Saudi Arabia Chocolate Market By Product Type (White Chocolate, Milk Chocolate, Dark Chocolate), By Category (Organic, Regular, Gluten-Free, Sugar-Free, Others), By Distribution Channel (Supermarket & Hypermarket, Specialty Stores, Online, Others), By Region, Competition, Forecast & Opportunities, 2020-2030F

Market Overview

Saudi Arabia Chocolate market was valued at USD 1.02 Billion in 2024 and is expected to grow to USD 1.72 Billion by 2030 with a CAGR of 9.10%. The Saudi Arabia Chocolate market is experiencing significant growth, driven by several key factors. Rising disposable incomes, especially among the young and affluent population, have led to an increased demand for premium and luxury chocolate products. Also, the culture of gifting and social gatherings in Saudi Arabia plays a crucial role in boosting chocolate consumption, particularly during festive seasons like Ramadan and Eid. The growing presence of international chocolate brands, alongside the expansion of modern retail outlets and e-commerce platforms, has made a wide variety of chocolate products more accessible. Also, the increasing popularity of health-conscious chocolate options, such as sugar-free and organic varieties, caters to the evolving consumer preferences for healthier indulgence. Together, these factors are contributing to the rapid expansion of the chocolate market in Saudi Arabia.

Key Market Drivers

Rising Disposable Incomes and Affluent Young Population  

Rising disposable incomes and a youthful, affluent population are pivotal drivers of the Saudi Arabian chocolate market. As a part of this, according to a recent study, as of 2024, the average monthly disposable income across all households in the Kingdom stood at USD 3157.03, while Saudi households specifically reported a higher average of USD 4814.88. With over half of the population under 25 years old, urban millennials and Gen Z—approximately 23% of the populace—are increasingly inclined towards premium and artisanal chocolates, favoring quality and unique flavor profiles over mass-produced options. This demographic's higher income levels and exposure to global trends fuel their demand for luxury and exclusivity in confectionery choices. Consequently, the market has witnessed a surge in handcrafted chocolates, with annual growth rates reaching 10% in recent years. Also, the increasing willingness to pay a premium for chocolates with transparent sourcing and positive social impact initiatives further underscores the influence of this affluent, younger consumer base on the market's evolution.

Expansion Policies Adopted by Key Player

Key players in the Saudi Arabia chocolate market are implementing strategic expansion policies to meet the growing demand for premium and specialty chocolates. As a part of this, as of October 2024, Spanish tech company Macco Robotics, a leader in robotic technology solutions, has formed a strategic alliance with ABEET, the first Saudi chocolate manufacturer, as part of the Grow Food & Beverage Accelerator program. These strategies encompass investments in advanced manufacturing facilities, introduction of innovative product lines, and enhancement of distribution networks. By focusing on product innovation, such as introducing plant-based and allergen-free chocolates, companies aim to cater to the evolving consumer preferences for healthier and more inclusive options. Also, the expansion of distribution channels, including both traditional retail outlets and online platforms, ensures broader accessibility to their products. Through these comprehensive expansion policies, key players are positioning themselves to strengthen their presence in the competitive Saudi Arabian chocolate market and capitalize on emerging consumer trends.

Expansion Of Modern Retail Chains and E-Commerce Platforms

The expansion of modern retail chains and e-commerce platforms is a significant driver of the Saudi Arabia chocolate market. As a part of this, according to International Trade Administration, as of 2024, the number of Saudi internet users engaged in e-commerce (both buying and selling) is projected to reach 33.6 million, reflecting a 42% increase compared to 2019.As the retail landscape evolves, large-scale supermarkets, hypermarkets, and specialized gourmet stores have increasingly incorporated a wide range of chocolate products, catering to the growing demand for premium and international brands. This widespread availability makes it easier for consumers to access various chocolate offerings, from mass-market options to high-end, artisanal varieties. In parallel, e-commerce platforms are playing a crucial role in reshaping consumer purchasing behavior. With the rise of online shopping, consumers can now conveniently purchase chocolate products from the comfort of their homes, benefiting from diverse selections and home delivery services. The growth of digital platforms, supported by robust logistics and secure payment systems, has made it easier for both local and global chocolate brands to reach a wider audience across the Kingdom, further accelerating market growth.

