|
Forecast
Period
|
2024-2028
|
|
Market
Size (2022)
|
USD 6219.39 Million
|
|
CAGR
(2023-2028)
|
5.76%
|
|
Fastest
Growing Segment
|
Yogurt
|
|
Largest
Market
|
Eastern
|
Market Overview
Saudi Arabia Dairy Market has valued at USD 6219.39
million in 2022 and is anticipated to project robust growth in the forecast
period with a CAGR of 5.76% through 2028. Saudi Arabia's dairy industry has
experienced remarkable growth and transformation in recent years. Traditionally
reliant on imports to meet its dairy needs, the country has made substantial
investments in domestic dairy production, striving for self-sufficiency and
food security. This shift has been driven by various factors, including a
rapidly growing population, changing dietary preferences, and government
initiatives to reduce dependence on imports.
Saudi Arabia's dairy sector encompasses a wide
range of products, including milk, yogurt, cheese, and other dairy derivatives.
Major players in the industry include Almarai, the largest integrated dairy
company in the region, and other prominent local and international brands.
Government support and investment have been
instrumental in boosting the local dairy industry. Initiatives such as the King
Salman Program for Agricultural Development and the privatization of dairy
farms have facilitated expansion and technological advancement in the sector.
Additionally, modern dairy farms and processing facilities, equipped with
cutting-edge technology, have contributed to increased productivity and product
quality.
The Saudi government's commitment to achieving
self-sufficiency in dairy production aligns with its broader vision for
economic diversification and sustainability. As the industry continues to
evolve, it presents significant opportunities for both domestic and foreign
investors interested in contributing to the country's dairy production and
supply chain.
Key Market Drivers
Government-Led Self-Sufficiency Initiatives
One of the primary drivers of change in the Saudi
Arabian dairy industry is the government's commitment to achieving
self-sufficiency in food production, including dairy. The country has
traditionally relied on imports to meet its dairy needs, but this dependence on
foreign sources became a concern for food security. To address this issue, the
Saudi government launched several initiatives aimed at boosting domestic dairy
production.
The "King Salman Program for Agricultural
Development" is a key initiative that provides funding and support to
local farmers and agribusinesses. It includes subsidies, low-interest loans,
and technical assistance to encourage investment in modern farming practices
and dairy production. Through this program, the government aims to increase the
country's self-sufficiency in dairy products and reduce its reliance on
imports.
Additionally, the government has taken steps to
privatize dairy farms and encourage investment in the sector. This has
attracted both domestic and international investors, resulting in the
establishment of modern dairy farms equipped with advanced technologies and
improved infrastructure.
Rising Domestic Demand
The rapid population growth in Saudi Arabia has
driven an increase in domestic demand for dairy products. As the population
continues to expand, so does the need for dairy products, such as milk, yogurt,
and cheese. Additionally, changing dietary preferences and a growing awareness
of the nutritional benefits of dairy consumption have contributed to the rising
demand for these products.
To meet this increasing demand, the Saudi dairy
industry has had to expand and modernize its production capabilities. Local
dairy companies have invested in new processing facilities and technology to
ensure a stable supply of high-quality dairy products to the growing consumer
base.
Technological Advancements and Modernization
Technological advancements have played a crucial
role in driving the growth and modernization of the Saudi Arabian dairy
industry. Local dairy companies have adopted state-of-the-art equipment and
practices to enhance the efficiency of dairy production, from farming to
processing and packaging.
Modern dairy farms in Saudi Arabia are equipped
with automated milking systems, advanced cooling and storage facilities, and
improved herd management techniques. These technologies not only increase
productivity but also ensure the health and welfare of dairy animals. In the
processing sector, there is a focus on maintaining strict quality control
standards, which is essential for producing dairy products that meet the
expectations of local and international consumers.
The incorporation of technology has also allowed
dairy producers to diversify their product offerings. In addition to
traditional dairy items, there is an increasing focus on producing value-added
products, such as flavored yogurts, fortified milks, and lactose-free
alternatives. These innovative products cater to changing consumer preferences
and provide opportunities for growth in the industry.
Export Opportunities and Economic Diversification
Saudi Arabia's dairy industry has recognized the
potential for export growth, and this realization has become a key driver for
industry development. The government's focus on economic diversification, as
outlined in its Vision 2030 plan, includes a strong emphasis on expanding
non-oil sectors. Dairy production is considered a promising sector for both
domestic consumption and export.
