KSA Food Market Outlook to 2030

KSA Food Market Overview

• The KSA food market was valued at USD 60 billion, reflecting its significant growth over the past five years. The market's expansion is primarily driven by increased urbanization, rising disposable incomes, and shifting dietary preferences among Saudi consumers. The government's Vision 2030, which emphasizes food security and self-sufficiency, has also played a critical role in fostering market growth. As more international food brands and chains enter the Saudi market, competition has intensified, particularly in categories like processed foods and beverages.
• Riyadh and Jeddah dominate the market due to their large populations, urban infrastructure, and status as key commercial hubs. Riyadh, being the capital and economic center, attracts substantial investment in food services and retail. Jeddah, with its historical role as a gateway for trade, has also become a market for international food brands.
• The Saudi governments Vision 2030 plan emphasizes food security as a critical priority. In 2024, the government committed to enhance local food production through investments in modern agriculture technologies like hydroponics, aquaponics, and vertical farming. These programs aim to reduce the countrys reliance on imports and increase domestic production of essential food items like dairy, poultry, and vegetables.

KSA Food Market Segmentation

• By Product Type: The market is segmented by product type into fresh produce, processed foods, dairy products, meat and poultry, and beverages (non-alcoholic). Processed foods currently hold a dominant market share, driven by their convenience and longer shelf life, making them popular among busy urban consumers. Major players like Almarai and Savola have established a robust presence in this segment, leveraging strong distribution networks and brand recognition.

• By Distribution Channel: The market is also segmented by distribution channels into hypermarkets & supermarkets, online retail, specialty stores, convenience stores, and foodservice. Hypermarkets and supermarkets dominate the distribution landscape due to their extensive footprint, offering consumers a wide variety of food products under one roof. Chains like Panda and Carrefour have been expanding aggressively, ensuring they capture the largest share of foot traffic in major urban centers.

KSA Food Market Competitive Landscape

The market is led by several key players, both local and international, who have established a strong presence due to their investment in product innovation and extensive distribution networks. Almarai, for instance, leads in dairy and beverage products, while Savola Group dominates the edible oils and processed foods category.

KSA Food Market Analysis

Market Growth Drivers

• Increased Demand for Imported Food Products: As of 2024, Saudi Arabia remains heavily reliant on imported food to meet its domestic demand. In 2022, the Kingdom imported over 20 million metric tons of food products due to the scarcity of arable land and water resources. The demand for high-quality international food products is rising, particularly in urban areas such as Riyadh and Jeddah. Growing expatriate populations, are also fueling the demand for international food brands and specialized products like halal meat, contributing to the growth of the food import market.
• Government Investment in Agriculture and Food Security: The Saudi government is investing heavily in domestic agriculture through Vision 2030 initiatives, aiming to reduce food import dependency. By 2024, SAR 90 billion has been allocated to develop advanced agricultural technologies and increase local food production, particularly in water-efficient crops. The government is also encouraging private investment in agriculture through public-private partnerships (PPPs), aiming to ensure food security for the growing population.
• Rising Tourism and Foodservice Industry: The influx of international tourists, driven by the Kingdoms efforts to diversify its economy beyond oil, is another growth driver. In 2024, Saudi Arabia is expected to attract over 25 million international visitors, many of whom are participating in religious pilgrimages or attending international events. This rise in tourism is fueling the demand for food services, ranging from quick-service restaurants to luxury dining experiences.

Market Challenges

• Limited Water Resources: Saudi Arabia is one of the most water-scarce nations in the world, with per capita renewable water resources falling below 100 cubic meters annually. This scarcity is a challenge for the agriculture sector, which heavily relies on imported water-intensive crops like wheat. Despite government efforts to promote efficient water use, local food production faces ongoing challenges due to limited freshwater supplies and the high cost of desalination processes.
• High Dependence on Food Imports: Saudi Arabia imports approximately 80% of its food, which exposes the country to fluctuations in global food prices and supply chain disruptions. As of 2024, the Kingdom imported over 20 million metric tons of food. Global food supply shocks, such as those caused by geopolitical tensions or natural disasters, significantly affect domestic food prices and availability. This dependency on imports presents a vulnerability to the Saudi food market, as any disruption in international trade could impact food security and the cost of living.

KSA Food Market Future Outlook

The KSA food industry is expected to continue its upward trajectory over the next five years, driven by growing consumer demand for convenience foods, premium products, and health-conscious alternatives. With the Vision 2030 initiative's focus on food security and local food production, the market is likely to see more investments in domestic agriculture and food processing industries.

Future Market Opportunities

• Expansion of Vertical Farming: Over the next five years, vertical farming is expected to expand significantly across urban areas in Saudi Arabia, particularly in smart cities like NEOM. By 2029, vertical farms will contribute to producing a substantial portion of the country's vegetable supply. This farming technique is projected to reduce the Kingdoms dependency on imported produce while minimizing water use, aligning with the countrys environmental goals under Vision 2030.
• Growth of Plant-Based Food Products: The market for plant-based food products is expected to grow rapidly in Saudi Arabia in the coming years. By 2028, it is estimated that the Kingdom will witness a sharp increase in demand for plant-based dairy and meat alternatives, driven by rising consumer awareness of health and sustainability issues. Local food manufacturers are likely to expand their product lines to include plant-based options, leveraging advancements in food technology to cater to this growing demand.