Naturally Healthy Packaged Food in Saudi Arabia

PROSPECTS

Distribution of NH packaged food continues to expand

At the end of the review period, rising population growth and the large distribution networks of modern grocery retailers in Saudi Arabia enabled manufacturers and distributors of NH packaged food to expand their brand offerings, especially in health and wellness categories. This continued to benefit the performance of NH packaged food.

Local tradition boosts value sales growth of specific NH packaged food products

For generations specific NH packaged food types have been traditionally consumed in Saudi Arabia. For example, olive oil has traditionally been used in cooking as part of the typical Middle Eastern diet and as a condiment for salads and traditional dips.

Rise in cost of living hampering growth of NH packaged food

The rising cost of living and economic slowdown continued to hamper volume and current value growth rates of NH packaged food in 2018. While consumers continued to buy NH products, many altered their purchasing behaviour to save money by swapping their favourite brands for cheaper brands or private label.

COMPETITIVE LANDSCAPE

Led by Almarai, local players continue to characterise NH packaged food

Almarai continued to lead NH packaged food in 2018 thanks to its flagship bread and pastry brand L'Usine. Local manufacturers such as Almarai offer high quality but affordable products, and have an additional advantage over multinationals in categories such as NH high fibre bread due to the short shelf lives of these products.

Intense competition prompts companies to launch promotions

Intense competition and a reduction in consumer spending continued to urge NH packaged food players to increase in-store promotions in 2018, particularly in large supermarkets and hypermarkets. Companies including Almarai and Nestlé, once again utilised branded in-store displays to attract consumers, while others engaged in frequent discounting and bulk promotions.

Weak product development linked to economic slowdown

Due to higher production costs brought about by increases in water and energy prices, there were few new product launches in NH packaged food in 2018. International brands were also cautious about introducing new products given their higher operating costs in the form of higher customs fee, amidst a slower economy and price-sensitive consumer base.

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