By enhancing the quality and safety of dairy
products, Saudi Arabia can tap into regional and international markets.
Neighboring countries in the Gulf Cooperation Council (GCC) are natural export
destinations, and Saudi dairy companies have been exploring opportunities to
establish a regional presence. These exports contribute to economic
diversification and revenue generation, aligning with the government's broader
goals.
To facilitate exports, Saudi dairy companies are
working to meet international quality and safety standards, such as HACCP
(Hazard Analysis and Critical Control Points) and ISO certification. These
certifications improve the industry's competitiveness in global markets and
provide a valuable selling point for export opportunities.
In conclusion, the Saudi Arabian dairy industry is
undergoing a significant transformation, with various drivers pushing it toward
self-sufficiency, modernization, and export orientation. Government-led
initiatives, rising domestic demand, technological advancements, and export
opportunities all play a crucial role in shaping the industry's current
landscape and future prospects. As the industry continues to evolve and adapt
to these drivers, it presents promising opportunities for investors, both within
the country and abroad, and contributes to the country's broader goals of
economic diversification and food security.
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Key Market Challenges
Water Scarcity and Feed Supply
Saudi Arabia's arid climate and limited water
resources pose a significant challenge to the dairy industry. Water is a
critical resource for both the cultivation of animal feed and the hydration of
dairy cattle. The cultivation of water-intensive crops, such as alfalfa, used
for cattle feed, has put immense pressure on water resources. As the country
strives for self-sufficiency in dairy production, the need for sustainable
water management practices and alternative feed sources becomes increasingly
urgent.
To address this challenge, the Saudi government has
initiated efforts to reduce water usage in agriculture and promote more
efficient irrigation techniques. Additionally, there is a growing emphasis on
researching and adopting drought-resistant crops and alternative animal feeds
that require less water.
Quality and Safety Standards
Meeting international quality and safety standards
is crucial for the Saudi dairy industry's growth and export potential. While
there have been significant advancements in technology and practices,
maintaining consistent quality and safety can be challenging. Ensuring that
dairy products meet strict quality standards is essential for domestic
consumption and export to international markets.
The industry must address issues related to quality
control, food safety, and traceability throughout the supply chain. This
includes addressing concerns about the use of hormones and antibiotics in dairy
farming and maintaining high standards in dairy processing and packaging.
Compliance with global standards like HACCP (Hazard Analysis and Critical
Control Points) and ISO certification can be demanding but is necessary to
enhance the industry's competitiveness and reputation in international markets.
Market Competition and Pricing
The Saudi dairy market is highly competitive, with
both local and international brands vying for consumer attention. Local
companies like Almarai, the largest integrated dairy company in the region,
have established strong market positions, but they face competition from
international giants and smaller local players. This intense competition
affects pricing and market share.
The challenge lies in balancing the need to
maintain affordable prices for consumers with the necessity to ensure
profitable operations for dairy companies. Fluctuations in raw material prices,
such as feed and energy, can impact production costs, making it challenging to
offer competitive prices while maintaining quality standards.
Saudi Arabia's move toward economic diversification
and privatization has led to an influx of investments in the dairy sector,
which can lead to market oversaturation if not managed carefully. Finding the
right pricing strategies and market positioning in this competitive landscape
is a continuous challenge.
Climate Change and Sustainability
Climate change poses a long-term challenge to the
Saudi dairy industry. Rising temperatures, extreme weather events, and shifting
weather patterns can impact dairy production. Heat stress on dairy cattle can
reduce milk production and compromise animal health, requiring additional
resources for climate mitigation.
Sustainability is becoming an increasingly
important concern. The dairy industry's carbon footprint, water consumption,
and waste management practices need to align with global sustainability goals.
Saudi Arabia, like many other countries, is under pressure to reduce its
environmental impact and contribute to a greener future.
Efforts to address this challenge include the
implementation of sustainable farming practices, the use of renewable energy
sources, and reducing greenhouse gas emissions from the dairy sector. However,
transitioning to more sustainable practices may require significant investment
and adaptation.
In conclusion, the Saudi Arabian dairy industry
faces several significant challenges, from water scarcity and feed supply
issues to quality and safety standards, market competition and pricing, and the
long-term effects of climate change. Successfully addressing these challenges
is crucial for the industry's sustainability, competitiveness, and continued
growth. Government support, technological innovation, and industry
collaboration will be essential in overcoming these hurdles and ensuring the
long-term success of the dairy sector in Saudi Arabia.
