Saudi Arabia Foodservice Disposable Packaging Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

Saudi Arabia Foodservice Disposable Packaging Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

The Saudi Arabian foodservice disposable packaging market is expected to register a CAGR of 4.3% during the forecast period. The foodservice disposable sector has seen significant growth in the country and is anticipated to grow due to increased consumption of ready-to-eat foods. Consumers' busy lifestyles are driving a trend toward takeout and catering services.

• With the growth of tourism and education, Saudi Arabia has seen a general shift in socio-cultural practices. Rapid economic recovery, increasing westernization, the presence of large grocery stores, and the growth of a culture of eating together have all contributed to the prosperity of this market.
• The food service disposables market is anticipated to witness growth over the forecast period because of the increasing online delivery services by restaurants, such as QSR (quick service restaurants), retail outlets, and coffee shops. As a result, small companies are constantly focused on growing their food market business by increasing the number of grocery stores across the country.
• In addition to population, increasing disposable income and the burgeoning tourism industry are driving the growth of the food service industry in the country, thereby impacting the market's development positively. According to World Travel and Tourism Council forecast, the tourism sector in Saudi Arabia is to grow at an average of 11% annually over the next few years, making it the fastest-growing Travel & Tourism sector in the Middle East. The Kingdom expects the entire sector's contribution to reach SAR 635 billion (USD 168.93 billion) in 2032, approximately 17.1% of the total economic GDP.
• Food packaging is becoming a growing concern owing to the large amount of waste generated and the chemicals it contains that are detrimental to health. Plastic packaging includes many plastic types, from styrofoam to clear plastic packages to the lids on takeout coffee cups. The raw materials used in plastic packaging might harm health. Toxic chemicals are often added to the plastic to make it more functional.​
• The food service sector witnessed disposable packaging as a safer alternative to reusable packaging products during the COVID-19 outbreak. Businesses in the industry opted for disposables to contain the spread of COVID-19. Additionally, online grocery delivery platforms helped to grow the market during the COVID-19 pandemic. Furthermore, the Russia-United Kingdomraine war has impacted the overall packaging ecosystem.

• Convenient packaging is one of the main drivers of the studied market. Busy lifestyles have left working individuals with less time to prepare healthy meals. Pre-cooked meals are ready in minutes, making preparation more convenient. Pre-cooked food industries are also doing their part to encourage consumption.
• The rise of online delivery platforms and mobile applications supports the growth of throwaway products, especially containers and dinnerware. An increasing number of diners in the region are tapping into smartphone applications to order meal deliveries. This trend is anticipated to accelerate as technology redefines the food sector and attracts investment.
• Saudis are increasingly shifting to convenient, ready-to-eat, accessible, and timely meals. The ready-to-eat food market is anticipated to flourish over the next few years. The increasing rate on the supply side is also driving growth as more malls and supermarkets offer ready-to-eat meals on their shelves, backed by a mature distribution and infrastructure network.
• Companies operating in the country are focused on innovating new solutions through collaborations. For instance, in February 2022, Arla Foods Saudi Arabia announced producing and filling its food portfolio in aseptic carton packs on-site with SIG’s food-filling technology. Unbreakable and lightweight, aseptic paper packs offer many benefits, such as preserving the high quality, taste, aroma, all-natural nutrients, vitamins, flavors, and colors of liquid foods. Such initiatives by the companies drive the growth of the disposable packaging market.
• Increasing expats in the country and packaged food or ready-to-eat substitutes for a 3-course meal has given rise to more inclination towards packaging. In recent years, government and private packaging firms have been switching to paper-based bio-degradable solutions, increasing the demand for paper and paperboard disposable packaging solutions.​

• According to a survey conducted by Oracle in 2022, demand for processed foods, vegetables, and fruits is vital in the food sector. Ready-to-eat foods most often employ cartons as a secondary form of packaging. In the context of the end-consumer, quick service restaurants (QSR) offer cost-effective dining options with a focus on speed of service. Minimal table service and an emphasis on self-service set the group apart from traditional restaurants. It is expected to hold a significant market share.
• The country has many full-service restaurants s offering premium food and delivery services. Such restaurants are generally located in luxury hotels in metropolitan cities. Full-service restaurants have started offering takeaway options, and takeaway deliveries are driving the consumption of disposable in full-service restaurants in the country.
• Furthermore, QSRs are partnering and investing in different food chains. Such collaborations may increase the demand for disposable packaging. For instance, in April 2021, the Popeyes fast-food restaurant chain partnered with Gulf First Fast-Food Company to organize and promote the Popeyes brand in Saudi Arabia.
• Moreover, the market for online grocery delivery services is growing with increasing demand for convenient service options. As work life becomes increasingly hectic and GenZ doesn't want to spend their hard-earned money and time going to restaurants, online services comfort their busy lifestyles. Increased disposable products and high internet penetration are also boosting the market growth. If the online food ordering and delivery market in Saudi Arabia overcomes high operating costs, the market will witness stronger-than-expected growth in the forecast year.
• As the country's diverse culinary landscape becomes more environment-friendly, restaurants are adopting a wide range of sustainability initiatives. They are using new solutions to eliminate food waste, reduce their carbon footprint, source ingredients sustainably, and use sustainable packaging and catering products. Such initiatives will drive sustainable disposable packaging solutions in the country.

The Saudi Arabian foodservice disposable packaging market is moderately consolidated with key players, such as Napco National Packaging, Tetra Pak Arabia, Gulf Packaging Industries, Falcon Pack, Flex Pack, and more. The players in the market are focusing on innovations and mergers & acquisitions to enhance their brand presence across the region.

In October 2022, Napco National Packaging showcased its comprehensive portfolio of agricultural films and packaging solutions as part of its business expansion at the Saudi Agriculture 2022 at the Riyadh International Convention & Exhibition Center. With sustainability as its core operations and processes, the company is to unveil its Sustainable Packaging Solutions for Food Security in line with the Saudi Vision 2030.

In February 2022, Tetra Pak invested over EUR 11.5 million (USD 12.09 million) with recyclers and industry players to set up four completely new recycling solutions for carton packages in Saudi Arabia, Australia, and other countries. From building recycling capacity from scratch via cross-border cooperation in Saudi Arabia to leveraging a public/private partnership in Australia, these projects share one critical trait.

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