KSA Cheese Market Outlook to 2030

KSA Cheese Market Overview

• The KSA cheese market is valued at USD 350 million, showing robust growth due to increasing consumer demand for dairy products, particularly cheese. The market is driven by several factors, including rising disposable incomes, urbanization, and a growing inclination toward westernized diets. Cheese, particularly processed cheese, has gained immense popularity due to its usage in fast foods, which has become a staple for a large portion of the population. Additionally, government initiatives to enhance domestic dairy production and reduce reliance on imports have boosted local production capacities, further propelling market growth.

• Dominant regions in the KSA cheese market include Riyadh, Jeddah, and Dammam, primarily because these cities host a large portion of the countrys urban population, which is more exposed to western eating habits. These metropolitan areas have experienced significant growth in the foodservice industry, with a high number of fast-food chains and restaurants that use cheese extensively. Additionally, the growing retail sector in these cities, with the expansion of hypermarkets and supermarkets, plays a crucial role in supporting the demand for cheese.
• The Saudi Food and Drug Authority (SFDA) has implemented stringent regulations to ensure the safety and quality of cheese products. These regulations include strict guidelines on labeling, hygiene, and storage conditions for both imported and domestically produced cheeses. In 2023, the SFDA introduced new labeling requirements for cheese products, mandating that all ingredients and nutritional information be clearly displayed.

KSA Cheese Market Segmentation

• By Cheese: The market is segmented by cheese type into processed cheese and natural cheese. Processed cheese holds a dominant market share due to its affordability, longer shelf life, and versatility, especially in the fast-food sector. In Saudi Arabia, processed cheese is used extensively in the foodservice industry for burgers, sandwiches, and other popular dishes. Its ability to melt easily and maintain consistency has made it a preferred choice for both consumers and businesses. Additionally, large local manufacturers such as Almarai and Nadec have introduced affordable processed cheese products, further driving this segment's dominance.

• By Distribution Channel: The distribution channel for the KSA cheese market is divided into supermarkets & hypermarkets, convenience stores, and online platforms. Supermarkets & hypermarkets dominate the market due to their wide product selection and accessibility to a broad range of consumers. Chains such as Carrefour, Danube, and Panda are major retailers of cheese products, providing a variety of both local and international cheese brands. Consumers in Saudi Arabia prefer to shop in large retail stores where they can find different cheese products at competitive prices, contributing to the prominence of this distribution channel.

KSA Cheese Market Competitive Landscape

The KSA cheese market is highly competitive, with a mix of both domestic and international brands. Major international companies such as Kraft Heinz, Arla Foods, and Lactalis dominate the market, offering a wide range of cheese products catering to different consumer preferences. These companies leverage their global brand presence and invest in aggressive marketing strategies to maintain their stronghold in the market. Local companies like Almarai and Nadec are also prominent players, producing cheese products tailored to local tastes. These companies benefit from established distribution networks and strong consumer trust, offering competitive pricing and a variety of products from processed to natural cheese.

KSA Cheese Industry Analysis

Growth Drivers:

• Shift to Western Diets: The rise in Western dietary habits has significantly impacted cheese consumption in Saudi Arabia. With a growing preference for fast food and westernized meal options, cheese has become an integral part of everyday meals. The per capita consumption of dairy products, including cheese, is now estimated to be around 48 kilograms annually, reflecting a 7% increase over the past decade. Additionally, increasing urbanization and exposure to Western media have fueled this shift in eating habits. According to the General Authority for Statistics (GASTAT), around 84% of the population now lives in urban areas.
• Rising Urban Population: Saudi Arabias urban population reached 31.7 million in 2024, up from 30.36 million in 2022, according to the World Bank. This urban growth has triggered an increase in demand for convenient and processed foods, including cheese products, as city dwellers tend to adopt fast-paced lifestyles. Urban consumers are also more exposed to global culinary trends, leading to greater consumption of cheese in restaurants and at home. Urbanization is closely linked to increased disposable incomes, which reached USD 23,000 per capita in 2023, providing further impetus for cheese consumption growth.
• Expansion in Local Dairy Production: Saudi Arabia has been expanding its domestic dairy production capabilities to meet the rising demand for cheese and other dairy products. By 2024, local production of dairy goods is expected to reach 3 million liters per day. Major dairy players, like Almarai, have boosted production capacities, supported by government initiatives. The Ministry of Environment, Water and Agriculture has invested significantly in dairy farms to enhance food security. In 2023, the Kingdom produced over 2.6 million liters of milk per day, highlighting the significant capacity for cheese production growth.

Market Challenges:

• Import Dependence for Specialty Cheeses: Despite growth in local production, Saudi Arabia remains heavily reliant on imports for specialty cheese varieties such as Parmesan, Gorgonzola, and Brie. A significant portion of these specialty cheeses comes from Europe and the United States. This reliance on imports creates vulnerabilities in terms of price volatility and potential supply chain disruptions. The Kingdom's dependency on imports for a substantial share of its cheese requirements poses a challenge, especially in light of rising transportation costs and the complexities of global trade.
• Competition from Global Brands: Global cheese brands continue to dominate the Saudi market, maintaining a strong presence and competing with local producers by leveraging their extensive international supply chains. This competition is particularly challenging for local manufacturers in the premium cheese segment, where imported brands are often preferred by consumers due to their perceived superior quality. Trade agreements between Saudi Arabia and the European Union have facilitated the entry of these global brands, further intensifying the competitive landscape for domestic producers.

KSA Cheese Market Future Outlook

The KSA cheese market is poised for continued growth, driven by expanding consumer demand, urbanization, and government initiatives to boost domestic dairy production. As consumer preferences evolve, particularly towards natural and specialty cheeses, the market is expected to diversify further, creating opportunities for both local and international players.

Future Market Opportunities:

• Increasing Preference for Natural Cheese: There is a growing consumer preference for natural cheese, free from additives and preservatives. In 2023, sales of natural cheese varieties grew substantially driven by an increasing awareness of health benefits associated with less processed food. According to GASTAT, majority of cheese consumers now actively seek out natural, organic, or minimally processed cheese products. This trend aligns with the global movement toward clean eating, where consumers prefer products with simple, recognizable ingredients, providing a lucrative opportunity for producers focusing on natural cheese.
• Demand for Organic and Low-Fat Cheese: Demand for organic and low-fat cheese options has surged as health-conscious consumers seek products aligned with their dietary needs. According to the Saudi Food and Drug Authority (SFDA), sales of organic cheese rose increased remarkably in 2023, reflecting a shift towards healthier alternatives. Additionally, the increasing rate of non-communicable diseases such as diabetes and cardiovascular conditions has prompted consumers to opt for low-fat cheese varieties. This trend offers potential for market expansion, as producers introduce more health-centric cheese products in response to rising consumer demand.