- Heavy focus on new product development as well as various advertising campaigns by the leading companies kept on positively impacting cheese in 2014. In order to build up excitement around the product, manufacturers experimented with new flavours and attractive packaging, backed by strong advertising activities. A number of companies, including Deemah-United Foods Industries Corp Ltd, Saudi New Zealand Milk Products Co Ltd and Lactalis International, launched new products with exciting new flavours during the year, which had a positive impact on overall cheese growth.
- Almarai Co Ltd led cheese with a 22% value share. The company invested heavily in advertising through all media types, including, outdoor, broadcast and digital media, connecting with customers at all ends. The branded in-store refrigeration units, and various in-store promotions also helped improve brand visibility. Almarai Co also benefitted from its world-class supply chain system which ensures timely supply of its fresh products in all retail channels, across the country.
- Saudi Arabia is witnessing a gradual improvement in overall health awareness among the general public. Mothers in particular, are now increasingly concerned about the nutritive intake of their children. Since more women are entering the workforce now, they are expected to look for food products that not only save their time in kitchen but also provide the necessary nutrients to their children, along with a pleasant taste, as children can be quite fussy. Cheese is generally considered a good alternative to other spreads as it is healthier and offers different varieties and formats, such as spreads, slices, squares and triangles. During the forecast period, hence, as economic development accelerates and female employment increases, the demand for healthier and tastier cheese will continue to grow, thus positively affecting the category.
Drinking Milk Products
- Saudi Arabia is gradually witnessing an improvement in the overall health consciousness of the general public. As people are gaining access to digital media, they are becoming more familiar with Western lifestyles and trying to incorporate the healthy habits into their daily life. Although physical activities such as exercise, are still not adopted fully owing to the lack of widespread health centres and gymnasiums, people are substituting their diet with healthier eating alternatives. Women, in particular, are becoming increasingly selective about what they choose to buy from supermarket shelves. Hence, demand for fresher products, with lower amounts of fat and more nutrients is growing. This is reshaping the dairy industry also, and in particular, drinking milk products, in a positive way.
- Almarai Co Ltd retained its position as the category leader with a 34% value share. Apart from the strong loyalty enjoyed by the Almarai brand within dairy, it also has a world-class supply chain system, which ensures timely supply of fresh products across the country. The company spent heavily on advertising throughout the year, not only through traditional outdoor, print and broadcast media but also through social media networks where it engaged customers through competitions and discussions. Such strategies helped ensure the brand’s continued leadership in the category.
- Saudi Arabia’s local population is increasingly exposed to global trends and developments and is spending more time online on social networking sites, such as Facebook and Twitter. This exposes them to newer lifestyle trends practised in the Western world. Women, both housewives and professionals, are developing their knowledge about healthier lifestyles and eating habits and trying to incorporate these into their family life. This trend is going to strengthen further in the future, which will have an impact on the overall food industry in general, and drinking milk products too, as demand for fresh and healthier products will grow.
Yoghurt and Sour Milk Drinks
- The lunar calendar, usually called “Hijri calendar”, is followed in Saudi Arabia and changes according to the moon and hence the months keep shifting each year against the Gregorian calendar. In recent years, the changes in the calendar year, led to the shift of Ramadan, the Muslim fasting month, towards summer season. As a result, demand for several food and drink products has gone up. People now prefer products that help beat the summer heat and provide some hydration and coolness after breaking the fast. Yoghurt is one of such products, hence its consumption increased.
- Almarai Co Ltd will retain its leadership position in 2014 with a massive 49% value share. The company’s brands enjoy a long term reputation for quality and trust among the local population. In order to keep the customers engaged, the company regularly spends on advertising and marketing activities. The outdoor, TV and digital advertising campaign for its pro/pre-biotic brand Vetal ran throughout 2014. The company also has a dedicated Facebook page for its Vetal brand through which recipes, health tips and other product-related topics are discussed with consumers. Finally, the company’s renowned distribution system enables it to supply fresh products to all of the retail channels across the country, hence managing to always remain on the shelves. Such strategies helped it to maintain its lead in 2014.
- Saudi Arabia is experiencing fast growth in its population. With a birth rate hovering around 20% during the forecast period, the population is expected to reach over 32 billion by 2018. The growth in population is going to have positive impact on various products, including yoghurt, demand for which is expected to rise further as the population continues to increase. In addition to population growth, which is going on at a fast pace, demand for yoghurt and hence its consumption is going to soar as for the next few years, Ramadan coincides with summer time.
- 2013 and 2014 witnessed some major packaging changes in the market, thereby lifting current value sales to 15%, compared to 14% seen during the review period. As manufacturers worked towards reducing costs of production without increasing retail prices, they looked to cut down the packaging costs, and at the same time, provide consumers with fresh-looking and more appealing packaging. This was largely witnessed in condensed/evaporated milk, where new packaging formats were introduced by Saudi Dairy & Foodstuff Co Ltd for Saudia, Danya Foods Ltd for Puck and Friesland Arabia for its brand Rainbow. In other categories, the addition of new flavours continued in chilled dairy-based desserts. These developments helped give other dairy a boost.
- National Food Industries Co Ltd led the category in 2014 with a 16% value share. This leadership is largely because of the company’s strong position in condensed/evaporated milk, where it leads with almost 38% value share. The company’s flagship brand Luna has a strong loyalty among consumers of condensed/evaporated milk. 2013 and 2014 saw new and improved packaging for Luna, backed by strong TV and outdoor advertising. Special in-store promotions during Ramadan offering multipacks of condensed milk helped boost sales. The company has a dedicated Facebook page where it interacts with consumers through discussions, competitions and information about products. Finally, the company launched a Luna-branded cooking show with famous cooks and guests on YouTube and Facebook in late-2012. Such marketing activities helped strengthen the company’s position further in this category.
- The exponential growth currently going on in the retail landscape of the country is going to have a positive impact on various categories, including other dairy. A population boom, which is not expected to slow down anytime in the near future, is going to result in the creation of new neighbourhoods, which will eventually require additional retail outlets. Not only do the supermarkets and hypermarkets in the country have ambitious expansion plans, but smaller grocery retailers are also growing in number. Furthermore, with the help of suppliers through branded refrigeration units, these small scale retailers are going to have better access to cold chain which will encourage stocking of fresh products like fresh cream, chilled dairy-based desserts and chilled sour cream. Hence, other dairy will be positively influenced by this retail expansion.
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Discover the latest market trends and uncover sources of future market growth for the Dairy industry in Saudi Arabia with research from Euromonitor's team of in-country analysts.
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The Dairy in Saudi Arabia market research report includes:
- Analysis of key supply-side and demand trends
- Detailed segmentation of international and local products
- Historic volumes and values, company and brand market shares
- Five year forecasts of market trends and market growth
- Robust and transparent market research methodology, conducted in-country
Our market research reports answer questions such as:
- What is the market size of Dairy in Saudi Arabia?
- What are the major brands in Saudi Arabia?
- How has the economic downturn impacted sales performance given its staple food status?
- Given mounting obesity concerns, are consumers moving from full-fat to reduced fat/fat-free offerings?
- How are volatile farmgate prices for milk impacting retail prices and sales performance?
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This industry report originates from Passport, our Packaged Food market research database.
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