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Saudi Arabia Dairy Products Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

The Saudi Arabia Dairy Products Market is segmented by Product Type (Milk, Cheese, Yogurt, Dairy Desserts, and Other Product Types) and Distribution Channel (Supermarkets and Hypermarkets, Convenience Stores, Online Retail, and Other Distribution Channels).

Market Snapshot

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Study Period: 2016 - 2026
Base Year: 2020
CAGR: 4.71 %

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Market Overview

The Saudi Arabian dairy products market was valued at USD 4,807.70 million in 2020, and it is projected to register a CAGR of 4.71 % during the forecast period (2021-2026).

COVID-19 has a significant impact on businesses and economies. COVID-19 has led to a major consumer shift, as customers are trying out new brands in the low-stock environment. During the initial wave of business and community shutdowns, dairy products were in high demand online, with e-commerce prices and out-of-stock levels increasing as more shoppers shifted from brick-and-mortar retailers due to COVID-19. A major issue is the disrupted supply chains, including dairy snacks, as, during the lockdown, Saudi Arabia closed their borders or raised trade barriers. However, during the lockdown, there was a rising interest in cooking and baking at home, which has led to the increased demand for dairy products like milk, butter, and cream. Also, the increasing demand for innovative on-the-go dairy products is consistently trending in the country as it is a quick and convenient source of nutrition, energy, and protein.

Over the medium term, the Saudi Arabian dairy market is marked by high consumption of milk and milk products, as dairy forms a major part of the Saudi Arabian diet. The country gives high importance to dairy products to meet its dietary requirements, which drives the dairy market. Additionally, several Saudi Arabian dishes require milk and cheese in their preparation, thereby propelling the demand for the dairy market in household consumption. Saudi Arabia also stands out as a major dairy importer globally, importing large volumes of milk and dairy products, including cheese. According to the data published by UN Comtrade, in 2018, Saudi Arabia was the second-largest importer of processed cheese worldwide, after the United Kingdom, with imports amounting to a value of over USD 253 million in the same year. Product innovations with respect to cheese have also been driving the market studied, as leading market players have frequently been launching new and competitive products that favor market growth by increasing the usage of dairy products for different purposes.

Scope of the Report

Dairy products are produced from the milk of mammals, most commonly cattle, water buffaloes, goats, sheep, and camels. Dairy products include food items such as yogurt, cheese butter, and other fermented drinks, like buttermilk, laban, etc.

The Saudi Arabian dairy market is segmented by product type, which includes milk, cheese, yogurt, dairy desserts, and other product types. By distribution channel, the market is segmented into supermarkets and hypermarkets, convenience stores, online retail, and other distribution channels. For each segment, the market sizing and forecast have been done in value terms of USD million.

Product Type
Milk
Cheese
Yogurt
Dairy Desserts
Other Product Types
Distribution Channel
Supermarkets and Hypermarkets
Convenience Stores
Online Retail
Other Distribution Channels

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Key Market Trends

Augmented Demand for Processed Dairy Products

The Saudi Arabian dairy market is marked by the high consumption of milk and milk products, as dairy forms a major part of the Saudi Arabian diet. The country gives high importance to dairy products to meet its dietary requirements, which drives the dairy market. Additionally, several Saudi Arabian dishes require milk and cheese in their preparation, thereby propelling the demand for the dairy market in household consumption.

The market studied witnessed a spectacular growth in the demand for processed dairy cheese. According to Almarai, a leading Saudi-based dairy company, in 2016, Saudi Arabia (KSA) held the largest share of 68.8% in the GCC processed cheese market, representing an exceptional demand for cheese in the country compared to others countries in the GCC region.

Saudi Arabia also stands out as a major dairy importer globally, importing large volumes of milk and dairy products, including cheese. According to the data published by UN Comtrade, in 2018, Saudi Arabia was the second-largest importer of processed cheese worldwide, after the United Kingdom, with imports amounting to a value of over USD 253 million in the same year.

Product innovations with respect to cheese have also been driving the market studied, as leading market players have frequently been launching new and competitive products that favor market growth by increasing the usage of dairy products for different purposes.

