Executive Summary

Aug 2018
Prospects
Younger generation drives the cheese category

Young people in Saudi Arabia are known for their focus on healthier lifestyles through taking care of their diet and eating healthy meals. They tend to concentrate more on the labelling of products, stating whether products are low fat, low cholesterol, organic etc.

Soft cheese sees the most dynamic growth

As health awareness started growing among different consumers in Saudi Arabia, there was more of a shift towards healthier cheese types. Some of the most popular cheese types in the country are the low-salt and low-fat cheese such as white feta and shredded mozzarella.

Cheese is still impacted by the economy

The overall cheese category was affected by the economic situation which continued across Saudi Arabia, since VAT implementation started in 2018 and had a lot of impact on Saudi Arabian business in general. Moreover, the continued departure of lot of expatriates and their families from the country led to the shrinking of the population which is set to slow down towards the end of the year.

Competitive Landscape
Almarai Co Ltd remains number one when it comes to cheese

Almarai Co Ltd remained the leading player within cheese in 2018 thanks to its well-known brand locally and internationally which continued to grow despite the increase in prices and general economic situation. The company is well known for its cheese products, like feta cheese, cheese slices, squared cheese, cream cheese, mozzarella cheese, packaged hard cheese and processed cheese.

Fromageries Bel maintains its popularity

Fromageries Bel remained popular in Saudi Arabia, thanks to its well-known brand La Vache Qui Rit which is favoured especially by younger generations. Fromageries Bel kept focusing on serving and satisfying its consumers by introducing new and innovative products such as the spreadable processed cheese – La Vache Qui Rit Creamy.

Hypermarkets attract more consumers

Hypermarkets increased it sales share in Saudi Arabia in 2018 not only in cheese but many packaged food categories, thanks to its focus on offering competitive promotions for consumers, especially those looking to save more and pay for the most affordable options to minimise basket value. Since VAT implementation, prices increased significantly, so hypermarkets was definitely a winning channel in Saudi Arabia in 2018.

Prospects
Current economic situation impacts drinking milk products

The economic situation impacted the milk market in a negative way, with lower growth in 2018 and consecutive declines from 2016. This returned to many factors including Saudization which led to the departure of a huge number of expatriate families from the country.

Flavoured milk drinks faces a tough outlook

Flavoured milk drinks was the category within the milk industry most affected by the economic situation, as consumers tried to limit purchases according to their prioritised needs. In 2017 still, most channels’ refrigerators were coloured by the different milk flavours from strawberry, chocolate and banana, to many more flavours, but in 2018 this ceased to be the case in supermarkets for instance, the more dominant category being plain milk products.

Milk is the dominant category

Milk is considered to be an essential commodity for consumers since different family members of all ages drink milk or use it for cooking. Full fat fresh milk remained the biggest category within milk since it had the largest value share in 2018.

Competitive Landscape
Almarai Co Ltd maintains lead in drinking milk products

Almarai Co led drinking milk products in 2018, and is one of the leaders in global dairy in general. Almarai Co was not significantly impacted by the recent changes in the Saudi Arabian economy such as the VAT implementation and Saudization, so its position remained stable.

Organic milk starts to gain attention

Organic milk became more popular recently in Saudi Arabia, mainly influenced by younger generations who tend to focus more on a healthier lifestyle. Despite the fact that organic milk had a minimal sales share, it started gaining popularity in Saudi Arabia, due to its advantages.

Arla Foods Amba GBO booms in Saudi Arabia

Arla Foods Amba was considered the most significant GBO, gaining huge attention in Saudi Arabia in 2018, with everyone talking about how fast this company grew within such a tough period and short time. It is considered to be the world’s largest producer of organic dairy products and launched its first branded organic milk in Saudi Arabia.

Prospects
Ramadan influences the category

Saudi Arabia experienced many tricky economic situations over the past few years, but 2018 was considered to be the toughest year for the country to date. Many factors led to this turbulence such as VAT implementation and the huge number of expatriates leaving the country.

Plain yoghurt accounts for the largest sales

Plain yoghurt experienced the strongest value share in 2018, driven by the growing health consciousness of Saudi Arabian consumers. Plain yoghurt is widely consumed in many different ways from as it is and also in many cooking recipes.

Healthy product launches are key in Saudi Arabia

Throughout the years, yoghurt manufacturers tried to bring new concepts and innovation to the yoghurt category to make it more interesting and attractive for consumers, hence maintaining their dynamic presence in the country despite the tough economic situation the country experienced. At the forefront of these companies is Al Othman Agricultural & Processing Co, which introduced Nada Greek-style yoghurt in 2017 that was much cheaper than other imported Greek yoghurt products currently available in Saudi Arabia.

Competitive Landscape
Almarai Co remains in top position

Almarai Co Ltd led yoghurt and sour milk products in 2018. With its well-known Almarai brand it enjoyed strong loyalty among local consumers thanks to the popularity of its high-quality and innovative products.

Nada Greek yoghurt is the biggest innovation

Al Othman Agricultural & Processing Co introduced Nada Greek yoghurt in 2017, which was much cheaper compared to other imported Greek yoghurt products currently available in the country. In 2018 it launched the zero per cent fat Nada Greek yoghurt which is a better option for those who are interested in healthier eating.