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Key Market Challenges

High Import Dependence for Premium Chocolate Products

A key challenge in the Saudi Arabia chocolate market is the high dependence on imports for premium chocolate products. While local chocolate production has been growing, a significant portion of the demand for high-end and specialty chocolates is still met through imports, particularly from renowned international brands. This reliance on foreign suppliers exposes the market to risks associated with global supply chain disruptions, such as delays, higher shipping costs, and fluctuating currency exchange rates. Also, the cost of importing premium chocolate ingredients, like high-quality cocoa and exotic additives, can lead to higher prices for consumers, making these products less accessible to a broader audience. As the demand for luxury and artisanal chocolates continues to rise, the challenge remains for local manufacturers to scale up production capabilities, improve sourcing practices, and reduce their reliance on imports. Overcoming this challenge is critical for enhancing the sustainability and competitiveness of the Saudi chocolate industry.

Fluctuating Prices of Raw Material

Fluctuating raw material prices, particularly for cocoa, sugar, and other key ingredients, present a significant challenge to the Saudi Arabia chocolate market. Cocoa, being the primary ingredient in chocolate production, is highly sensitive to global market conditions, with prices often influenced by weather patterns, crop yields, and geopolitical factors in major cocoa-producing regions. These price fluctuations can lead to increased production costs for chocolate manufacturers, which may result in higher prices for consumers. In addition, the volatility of sugar and dairy prices further compounds the issue, making it difficult for local producers to maintain consistent pricing strategies. For premium chocolate brands that rely on high-quality ingredients, these fluctuations can also impact the quality and availability of their products. As a result, companies in the Saudi chocolate market must find ways to manage cost pressures, optimize their supply chains, and mitigate risks associated with raw material price instability to stay competitive.

Key Market Trends

Demand For Healthier Chocolate Option

The Saudi Arabia chocolate market is witnessing a notable shift towards healthier options, driven by increasing health consciousness among consumers. Dark chocolate, known for its higher cocoa content and potential health benefits, is gaining popularity among health-conscious individuals. Manufacturers are responding to this demand by offering a wider range of dark chocolate options. Also, sugar-free and low-sugar chocolate products have become more prevalent, catering to those looking to limit their sugar intake. These products typically use sugar substitutes or alternative sweeteners, such as stevia or erythritol, to provide a sweet taste without the added sugar calories. Health-focused ingredients, like nuts, fruits, and superfoods, are being incorporated into chocolates, providing a fusion of indulgence and nutritional value. Chocolatiers are also experimenting with ingredients like matcha, a green tea powder known for its antioxidant properties. The demand for healthier chocolate options aligns with global trends in mindful eating and is likely to continue influencing product development in the Saudi chocolate industry. Manufacturers must navigate the challenge of creating chocolates that are both indulgent and health-conscious, offering options that appeal to a broader range of consumers.

Surging Trend of Gifting Chocolate

The surging trend of gifting chocolate is a prominent factor driving the growth of the Saudi Arabia chocolate market. Chocolate has become a popular choice for gifts, especially during major celebrations, religious holidays, and family gatherings. Events such as Eid, Ramadan, and weddings have further amplified the demand for premium, artisanal, and luxury chocolate products, as consumers increasingly opt for high-quality chocolates as a gesture of appreciation or celebration. This trend is fueled by the growing culture of gifting, where chocolates are often seen as a symbol of goodwill, luxury, and indulgence. As a result, both local and international chocolate brands are tailoring their offerings to cater to this market, with customized packaging and seasonal gift sets. The rise in disposable income, along with the increasing inclination towards premium gifting options, has made chocolate a sought-after item for gift-giving, contributing to its growing market share in Saudi Arabia.

