Dairy Products In Saudi Arabia Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028)

Dairy Products In Saudi Arabia Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028)

The Saudi Arabia Dairy Products Market size is expected to grow from USD 5.27 billion in 2023 to USD 6.64 billion by 2028, at a CAGR of 4.71% during the forecast period (2023-2028).

Key Highlights

• The Saudi Arabian dairy market is likely to undergo remarkable growth during the forecast period, owing to the flourishing dairy industry and increasing consumption of milk and dairy products in the country. Additionally, rising awareness of the benefits of milk and related products and the growing fitness trend is anticipated to drive the market during the forecast period.
• Furthermore, regulations related to halal beverages and the increasing popularity of packaged dairy products in the region are boosting the growth of the dairy industry in the country. There has been a steady increase in the consumption of dairy products in the country over the past few years. With this increased demand, it's unsurprising that many players are looking to expand their production capacity to capitalize on this trend. For instance, in 2021, Arla Foods, a key player in the dairy industry, invested SAR 64 million (USD 17.04 million) in new production lines in Saudi Arabia to further diversify its product exports across the Middle Eastern region.
• 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 demand for dairy products in Saudi Arabia is primarily driven by the growing population, which is expected to reach 40 million by 2030. As the population continues to grow, the demand for dairy products is expected to increase. Additionally, increasing urbanization and rising disposable incomes are expected to drive the demand for dairy products in the country.
• Furthermore, changing dietary habits are also contributing to the growth of the dairy market in Saudi Arabia. With a growing focus on health and wellness, consumers are increasingly looking for dairy products that offer health benefits. This has led to an increased demand for products such as low-fat and skimmed milk, yogurt, and cheese.
• Additionally, several Saudi Arabian dishes require milk and cheese in their preparation, 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.

Saudi Arabia Dairy Products Market Trends

Augmented Demand for Processed Functional Dairy Products

• The organic and functional food and beverage sector has been growing worldwide, and Saudi Arabia is also experiencing this trend. Dairy products, in particular, are an important part of many people's diets consumers in Saudi Arabia are now prioritizing sustainability and health benefits while not compromising on taste. With the rising demand for functional drinks among health-conscious consumers, the players in the market are focused on innovating dairy products with added nutrients.
• For instance, Saudia Dairy and Foodstuff Company (SADAFCO) introduced a new Saudia milk fortified with 60 percent more calcium to help consumers live a healthy lifestyle and maintain strong bones. Saudia Calcium Milk was officially launched on Oct. 20 to mark World Osteoporosis Day. Around 38 percent of men and 28 percent of women aged above 50 have osteoporosis in Saudi Arabia. With the percentage of the population in the 50-plus segment expected to rise steeply in the coming years, the Ministry of Health encourages people to maintain sufficient calcium levels in their diet.
• Furthermore, the growing availability of low-salt and low-fat cheese, such as white feta and shredded mozzarella, in response to expanding market demand for healthier cheese types, gave chances for processed cheese manufacturers to diversify their products to include low-fat cheese. This low-fat cheese has given customers a sense of guilt-free cheese consumption, consequently driving the country's dairy product sector.
• Moreover, product innovations with respect to functional dairy have also been driving the market studied, as leading market players have frequently been launching new products in the market. For instance, Al Rawabi, offers a range of vitamin-D milk with full cream in various flavors, such as strawberry, mango, and vanilla, and probiotic dairy products in functional and probiotic offerings to capture the specific needs of the consumers in the region.

Increasing Production Of Milk And Milk Products

• The production of milk and milk-based products has witnessed a significant upsurge in Saudi Arabia due to the presence of over 62 dairy farms in the country. In addition, Saudi Arabia is the largest dairy consumer among Gulf Cooperation Council (GCC) countries owing to a large population with substantial per capita spending on dairy products, including cheese and butter.
• With its Vision 2030, Saudi Arabia aims to diversify in other industries apart from oil, which is expected to strengthen the domestic dairy industry further, thereby benefitting the growth of the regional dairy products market in the coming years.
• Manufacturers are developing innovative lactose-free dairy products fortified with functional, low-fat, and sugar-free ingredients to reach a wider consumer base. Other factors, including rising expenditure capacities of the consumers, along with an increasing number of camel breeding farms in Saudi Arabia for specialized milk production, are anticipated to drive the market toward growth.

Saudi Arabia Dairy Products Industry Overview

The dairy market in Saudi Arabia is highly competitive, with a limited number of local players primarily catering to the demand for milk products in the country. Some of the major companies are Almarai Company, Sadafco, National Agriculture Development Company (NADEC), Mondelez International, Arla Foods, Fonterra Co-Operative Group Limited, AlSafi Danone Company (ASD), BEL SA, Nestle 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 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, 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.

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