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Saudi Arabia Foodservice Market - Growth, Trends, COVID-19 Impact and Forecasts (2022 - 2027)

The Saudi Arabian Foodservice Market is segmented by Type (Full Service Restaurants, Quick Service Restaurants, Cafes, and the Catering or Institutional Food Sector); and by Structure (Independent Consumer Foodservice, and Chained Consumer Foodservice). The report offers market size and forecasts (in USD billion) for the above segments.

Market Snapshot

saudi arabia foodservice market
Study Period: 2016 -2027
Base Year: 2021
CAGR: 7.71 %
 food and beverage industry in saudi arabia

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Market Overview

The Saudi Arabian Foodservice market was valued at USD 27.8 Billion in 2021 and is projected to grow at a CAGR of 7.71% during the forecast period, 2022-2027.

There has been a definite impact of the coronavirus outbreak (COVID-19) on the overall foodservice business, with various segments being affected in varying degrees in Saudi Arabia. In-restaurant dining is the worst-hit segment, largely due to the travel curbs and a general avoidance of people getting into larger gatherings and social distancing regulations, thereby closing the increasing number of restaurants in the country and reducing their profits subsequently. For instance, HerfyFood Services Company, a Saudi food service company, reported a 16.40% drop in its revenue from 2019 to 2020 due to the impact of COVID-19 in the country (as per the annual report of Savola Group).

Over the medium term, the increasing demand for home delivery and foodservice providers is expected to drive the market’s growth. Increasing health consciousness and the growing rate of obesity among the Saudi Arabian population are challenging the market.

The full-service restaurant segment accounted for the major share in the market, owing to the strong presence of the millennial population, the growing tourism industry, and acceptance of western culture across the country. Consequently, the United States casual dining restaurants, such as Chili’s, Fuddruckers, TGI Fridays, Applebee’s, Sizzler, and On The Border, are very popular and located in all the major cities of Saudi Arabia.

Scope of the Report

Foodservice is all about food and beverages that are consumed out of the home. Consumers visit foodservice outlets for a number of reasons, including added convenience, to sample new tastes and flavors, to celebrate and to socialize. The Saudi Arabian foodservice market (henceforth, referred to as the market studied) has been segmented by type into full-service restaurants, quick-service restaurants, cafes, and catering or institutional food sector. In terms of the structure, the market studied has been segmented into independent consumer foodservice, and chained consumer foodservice. For each segment, the market sizing and forecasts have been done on the basis of value (USD billion).

By Type
Full Service Restaurants
Quick Service Restaurants
Cafes
Catering or Institutional Food Sector
By Structure
Independent Consumer Foodservice
Chained Consumer Foodservice

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Key Market Trends

Strong Influence of Western Culture in the Market

Saudi Arabia's food service has been experiencing rapid socio-cultural changes over the past two years, mainly due to the accelerating economy, which allowed people to travel from the country to western countries for tourism and education, thus exposing them to western food and culture. The market studied unveiled a raft of significant tourism activities in Saudi Arabia, thus proving that the country is moving toward becoming a world-class global tourism hub. With limited options available for entertainment, the culture of eating at restaurants/food trucks gained higher preference in the country. This augmented the demand for global cuisines, thus boosting the number of foodservice outlets.

Dining at quick service and fast-food restaurants or going to cafes/coffee shops emerged as a primary way to socialize with friends. Dining at fast-food chains is considered a key driver enabling rapid expansion of the fast-food industry in the kingdom. As a result, international food chains are continuously expanding their stores in the country. For instance, in May 2021, CEC Entertainment, the parent company of American fast-food brand Chuck E Cheese planned to open 100 new outlets around the world over the years, with at least 25 in Saudi Arabia. Hence, the industry gained momentum, and the market studied witnessed strong growth in all foodservice categories.

food and beverage companies in saudi arabia

Full-service Restaurants Led the Market Growth

The full-service restaurant segment is highly competitive in Saudi Arabia, owing to the presence of a large number of small and major players. The country’s consumers, including the high number of ex-pats and tourists, are tilted toward western-style casual dining, especially the European and American cuisines.

Consequently, the United States casual dining restaurants, such as Chili’s, Fuddruckers, TGI Fridays, Applebee’s, Sizzler, and On The Boarder, are very popular and located in all the major cities of Saudi Arabia.​ Independent foodservice channels maintain a dominant position in the full-service restaurant segment, as they provide dine-in restaurant services with an extensive menu.​ During Ramadan, to attract consumers, full-service restaurants, including Hyatt Regency Tent and The Ritz-Carlton Residences, are trying to compete with local restaurants to provide a better culinary experience, which is driving the market further.

 food industry in saudi arabia

Competitive Landscape

The Saudi Arabian foodservice market is a fragmented and competitive market with numerous players existing in the market. Key players in the market include Mc Donald’s Corporation, Yum! Brands Inc., Herfy Food Services Co., Albaik Food Systems Co. SA, and Domino's Pizza Inc., among others. There exists stiff competition among the foodservice providers based on pricing, quality of food service, calorie intake per meal, and healthier menu options. Restaurants across foodservice channels have started changing their business strategies such as expansion, partnership, and innovation. The players are boosting sales by venturing into home delivery and online foodservice channels, thereby gaining popularity.

Recent Developments

  • In December 2021, Riyadh international Catering Service, the franchisee of McDonald's restaurants in the central, eastern, and northern regions of the Kingdom, opened its 200th branch on Riyadh Boulevard.
  • In November 2021, Dominos launched a new side item, Domino’s Oven-Baked Dips, in three unique flavors: Cheesy Marinara, Five Cheese, and Baked Apple to pair with Domino’s Bread Twists.
  • In May 2021, Kudu and Easternpak collaborated to develop a new and sustainable product, the Kudu Breakfast Box. This one-of-a-kind packaging was created in response to a demand for a unique breakfast box design that would store the meal, while adding two holes for coffee cups, making it even more practical.

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

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Drivers

    2. 4.2 Market Restraints

    3. 4.3 Industry Attractiveness - 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 By Type

      1. 5.1.1 Full Service Restaurants

      2. 5.1.2 Quick Service Restaurants

      3. 5.1.3 Cafes

      4. 5.1.4 Catering or Institutional Food Sector

    2. 5.2 By Structure

      1. 5.2.1 Independent Consumer Foodservice

      2. 5.2.2 Chained Consumer Foodservice

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Strategies Adopted by Leading Players

    2. 6.2 Market Share Analysis

    3. 6.3 Company Profiles

      1. 6.3.1 McDonald's Corporation

      2. 6.3.2 Domino's Pizza Inc.

      3. 6.3.3 Yum! Brands Inc.

      4. 6.3.4 Restaurant Brands International Inc.

      5. 6.3.5 Starbucks Corporation

      6. 6.3.6 Herfy Food Services Co. (Savola Group)

      7. 6.3.7 Albaik Food Systems Company SA

      8. 6.3.8 Al Tazaj

      9. 6.3.9 Americana Group Inc.

      10. 6.3.10 Shawaya House

    4. *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 Foodservice Market market is studied from 2016 - 2027.

The Saudi Arabia Foodservice Market is growing at a CAGR of 7.71% over the next 5 years.

Mc Donald's Corporation, Yum! Brands Inc., Herfy Food Services Co. , Albaik Food Systems Co. SA , Domino's Pizza Inc. are the major companies operating in Saudi Arabia Foodservice Market.

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