Key Market Trends
Health and Wellness Products
A prominent trend in the Saudi Arabian dairy
industry is the growing demand for dairy products that are perceived as healthier
and more beneficial for consumers. This trend is driven by an increasing
awareness of the nutritional value of dairy and the desire for products that
address specific health needs.
Consumers are seeking dairy products with reduced
fat, sugar, and calories, as well as those with added functional ingredients
like probiotics and prebiotics for digestive health. Additionally, lactose-free
and plant-based dairy alternatives have gained popularity among those with
dietary restrictions or seeking dairy-free options.
Local dairy companies have responded to this trend
by introducing a variety of low-fat, reduced-sugar, and functional dairy
products, catering to the health-conscious segment of the population. The
emphasis on health and wellness aligns with global dietary trends and is
expected to continue shaping the product offerings in the Saudi dairy market.
Sustainable and Environmentally Friendly Practices
Sustainability is a growing trend in the global
dairy industry, and Saudi Arabia is no exception. The focus on sustainability
extends to various aspects of the dairy supply chain, including farming
practices, energy consumption, waste management, and packaging.
Sustainable farming practices aim to reduce the
environmental footprint of dairy production. This includes improving the
efficiency of water and resource use, reducing greenhouse gas emissions, and
adopting more eco-friendly livestock management practices.
Energy-efficient and environmentally friendly
production facilities are also becoming more common, with dairy companies in
Saudi Arabia increasingly turning to renewable energy sources, such as solar
power, to meet their energy needs.
Sustainable packaging solutions, including reduced
plastic use and improved recyclability, are being explored as a means of
addressing environmental concerns. The Saudi dairy industry recognizes the
importance of sustainability, and as consumer awareness of environmental issues
grows, companies are making efforts to adopt more sustainable practices.
Online Retail and E-commerce
The rise of e-commerce and online retail has had a
significant impact on the distribution and marketing of dairy products in Saudi
Arabia. With the increasing availability of high-speed internet and the
widespread use of smartphones, consumers are increasingly turning to online
platforms to purchase dairy items.
Online retail offers the convenience of home
delivery, allowing consumers to access a wide range of dairy products with
ease. This trend has been accelerated by the COVID-19 pandemic, as people
sought to limit in-person shopping and embraced online grocery shopping.
Dairy companies in Saudi Arabia are adapting to
this trend by expanding their online presence and partnering with e-commerce
platforms to reach a broader customer base. E-commerce offers opportunities for
direct-to-consumer sales and marketing, as well as enhanced consumer engagement
through online promotions, product information, and reviews.
Premium and Artisanal Dairy Products
There is a growing interest in premium and
artisanal dairy products in Saudi Arabia. Consumers are increasingly willing to
pay a premium for high-quality, niche, and specialty dairy items that offer
unique flavors and experiences.
Artisanal and locally produced dairy products, such
as specialty cheeses, traditional desserts, and premium ice creams, have gained
popularity. These products are often perceived as more authentic and of higher
quality, appealing to consumers looking for distinct and unique tastes.
This trend aligns with a broader global movement
towards supporting local and small-scale producers and valuing the
craftsmanship and heritage associated with artisanal dairy items. Local dairy
companies have recognized this trend and are expanding their product portfolios
to include premium and artisanal offerings.
In conclusion, the Saudi Arabian dairy industry is
witnessing several significant trends, including a growing demand for health
and wellness products, increased focus on sustainability and environmentally
friendly practices, the rise of online retail and e-commerce, and a surge in
the popularity of premium and artisanal dairy products. These trends reflect
changing consumer preferences and global industry developments, and they
present opportunities for dairy companies to innovate, diversify their product
lines, and meet the evolving needs of consumers in the Saudi market. Staying
attuned to these trends and embracing them is essential for the continued
success of the dairy sector in Saudi Arabia.
Segmental Insights
Type Insights
Yogurt has emerged as the fastest-growing segment
in the Saudi Arabian dairy industry, driven by shifting consumer preferences
and increasing health consciousness. The surge in demand for yogurt is
attributed to its reputation as a healthy and convenient dairy product.
Consumers in Saudi Arabia are increasingly opting
for yogurt due to its probiotic benefits, which support digestive health.
