Market Trends of Saudi Arabia Food & Beverage Industry
Rising Expenditure on Organic and Clean Label Products
- The organic food and beverage industry is anticipated to grow significantly due to the surge in demand for Clean-label food and beverage products in the country. Consumers are much more aware of the foods and beverages they consume. To ensure that every product is organic and sustainable, they want to learn about the food and drink ingredients, their source, and government authority certificates.
- With the changing lifestyle, consumers are more conscious about their health. Therefore, consumers prefer more organic food and beverages than any other confectionary food. Moreover, due to the rise in income, consumers can now afford organic products as they are a little more expensive than conventional ones.
- Organic food and beverages provide consumers with good health benefits, as these organic products are preservative-free and are produced using natural ingredients. Organic animal-based products such as meat and chicken are also genetically modified organisms (GMO)-free. Due to the emerging demand for organic food, sales growth is rising concurrently. The need for organic food is increasing thus, as consumers prefer more natural food and beverages instead of chemically preserved foods, which is one of the significant reasons for driving the market growth.
- Moreover, governments are taking the required initiative to promote healthy eating. For instance, In August 2023, Officials from the Saudi Ministry of Environment, Water, and Agriculture signed two agreements to transform agricultural plant products into plant-based foods with animal protein flavor. With the agreements, the ministry aims to promote a culture of healthy food within communities while looking to provide locally made, high-quality vegetarian alternatives and utilize advanced technologies for producing meat and dairy substitutes. All of these factors are contributing to the market's growth.
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Rising Demand for Dairy Products in the Country
- Dairy products are an important part of the Saudi Arabian diet, and the consumption of milk and milk products is high in the country. The Saudi Arabian dairy market is expected to continue to grow over the medium term, driven by factors such as population growth, urbanization, rising disposable incomes, and changing dietary habits. The country gives high importance to dairy products to meet its dietary requirements, which drives the milk market.
- Additionally, several Saudi Arabian dishes require milk and cheese in their preparation, thereby propelling the demand for milk in household consumption. Consumer preference is shifting toward fresh milk. Food and nutrition awareness is expanding within Saudi households. Hence, dairy manufacturers, particularly long-life milk producers, are targeting children by offering a variety of flavored milk.
- Furthermore, due to the associated benefits, consumer preference is observed to be deviating from cow milk to other sources, such as camel milk products, owing to its high antioxidant levels, which help prevent damage to cells that can lead to serious diseases such as cancer, diabetes, and heart diseases.
- Moreover, products like cheese and butter are also gaining traction in the market. The increasing popularity of Western cuisines drives the cheese market, increased disposable incomes, and the development of several flavored cheese products such as pepper, garlic, red chili flakes, and oregano pickles. Due to its versatility, it can satisfy the various tastes and preferences of people across the nation. In recent years, demand for processed cheese has increased among consumers due to the changing consumption pattern and increasing adoption of Western-style cuisine.
- In addition, due to its widespread use of butter in home cooking, particularly baking, butter and its varieties, such as clarified butter, cultured butter, churned butter, fine butter, salted butter, and unsalted butter, are in high demand nationwide. The consumption of butter has been steadily rising each year by 2%, according to the Organization for Economic Co-operation and Development (KSA) study from 2020. All of these factors are positively impacting the segment's growth.