NADEC acquires Al Safi Danone Ltd

In 2018 The National Agricultural Development Company (NADEC) announced that it acquired Al Safi Danone Company (ASD) in a transformative transaction that will reinforce its position as a leading regional dairy and beverage player. Al Safi Danone Ltd is a producer of dairy and juice products and a joint venture between Saudi Arabia’s Al Safi Group of Companies and French food company Danone.

Prospects
Saudi Arabian economy experiences turbulence

Prices continued to rise as a result of VAT implementation and Saudization which were considered to be the two main factors affecting the market. As a result of the price rises and the increasing expenses applied to expat families, many will return to their countries as normal for the summer holidays after Ramadan and once the schools break up but this time may not return to Saudi Arabia.

Tough period for the other dairy category

Other dairy witnessed a slight decline in 2018 compared to the review period overall. This was a result of slower growth in almost all categories, notably in chilled dairy desserts and flavoured condensed milk.

Reduced fat cream is the most dynamic category

Cream is traditionally considered to be an important ingredient in the Saudi Arabian diet, used in many recipes for both savoury and sweet dishes. A large variety of cream is found in almost all channels, such as whipping, cooking, sterilised and breakfast cream, as well as sour cream, all available at affordable prices.

Competitive Landscape
Pinar Dairy Food Co leads fromage frais and quark

Pinar Dairy Food Co led the fromage frais and quark category in 2018. The brand enjoyed strong loyalty among local consumers thanks to its well-known brand which remained popular due to its high-quality and innovative products.

Rainbow is the leading brand in flavoured condensed milk

Friesland Arabia Ltd led flavoured condensed milk in 2018 with its Rainbow brand, the only brand in Saudi Arabia selling condensed milk in flavours like cardamom. Saudi Arabian society has a traditional love of cardamom which is used in the Arabic coffee which is one of the most popular drinks.

Local players maintain key presence in other dairy

Generally speaking, the leaders in other dairy were local, including National Food Industries Co, Almarai Co and NADEC. However, regional and global companies were also able to gain significant shares, including Nestlé, Pinar Dairy Food Co and Friesland Arabia.

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Overview

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.

Find hidden opportunities in the most current research data available, understand competitive threats with our detailed market analysis, and plan your corporate strategy with our expert qualitative analysis and growth projections.

If you're in the Dairy industry in Saudi Arabia, our research will save you time and money while empowering you to make informed, profitable decisions.

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?

Why buy this report?

  • Gain competitive intelligence about market leaders
  • Track key industry trends, opportunities and threats
  • Inform your marketing, brand, strategy and market development, sales and supply functions

This industry report originates from Passport, our Packaged Food market research database.

Butter and Spreads

Cheese

Drinking Milk Products

Other Dairy

Yoghurt and Sour Milk Products

Packaged Food in Saudi Arabia - Industry Overview

EXECUTIVE SUMMARY

Packaged food registers higher retail value growth
Health and wellness remains a growing trend
Artisanal maintains the lead in packaged food
Modern grocery retailers achieves a good performance
Packaged foods to continue to register stable growth in the forecast period

FOODSERVICE

Sales to Foodservice
Foodservice records steady value growth
Powder milk remains the weakest performer
Large number of suppliers support foodservice
Consumer Foodservice
Growth negatively impacted by economic issues
Technology and social media advancing consumer foodservice
Mandatory calorie counts currently on all operators’ menus

CATEGORY DATA

Table 1 Foodservice Sales of Packaged Food by Category: Volume 2013-2018
Table 2 Foodservice Sales of Packaged Food by Category: % Volume Growth 2013-2018
Table 3 Forecast Foodservice Sales of Packaged Food by Category: Volume 2018-2023
Table 4 Forecast Foodservice Sales of Packaged Food by Category: % Volume Growth 2018-2023

MARKET DATA

Table 5 Sales of Packaged Food by Category: Volume 2013-2018
Table 6 Sales of Packaged Food by Category: Value 2013-2018
Table 7 Sales of Packaged Food by Category: % Volume Growth 2013-2018
Table 8 Sales of Packaged Food by Category: % Value Growth 2013-2018
Table 9 GBO Company Shares of Packaged Food: % Value 2014-2018
Table 10 NBO Company Shares of Packaged Food: % Value 2014-2018
Table 11 LBN Brand Shares of Packaged Food: % Value 2015-2018
Table 12 Penetration of Private Label by Category: % Value 2013-2018
Table 13 Distribution of Packaged Food by Format: % Value 2013-2018
Table 14 Distribution of Packaged Food by Format and Category: % Value 2018
Table 15 Forecast Sales of Packaged Food by Category: Volume 2018-2023
Table 16 Forecast Sales of Packaged Food by Category: Value 2018-2023
Table 17 Forecast Sales of Packaged Food by Category: % Volume Growth 2018-2023
Table 18 Forecast Sales of Packaged Food by Category: % Value Growth 2018-2023

SOURCES

Summary 1 Research Sources