With a combined population of 80 million, the fast-developing food industry in this region has driven demand for whey end-use products such as ice cream, processed cheese, biscuits, chocolate and processed meat.
A new report from Proteus Insight claims that while first generation whey products, such as sweet whey powder and lactose, remain the most popular type of whey used by food processors, second generation versions like whey protein concentrate are rising in popularity and opening the way to further-factionalised third generation products, such as lactoferrin.
"Demand for these more expensive whey ingredients is still very low in Saudi and Egypt, but the food industry is developing very quickly and once established in Europe this 'me too' region is likely to see a lift in demand," John Meropoulos, director of the market research firm told FoodNavigator.com.
Whey is comprised of protein, lactose (milk sugar), minerals (calcium, phosphorus and magnesium) and fat. Traditionally, whey was a by-product with a negative value from cheese production, but in the 1950s the US started to add value to the by-product and since this time the ingredient has seen a considerable rise in demand, notably on the back of the sports nutrition and functional food market which uses whey protein concentrates and isolates extensively.
The development of new functional foods and drinks, particularly adult and sports nutrition products, has led to increased usage of these ingredients, with 2002 consumption of all whey products pitched at nearly 770,000 tonnes.
And in the UK alone, recent research from UK research firm Mintel forecasts the current £835 million functional market will rise to £1.7 billion in the next five years.
"More functional food products are going to become a factor in markets such as Saudi Arabia, and compared to even five years ago, the awareness of whey as a food ingredient has increased considerably," added Meropoulos.
A key to the development of the whey market - for suppliers of whey in particular - is the fact that Saudi Arabia and Egypt have no tradition of hard, yellow ripened cheese production, which means there has never been any processing of whey. As such, they must rely on outside suppliers and must buy-in the ingredient.
Among the key suppliers in the region of whey ingredients are Borculo Domo, Dutch lactoferrin provider DMV International and Euroserum, as well as global dairy players Arla, Kerry and Glanbia. From a very low base relative to the EU (for example, Germany uses 10s of 1000s of tonnes of whey powder, while Egypt and Saudi combined have recenly used under four tonnes), Meropoulos said that the total whey powder market had increased in Saudi in volume terms by about 60 per cent since 1999 and that the market was showing strong potential.
The development of the market is a natural progression growing from an initial interest from food manufacturers in first generation whey products, through to second and, eventually, to expensive but highly specialised and factionalised third generation products.