Saudi Arabia Dairy Products Market Size Analysis Report - Market Share, Forecast Trends and Outlook (2024-2032)

Saudi Arabia dairy Products Market Growth

The Saudi Arabia dairy market includes milk, cheese, yoghurt, and butter among others which are part of the local diet. The demand growth of Saudi Arabia dairy products market is expected to increase due to increasing population levels, urbanisation, and preference toward healthy food habits. Saudi Arabia has also been investing much into increasing domestic production of dairy products. Additionally, major players such as Nestle, Almarai Company, Al Othman Holding Co., and Saudia Dairy & Foodstuff Co. are expanding their facilities and are integrating modern technology to be more efficient and produce better quality products.

Saudi Arabia dairy products market demand is largely positively influenced by the expansion of health-conscious products, including lower-fat, fortified, and organic dairy. This also addresses the global trend since consumers these days are opting for products that provide wellness and fitness, making the value of the markets higher. Also, innovation of flavored and lactose-free dairy is increasing, hence, offering a platform for different consumer choices and growing the markets.

Saudi Arabia dairy Products Market Analysis

The Saudi Arabia dairy products market demand and trends are also influenced by various socio-economic and cultural factors.  Substantial investments in agriculture, specifically in dairy farming, have made it one of the largest dairy producers in the Gulf region. Enhanced efficiency and quality in production are being achieved through modern technologies being adopted in dairy farming, such as automated milking and cooling systems.

There is also an increasing demand for dairy-based snacks and convenience foods in Saudi Arabia. There is growth in functional dairy products that provide added health benefits, such as probiotic yogurts and fortified milk with vitamins and minerals.

Government initiatives to increase the level of food security have been an important factor in increasing the Saudi Arabia dairy products market demand. Subsidies extended to dairy farmers, investment into infrastructure, and general infrastructure developments conducive to local production of dairy further spurred in making Saudi Arabia self-sufficient in fresh dairy products. Moreover, the Vision 2030 initiative urges this drive for self-sufficiency through its campaign on the diversification of the Saudi economy and the growth of strong local industries, such as dairy.

Growth in the demand for dairy products in Saudi Arabia driven by growing demand from consumers for healthier, convenient, and a wider range of dairy products. Nevertheless, a very high production cost and dependence on imports are some of the significant challenges; however, product innovation, sustainability, and e-commerce are likely to drive the market. A positive outlook is considered pertaining to the market since it experiences investments from domestic as well as international players in raising their presence in the region.

Saudi Arabia dairy Products Industry Outlook

The Saudi dairy industry is likely to exhibit promising growth in the coming years. This is likely due to various factors such as there is an increased demand for dairy products, the constant innovation process, and a momentum in technological advancement. According to the Agricultural Statistics Publication, Saudi Arabia achieved self-sufficiency by 121% in fresh dairy products during 2021. Furthermore, based on 2023 data, Milk production in Saudi Arabia has surpassed 7 million liters per day, equating to over 18 million bottles daily. More than 10,000 trucks are involved in the daily transport and distribution of dairy products, with 38,000 retail stores receiving deliveries each day.

Another direction shaping the Saudi Arabia dairy products market demand is increasing concern about sustainability. Companies are looking at ways in which they can adopt environmentally friendly techniques in their production process, such as water conservation, energy-saving, and minimizing waste.

Furthermore, the market is growing due to the rising population in the Kingdom of Saudi Arabia, with younger generations interested in a variety of products and nutritional values as well as healthy lifestyles. Additionally, the expansion of retail networks and supermarkets, hypermarkets, and other online sites within the Kingdom enhances have eased the supply of dairy products in marketplace, tthereby, enhancing demand for a wide array of dairy products, such as international brands and specialty items. Manufacturers are now targeting this diversity as a stimulus to introduce new flavors and product variations to suit different tastes.