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Milk Remains the Largest Segment

Saudi dairy producers, particularly of milk, have always been the market leaders in the Gulf in terms of quality and quantity. Saudi dairy producers not only sell their products in the Kingdom but within the entire Gulf region, especially the United Arab Emirates, from their farms and plants in the Eastern and Central Provinces. The rising per capita milk consumption, an increasing population, and the demand for a nutrient-rich diet are rapidly driving the market's growth. Milk is a good source of protein, calcium, magnesium, potassium, Vitamin B12, and others which can play a key role in improving bone health, cognitive function, muscle growth, as well as facilitating weight loss. Thus, these factors are further driving the sales of milk in the country. The expanding population and the development in retail opportunities, which offer a variety of white milk products under the following labels: low-fat, vitamin-enriched, and organic, boost the demand. Furthermore, the popularity of new product lines, such as on-the-go portion packs of flavored milks, is boosting the market studied.

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Competitive Landscape

The dairy market in Saudi Arabia is highly competitive, with a large number of local players catering to the demand for milk products in the country. Some of the major companies are Almarai Company, Sadafco, National Agriculture Development Company (NADEC), and Al Safi Danone Company (ASD), holding a major market share, among others. The major players are focusing on introducing new and innovative products in the market to cater to the interests of the consumers. New product innovation is the most preferred strategy in the dairy snacks market. Additionally, the companies are following strategies that include the provision of products through e-commerce (own website and third parties) websites to facilitate a larger targeted audience. Moreover, in order to gain a competitive advantage, the key players try to differentiate their offerings and compete on different factors, including product offerings, flavor, price, quality, packaging format, and marketing activities.

Recent Developments

In September 2020 - The Almarai Company launched hummus, milkshakes, drinkable Greek yogurt, and honey to broaden its product portfolio.

In July 2019 - Arla Foods entered into an agreement with Kraft Heinz Company for a new royalty-bearing license to use the Kraft mark in the Middle East countries like United Arab Emirates, Saudi Arabia, Qatar, and Kuwait in connection with cheese products.

In March 2018 - SADAFCO announced to open its new state-of-the-art Jeddah Central Warehouse. This new facility is likely extended as a logistics hub for the company’s Jeddah Factory for its raw, packaging, and finished goods materials, and it may house cone and biscuits bakery facilities for its ice cream business, delivering both significant operational efficiencies and cost savings.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

    1. 3.1 Market Overview

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Drivers

    2. 4.2 Market Restraints

    3. 4.3 Porter's Five Forces Analysis

      1. 4.3.1 Threat of New Entrants

      2. 4.3.2 Bargaining Power of Buyers/Consumers

      3. 4.3.3 Bargaining Power of Suppliers

      4. 4.3.4 Threat of Substitute Products

      5. 4.3.5 Intensity of Competitive Rivalry

  5. 5. MARKET SEGMENTATION

    1. 5.1 Product Type

      1. 5.1.1 Milk

      2. 5.1.2 Cheese

      3. 5.1.3 Yogurt

      4. 5.1.4 Dairy Desserts

      5. 5.1.5 Other Product Types

    2. 5.2 Distribution Channel

      1. 5.2.1 Supermarkets and Hypermarkets

      2. 5.2.2 Convenience Stores

      3. 5.2.3 Online Retail

      4. 5.2.4 Other Distribution Channels

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Most Active Companies

    2. 6.2 Market Share Analysis

    3. 6.3 Key Strategies Adopted by Leading Players

    4. 6.4 Company Profiles

      1. 6.4.1 Almarai Company

      2. 6.4.2 Sadafco

      3. 6.4.3 AlsafiDanone

      4. 6.4.4 Nestle

      5. 6.4.5 Mondelez International

      6. 6.4.6 Arla Foods

      7. 6.4.7 Al Faisaliah Group

      8. 6.4.8 Fonterra Co-Operative Group Limited

      9. 6.4.9 BEL SA

    5. *List Not Exhaustive
  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

  8. 8. IMPACT OF COVID-19 ON THE MARKET

**Subject to Availability

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Frequently Asked Questions

The Saudi Arabia Dairy Products Market market is studied from 2016 - 2026.

The Saudi Arabia Dairy Products Market is growing at a CAGR of 4.71% over the next 5 years.

The Saudi Arabia Dairy Products Market is valued at 4807 Million USD in 2016.

Almarai Company, Nestle, AlsafiDanone, Sadafco, Mondelez International are the major companies operating in Saudi Arabia Dairy Products Market.

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