GMG-Silal deal aims to dish up customers for 1,100 UAE farms

Reuters/Amr Alfiky

• Food retailer links up with agriculture subsidiary of ADQ
• Deal aims to bring more locally grown produce to Emirati stores
• GMG owns supermarket brands such as Géant and Monoprix

More locally grown food is set to be sold in UAE supermarkets under a link-up between retailer GMG and agri-food business Silal, a subsidiary of sovereign wealth fund ADQ.

Under the deal, which was signed at last week’s Abu Dhabi International Food Exhibition, up to 1,100 UAE farms contracted to Silal will be supported to sell their fresh produce in GMG’s supermarkets.

Phase 1 involves over 30 product categories, which will be available at GMG’s Géant stores. More will be added later and sold at the company’s other supermarket brands, such as Monoprix.

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Mohammad A. Baker, deputy chairman and CEO of GMG, said the memorandum of understanding would accelerate the company’s plan to source 30 percent of fresh food locally and help “support a critical pillar of the country’s socio-economic growth while contributing to key national objectives”.

The Gulf has historically imported around 90 percent of its food, constrained by arid soils, scarce water resources and searing temperatures.

However, concerns about the impact of climate change on agriculture – together with the pandemic-induced supply chain crisis and the war in Ukraine – have forced governments to rethink their food security strategies.

A Deep Knowledge Analytics (DKA) report published in July recommended that GCC governments step up their efforts to develop agri-food technology and reduce waste.

The study acknowledged progress in countries such as the UAE – which launched its National Food Security Strategy 2051 three years ago – but said 86 million people in the Middle East and North Africa did not have sufficient food consumption.

In the DKA 2022 Food Security Index, which ranked countries according to access to food, crisis risks and resilience of the economy, the UAE was the top-placed Arab country at 26th. Qatar was 29th, Bahrain 30th, Oman 41st, Saudi Arabia 44th and Kuwait 47th.

The high-income countries of North America and Europe topped the index of 171 nations.

The GMG-Silal deal comes ahead of the first Vertical Farming Middle East Congress, which takes place in Abu Dhabi from December 12 to 14.

The event is being organised by food consultancy Zenith Global. Richard Hall, Zenith’s chairman, said Gulf governments were “identifying vertical farming as integral to their strategies for healthy nutrition, local fresh produce and year-round sustainability”.

The focus on agricultural technology also offers opportunities to businesses in the region. According to CB Insights, over $6.4 billion was raised last year through investments in tech providers and next-generation crop producers. In July Abu Dhabi’s Pure Harvest Smart Farms secured $180 million from global investors.

In Saudi Arabia, which has lagged behind some of its neighbours in global food security rankings, the Ministry of Environment, Water and Agriculture has allocated $27 million to develop and localise vertical farming technologies. Riyadh’s National Research and Development Centre for Sustainable Agriculture is planning to form global partnerships with pioneers in the field.

Market research firm Data Bridge forecasts that the vertical farming market in the Middle East and Africa will be worth almost $5 billion by 2029.

Wes Schwalje, COO at Tahseen Consulting, told AGBI: “Vertical farming has the potential to supply large amounts of produce to the region while requiring significantly less land and water than traditional farming methods.

“In the GCC, major grocery chains are also in a prime position to adopt vertical farming technology by growing produce in facilities close to stores or installing miniature facilities on store premises.”