

The biggest concerns for respondents to the survey were, quite unsurprisingly, war in the region, geopolitical tension, and changes in oil prices. The Gulf region still relies heavily on the oil industry and that is deeply affected by the ongoing large-scale conflict in the region, particularly the Israel-Palestine conflict and further concentrated in Lebanon and Syria.

“MENA’s growth is being shaped by channel evolution and rising expectations on convenience, especially in markets like the UAE, where e-commerce is already meaningful and still expanding,” said Federico Piro, partner at Bain & Company.

“Companies that adapt route-to-market, sharpen their portfolios, and execute with discipline can capture growth while strengthening brand resilience.”