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