Since the outbreak of the COVID-19 pandemic in 2020, ice cream has suffered a dramatic decline in demand. This decline was primarily due to the lack of impulse purchases and on-the-go consumption, as consumers in Saudi Arabia faced periods of home seclusion and restrictions on their freedom of movement in the Kingdom.
In 2021, consumers are expected to remain price sensitive as a result of both the lasting economic instability caused by the COVID-19 pandemic, and the implementation of a rise in VAT which took place in 2020. The higher cost of living and reduced spending power is prompting consumers to limit their spending on non-essential items and, with ice creams and frozen desserts more often perceived as a treat, this factor will continue to have a negative impact on sales in 2021.
IFFCO Group will retain its lead in ice cream and frozen desserts in 2021. The company is expected to increase its value share in the year, due to its wide-ranging product offer across categories and high levels of consumer recognition of its Igloo and London Dairy brands.
Over the forecast period, retail current value and retail volume sales of ice cream and frozen desserts are expected to post a gradual recovery, returning to positive growth rates. This will be driven primarily by sales to children now that schools have reopened, as children are an important consumer base for this category.
Over the forecast period, sales of imported brands are expected to struggle as a result of new customers applied to imports since the end of the review period. These new customs will make it more expensive to import brands from abroad, and more expensive for consumers to purchase imported brands.
Weather conditions in Saudi Arabia, one of the hottest countries in the Middle East, favour sales of ice cream. People often try to cool themselves down by eating ice cream and the category is expected to see significant retail volume growth over the forecast period.
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This report originates from Passport, our Ice Cream and Frozen Desserts research and analysis database.
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