Confectionery in Saudi Arabia

Prospects

Saudization highly impacts the category

Chocolate confectionery is being affected by a number of factors, including Saudization, which continues to have its negative impact on the economy, since a lot of expatriates are leaving and these numbers will continue to double each year as the expenses for families increase. Families are not capable of overcoming the increase in prices on fundamental commodities and are returning to their home countries.

2018 VAT implementation and its influence

The Saudi government implemented a 5% VAT rate in 2018 on most goods and services. The Saudi population had already learned to live with austerity and prioritise their spending and needs since 2017 when the government decided to cut many of the governmental employees’ wages.

Countlines is the fastest-growing category

Despite the overall decline of chocolate confectionery in 2018, countlines is witnessing healthy positive growth. Consumers still enjoy eating countlines rather than any other type of chocolate.

Competitive Landscape

Mars GCC continues to lead

Mars GCC continues to lead chocolate confectionery thanks to its well-known brand name and consumers’ loyalty, which increases each year despite the economic situation. Saudi consumers are well known for their love of international brands, especially in chocolate confectionery, and their loyalty to Mars remains strong.

Growth of modern trade in Saudi Arabia

With the VAT implementation in 2018 and the rising prices of goods pushing consumers to prioritise their spending, modern trade (mostly hypermarkets) is growing even more. Hyper Panda is considered the biggest hypermarket in Saudi Arabia thanks to its extensive coverage in all areas across the kingdom.

Health and wellness enters the category

The new generation has a significant impact on chocolate confectionery in addition to growing consumer health awareness. People have started to focus on their lifestyles and eating habits, and more shops are selling healthy meals, dietary products and organic food.

Prospects

Shrinking population impacts gum

Saudization continues to increase its impact on the Saudi economy and the snack market specifically and is leading to a huge number of expatriates leaving the country. Gum remains a niche category in comparison to others in confectionery.

Sugar free gum is increasingly popular

Sugar free gum continues to attract consumers who are concerned about their health and diets. Sugar free gum is considered a healthy and easy way to clean teeth that prevents the formation of plaque and keeps the mouth hydrated and breath fresh.

Younger generation drives the category

Younger consumers are the target of many leading companies looking to grow their sales. They are known for their healthier way of heating and snacking in comparison to older consumers.

Competitive Landscape

Batook Chewing Gum Ind Ltd remains the leader

Batook Chewing Gum Ind Ltd continues to lead gum in Saudi Arabia thanks to its well-established name across the kingdom and its consumers’ loyalty, who continue to buy its brands despite the tough economic situation. Batook faces a lot of competition from other leading companies like Mars, which keeps launching new flavours in gum.

Gum fusion flavours gain popularity

Many companies in gum are trying to attract as many consumers as they can by introducing new flavours to the market. Flavour fusion, which is mainly introduced by Mentos 3D and Mentos, is the combination of three fruits such as green apple, raspberry and strawberry or watermelon, pine apple and melon.

Supermarkets has the biggest share among other channels

Supermarkets are increasing their share in Saudi Arabia, not just in gum but also in other categories. It is easier to buy gum from a nearby supermarket than to drive a distance to a hypermarket and get a small pack of gum.

Prospects

Ramadan influences the category

The earlier Ramadan comes each year, the earlier the schools close. Ramadan begins in the first half of May, schools are expected to finish before June and most families of expats will go back to their countries afterwards for the summer vacation.

Health and wellness approach

Leading companies within the sugar confectionery seek to introduce healthier yet affordable types of products. An example of one of the popular sugar products in Saudi Arabia is halva.

Competitive Landscape

Deemah - United Food Industries Corp Ltd ranks first

Deemah - United Food Industries Corp Ltd is a local company offering many brands and products. The company has been working on growing its customers for the past few years and now ranks first ahead of leading international brand owners like Storck GmbH & Co, Sweets Co Of Oman, Halwani Bros Co, Al Wefaq Trading Est and National Confectionery & Tahina Factory.

Baqalahs drive the sugar confectionery category

Baqalahs is the biggest channel in sugar confectionery. The leading company, Deemah - United Food Industries Corp Ltd, mainly focuses on distributing its products in baqalahs as they are very close to people’s homes.

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