Saudi Food & Beverages Consumption is Expected to Rise to 5% in 2014


Published Date : Jan 08, 2014

As compared to the 6.0 percent growth in 2013, Saudi Arabia’s food and beverages consumption is predicted to grow 5.0 percent in 2014. This was reported by the Business Monitor International in Saudi Arabia Food & Drink Report Q1 2014.   

According to the report, the retail sector will stay bright over the medium term, as the sales will benefit from the rising incomes, increasing urbanization, and other favorable demographics. 

Statistics show that the year 2014 will reflect a food consumption of 8 percent with a compound annual growth rate (CAGR) of 7.8 percent. This will continue from 2013 to 2017. Simultaneously, the confectionery value sales will increase to 6.9 percent with CAGR to 2017 of 6.7 percent this year, whereas, the mass grocery retail sales growth is projected at 10.3 percent with CAGR of 9.9 percent to 2017. 

The report further emphasizes on Saudi Arabia’s poultry production that is expected to grow for the second successive year in 2013/14 reaching a record high of 660,000 tons, up to 15.8 percent year after year support from the government and investment in production capacity. 

As the county’s largest economy, Saudi Arabia’s soft drinks industry has widely become the Gulf region’s largest industry in terms of volume. It definitely accounts for region’s two-thirds of the soft drinks segment. 

The per capita consumption of soft drinks measured in terms of bottle watered, juices, carbonates, and functional drinks (energy drinks) considerably increased from 217 liters to almost 253 liters from the year 2004 to 2012. When measured in terms of value, the size of the industry expanded from $5.5 billion to $8.5 billion over the same period, with carbonates and bottle water making up an 80 percent of overall sales. 

Indeed, Saudi Arabia’s vast consumer outlook remains an attraction to worldwide grocery retailers, who are aiming at captivating the Middle Eastern growth in this process. 

An increased formalization of the sector is the main aim of the country. This is expected to gain momentum as international and domestic investors aim at spending power of the Saudi consumer. 

According to the BMI report, the country is now auguring heightened costs for the private sector around the medium term, which will lead them to a rise in project delays and a difficult business environment overall.