Local Production Expansion

The expansion of local chocolate production in Saudi Arabia is a significant trend reshaping the market landscape. Historically, the Kingdom relied heavily on imported chocolates to meet domestic demand. However, recent developments indicate a shift towards bolstering local manufacturing capabilities. This growth is driven by factors such as economic diversification initiatives, increased consumer demand for premium and artisanal chocolates, and a burgeoning middle class with a penchant for indulgent treats. Local brands are increasingly incorporating regional flavors and ingredients, aligning with cultural preferences and enhancing product appeal. While challenges like the absence of domestic cocoa cultivation persist, the government's support for food and beverage manufacturing is fostering innovation and entrepreneurship in the sector. This strategic focus on local production is expected to reduce import dependency and stimulate economic growth within the Kingdom.

Segmental Insights

Distribution Channel Insights

Supermarket/Hypermarket dominated the Saudi Arabia Chocolate market, primarily due to their extensive product range, convenient accessibility, and effective promotional strategies. These retail outlets offer a wide variety of chocolate products, catering to diverse consumer preferences, from mass-market options to premium and artisanal varieties. With locations across urban and suburban areas, supermarkets and hypermarkets provide easy access to chocolate, making it a go-to option for many shoppers. Also, these stores frequently employ promotional activities, such as discounts, seasonal offers, and loyalty programs, which further boost chocolate sales, especially during peak shopping periods like Ramadan and Eid. The strategic placement of chocolate products in high-traffic areas within these stores also encourages impulse buying, solidifying the dominance of supermarkets and hypermarkets in the Saudi chocolate market.

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Regional Insights

Western dominated the Saudi Arabia Chocolate market, driven by their strong global presence, brand recognition, and premium quality offerings. International chocolate brands, particularly from Europe and North America, have established a solid foothold in the Kingdom due to their reputation for high-quality products and innovative packaging. These brands cater to the growing demand for premium and specialty chocolates, positioning themselves as symbols of luxury and indulgence. Also, the Central region's is driven by its strategic location, robust infrastructure, and economic significance, making it a key hub for the chocolate market. Riyadh, the capital, serves as the central commercial and cultural center, where high disposable incomes and a growing population fuel demand for premium and specialty chocolate products. The region's strong retail presence, with numerous supermarkets, hypermarkets, and specialty stores, ensures widespread availability of chocolate brands, both local and international. Also, the Central region benefits from a high concentration of expatriates, further diversifying consumer preferences.

Recent Developments

• In June 2024, The Esports World Cup Foundation announced that KitKat, Nestlé’s chocolate brand, will be the main partner for the inaugural Esports World Cup in Riyadh, Saudi Arabia. KitKat will have a booth at the event, and its branding is expected to appear during broadcasts, on stage, and during breaks, aligning with the brand’s "Give Me a Break" slogan.
• In October 2024, Al Nassr has announced a new partnership with Snickers, one of the globe's most iconic chocolate brands, designating Snickers as the Official Chocolate Partner for the 2024/25 season. As part of the collaboration, Snickers' logo will be prominently displayed on the sleeve of Al Nassr's training kits, symbolizing a shared dedication to excellence both on and off the field.

Key Market Players  

• Mars, Incorporated
• Nestlé Middle East FZE
• Bateel International LLC
• The Hershey Company
• Ferrero International S.A.
• Meiji Holdings Co., Ltd
• Mondelēz International Inc.,
• Fujiya Co., Ltd
• Lotte Co., Ltd
• Barry Callebaut

Report Scope:

In this report, the Saudi Arabia Chocolate Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

•   Saudi Arabia Chocolate Market, By Product Type:

o   White Chocolate

o   Milk Chocolate

o   Dark Chocolate

• Saudi Arabia Chocolate Market, By Category:

o   Organic

o   Regular

o   Gluten-Free

o   Sugar-Free

• Saudi Arabia Chocolate Market, By Distribution Channel:

o   Supermarket & Hypermarket

o   Specialty Stores

o   Online

o   Others

• Saudi Arabia Chocolate Market, By Region:

o   Eastern

o   Western

o   Northern & Central

o   Southern

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in the Saudi Arabia Chocolate Market.

Available Customizations:

Saudi Arabia Chocolate Market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).

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