JEDDAH, 1 May 2005 — With Saudi Arabia’s import of food and foodstuffs estimated to exceed $7 billion annually, it remains the most important and leading market for exporters in the region and worldwide.
By virtue of its status as the richest country both in oil wealth and precious mineral resources, the Kingdom is recognized as the single largest market for food and beverages, as well as for equipment related to bakeries, restaurants and hotels. “And the market continues to expand on a massive scale,” Jeddah Chamber of Commerce & Industry’s Secretary General Mohamed A. Al-Shareef said.
The continuous repatriation of funds from abroad, especially over the past three years, has caused a massive investment in the food sector and its related industries.
Additionally, a high population growth rate is driving demand in all areas of food and beverage imports, from packaged foods to health foods, hot drinks to soft drinks, and especially convenience foods and confectionery.
Its fast-food culture is spreading rapidly. As a direct consequence to this and the expanding scope of food business, the Kingdom’s food processing and packaging industry, described as the country’s third largest manufacturing sector, is seeing significant investment and growth.
The Kingdom’s wealth is reflected in the higher disposable income and this has led to a growing demand for eating out and convenience foods, compelling sales of catering and hotel equipment, as well as every aspect of interiors for all types of hotels, restaurants and fast-food establishments.
In fact, going by its burgeoning population and expanding scope of the food sector, the Kingdom is rapidly developing its own food processing industry. As a result, there is not only an ever-increasing demand for imported fresh and prepared food and beverages, but also a rapidly growing market for ingredients for the domestic processing and bottling sector, according to the spokesman for Al-Harithy Company for Exhibitions, which is organizing a five-day show on food, hotel and propac here from today.
A growing number of large supermarkets, heightened consumer awareness, more disposable income and exposure to different types of food have increased the demand for canned, packaged, frozen or processed food items. Strong demand however remains for fresh produce, dairy products, dried food, especially rice, and bakery products, all of which are stale commodities of the Saudi consumer. The Kingdom’s soft drinks market is both diverse and competitive in the three sectors of carbonated, fruit/vegetable and bottled water. In 2003, sales in this sector exceeded $2 billion with sales for home consumption accounting for about 80 percent of total volume.
Coffee and tea continue to be the most popular traditional hot drinks across the Kingdom. The mushrooming of cafeterias and coffee shops in all cities and towns gives additional evidence to this fact. Other hot drinks like chocolate and malt-based drinks are most popular with the expatriate community. Sales of hot drinks amounted to $360 million in 2003, and are expected to increase to over $470 million by 2008.
The Kingdom’s food-service sector has been enjoying excellent growth, as the popularity of eating out has grown with higher employment, longer working hours and increased disposable income. As part of its wide-ranging program of economic reform and diversification, the Kingdom is in the process of developing domestic tourism, a sector that is expected to generate $22 billion by 2024, providing additional stimulus to an already buoyant hotel and hospitality sector. Many new hotels, shopping centers, leisure parks, restaurants and fast-food outlets are springing up or are being planned as part of the growth in domestic tourism, changing demographics and lifestyle, and millions of pilgrims who come for Haj and Umrah.