Furthermore, the availability of a wide range of yogurt flavors, including
traditional Middle Eastern varieties and innovative international options, has
broadened its appeal.
Local dairy companies have responded to this trend
by introducing various yogurt products, often fortified with vitamins and
minerals, to cater to evolving consumer preferences. The yogurt segment's rapid
growth is a reflection of the industry's adaptability and its ability to meet
the dynamic demands of a health-conscious and diverse consumer base. This trend
is expected to continue, with yogurt remaining a pivotal category in the Saudi
dairy market.
Sales Channel Insights
Online retail is experiencing exceptional growth in
the Saudi Arabian dairy industry, reflecting changing consumer habits and
increased digitalization. With the rapid adoption of e-commerce platforms and
mobile applications, purchasing dairy products online has become increasingly
popular among Saudi consumers.
The convenience, accessibility, and wide product
selection offered by online platforms have driven this trend. Consumers can now
browse, compare, and purchase various dairy items with just a few clicks,
facilitating a seamless shopping experience.
Local dairy companies have recognized the
significance of this trend and are actively expanding their online presence,
partnering with e-commerce platforms, and offering home delivery services to
reach a broader audience. This transformation has been further accelerated by
the COVID-19 pandemic, which pushed more consumers to embrace online grocery
shopping.
The online segment's growth is expected to persist,
with technology continuing to shape how consumers access and purchase dairy
products in Saudi Arabia.
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Regional Insights
The eastern region of Saudi Arabia stands out as
the dominating and pivotal region in the Saudi Arabian dairy industry. This
prominence is attributed to various factors, including favorable climate
conditions, a strong agricultural tradition, and extensive infrastructure for
dairy production and distribution.
The Eastern Province, in particular, benefits from
an arable landscape that supports the cultivation of animal feed, making it a
prime location for dairy farming. The region's proximity to key urban centers
and ports facilitates efficient distribution and export logistics.
Furthermore, the presence of large-scale dairy
companies, such as Almarai, which is headquartered in Al Kharj in the Riyadh
region, also contributes to the overall dominance of the eastern region. These
companies have invested heavily in advanced dairy farming, processing
facilities, and research and development, bolstering the region's status as a
dairy industry leader in Saudi Arabia.
Given these advantages, the eastern region is
likely to remain at the forefront of the country's dairy production and
distribution for the foreseeable future.
Recent Developments
- In Sep 2023, Sawani opened Noug's outlets in
Riyadh, specializing in camel dairy products. The new Noug store will sell all
of Noug's goods, including ordinary and flavored fresh camel milk, butter,
cheese, cream, gelato, and many more camel milk-based items.
- In Jul 2023, Saudi Arabia's Public Investment Fund
has launched a new company to assist the expansion of the local camel farming
sector as part of the sovereign wealth fund's objective to increase economic
diversity in the country.
Key Market Players
- Almarai Company
- Al Safi Danone Ltd.
- The National Agricultural Development Company (NADEC)
- Nada Dairy
- Saudia Dairy & Foodstuff Company (SADAFCO)
- Danya Foods Ltd.
- Forsan Foods & Consumer Products Company ltd
- Modern Dairy Plant Company (Badr Dairy)
- Wardat Al Mashreq Food Factory
- Ornua Ingredients International
|
By Type
|
By Sales
Channel
|
By Region
|
- Drinking
Milk
- Cheese
- Yogurt
- Ghee &
Butter
- Others
|
- Supermarkets/Hypermarkets
- Departmental
Stores
- Online
- Others
|
- Western
- Northern
& Central
- Eastern
- Southern
|
Report Scope:
In this report, the Saudi Arabia Dairy market has been segmented into the
following categories, in addition to the industry trends which have also been
detailed below:
- Saudi Arabia Dairy Market, By Type:
o Drinking Milk
o Cheese
o Yogurt
o Ghee & Butter
o Others
- Saudi Arabia Dairy Market, By Sales Channel:
o Supermarkets/Hypermarkets
o Departmental Stores
o Online
o Others
- Saudi Arabia Dairy Market, By Region:
o Western
o Northern & Central
o Eastern
o Southern
Competitive Landscape
Company Profiles: Detailed analysis of the major companies presents in the Saudi
Arabia Dairy market.
Available Customizations:
Saudi Arabia Dairy 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).
Saudi Arabia Dairy Market is an upcoming report to be
released soon. If you wish an early delivery of this report or want to confirm
the date of release, please contact us at [email protected]