Generally, Saudi consumers are growing in health and nutrition awareness and demand low-fat, lactose-free, and organic dairy products. Further growth drivers for the increasing growth in the demand for the Saudi Arabia dairy products market include increased convenience food demand for more people moving into city centers and busy lifestyles, which, among other things, include ready-to-eat dairy products. As the popularity of demanding convenient foods increases in the increasing numbers of busy lifestyles, manufacturers have introduced and encouraged products such as single-serving yogurts and cheese snacks.

With innovative dairy farming techniques and better supply chain management, local manufacturers were able to increase the quality of their products while being more efficient in production, thus able to meet ever-growing demand on the local level.

While the manufacturers have enormous scope for expanding lines of products, organic, lactose-free, and probiotic fall in the premium range, targeting the health-conscious consumer segment. There is scope for more investment through distribution and further expansion of the channel through a higher emphasis on online sales since consumers in remote areas may not be able to access stores easily.

In parallel, the growing focus towards sustainability will present Saudi dairy companies with more opportunities to move towards "green" production and packaging, in keeping with an environmentally conscious consumer.

Increasing demand and production of milk is boosting the Saudi Arabia dairy products market demand growth.

• Strong government initiatives aimed at enhancing food security have boosted dairy market growth.
• Saudi dairy products are known for meeting high hygiene and quality standards, attracting consumer confidence.

Despite local production, Saudi Arabia still imports significant dairy inputs, leading to vulnerability in supply chains.

• Harsh climate conditions require expensive technology and infrastructure for dairy farming, driving up production costs.
• The market is dominated by basic dairy products, with limited innovation in niche or specialty dairy categories.

Rising disposable income and shifting dietary preferences are driving demand for diverse dairy products, including flavored and functional dairy.

• Saudi Arabia has the potential to export dairy products to neighbouring countries due to its advanced production capabilities.
• There is room for the introduction of more value-added dairy products, such as organic or lactose-free options. These factors are creating new opportunities for the Saudi Arabia dairy products market.

Dairy farming is water-intensive, and Saudi Arabia's water scarcity could impact future production sustainability.

• Imports from countries with lower production costs could challenge domestic producers.
• Changes in oil prices or regional instability could affect consumer purchasing power and investment in the dairy sector.

Saudi Arabia dairy Products Industry Segmentation

“Saudi Arabia Dairy Product Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:

Market Breakup by Type

• Milk
• Cheese
• Yoghurt
• Butter
• Others

Market Breakup by Grade

• Supermarkets/Hypermarkets
• Convenience Stores
• Speciality Stores
• Online
• Others

Saudi Arabia Dairy Products Market Share

Milk occupies a significant portion of Saudi Arabia dairy products industry revenue owing to its high consumption in the country. Its nutritional contents such as calcium, protein, vitamins, and minerals, among others, provide multiple health benefits to consumers. It is also a primary raw material used in the production of different food products such as butter, cheese, ice cream, milkshakes, desserts, and puddings. Additionally, the growing production of novel products such as fat-free, flavoured, organic and lactose-free milk contributes to the market growth.

Competitive Landscape

Nestlé SA is a multinational food and drinks corporation, founded in 1866 and headquartered in Vevey, Switzerland. Its product portfolio includes dairy products, chilled and frozen food, cereal, and plant-based food among others.

Arla Foods Amba, established in 2000, is a dairy products company with its headquarters in Viby, Denmark. Some of its popular products include milk, milk powder, yoghurt, cheese, and butter, among others.

Danone SA, incorporated in 1919 and based in Hoofddorp, the Netherlands, is a multinational food company. The company provides bottled water, dairy products, dairy specialities, and plant-based nutritional products, among others.

Leading Companies in the Saudi Arabia dairy Products Market

Some of the leading companies in the Saudi Arabia dairy products market are -

• Nestlé SA  
• Arla Foods Amba  
• Danone SA
• Lactalis International  
• Almarai Company  
• Al Othman Holding Co.  
• Saudia Dairy & Foodstuff Co.  
• National Agricultural Development Company (NADEC)  
• United National Dairy Co.  
• Mondelez Global LLC  
• Others