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HORECA
2011 KSA
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Saudi Food, Beverages

and Hospitality Market
Analysis
Signs of stabilization & recovery
with high levels of investor interest
and activity.
HORECA
2011 KSA
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 Organic foods are progressively increasing.
Consumers Health awareness has notably increased opportunities for companies that are able to
produce healthy & light food.
The size of the population ensures that the market makes a distinction among the gulf region
markets which portend especially well on long-term carry in household expenditure growth. Remarkable Notes in Saudi Drink Industry
While income increases, there will be more spending on fast-moving consumer goods Soft drink consumption per capita is high, mainly for carbonate, bottled water and fruit juice.
(FMCGs), that will boost per capita food consumption & mass grocery retail sales. In addition, Though Saudi consumers are increasingly brand loyal yet they are interested in new and
the increases of income demand for high-value luxury goods as Saudi consumers are very original products.
brand conscious. Saudi consumption for tea and coee is very high as they consider both as part of tradition
and daily lifestyle.
Industry Data Highlight A positive forecast is expecting the soft drinks industry to register promising value and
2010 per capita food consumption = +1.48%; forecast to 2015 = +52.94% volume sales growth.
2010 soft drink value sales = +2.03%; forecast to 2015 = +41.12% Concerning production innovation the alternative teas, such as herbal and fruit tea, are
2010 mass grocery retail sales = +6.77%; forecast to 2015 = +82.7% taking a place in the popularity products in Saudi Arabia, indicating indeed a strong growth
opportunities for original and new products.
Remarkable Notes in Saudi Food Industry
Appealing market for investors due to size of youthful population being over 25 million Coming From A Lower Base
Gulf Region Per Capita GDP (US$) -2004-2005

progressively more attracted to western trends, therefore the long-term volume growth is 140.000

very promising.
United Arab Emirates
Bahrain
120.000 Kuwait

Towering consumption of high-value packaged and processed foods on account of the enor-
Oman
Qatar
100.000 Saudi Arabia

mous expatriate population existence in Saudi Arabia. 80.000

Saudi Arabia is the largest dairy industry. 60.000

Comparing to neighboring countries, Saudi Arabia gives a lower cost export base for the fact 40.000

that the country is a member of the Gulf Co-operation Council (GCC). 20.000

As the Saudi lifestyles becomes busier along with tastes and preferences development, the 0

2004

2005

2006

2007

2008
demand for processed and packaged goods is meant to carry on more increasingly in the Saudi market.

2009f

2010f

2011f

2012f

2013f

2014f

2015f
Source: UNCTAD

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 Table: Food Consumption Indicators 2006- 2015
Detailed Analysis for Food 2006 2007 2008 2009e 2010f 2011f 2012f 2013f 2014f 2015f

Food Data Highlights Food Consumption (US$bn) 23.38 28.30 31.03 36.17 37.67 41.10 44.53 48.09 52.58 57.62
Headline food consumption forecast annual growth to 2015: 8.09% Food Consumption (SARbn) 87.54 106.00 116.21 135.44 141.09 159.94 166.75 180.09 196.90 215.79
Per capita forecast food consumption annual growth to 2015: 5.91%
Per Capita Food Consumption (US$) 987.2 1,171.7 1,259.1 1,142.5 1,449.6 1,550.1 1,646.4 1,744.3 1,871.7 2,0140.0

Keynotes Factors for New Market Per Capita Food Consumption (SAR) 3.697 4.388 4.715 5.350 5.429 5.805 6.166 6.533 7.010 7,542

25% of total private consumption in Saudi Arabia consisting of food expenditure. Total Food Consumption Growth(y-o-y) 7.03 21.9 9.64 16.55 4.17 9.10 8.32 8.00 9.33 9.59
Motivated by the predictable economic and population growth, signicant investment into
Per Capita Food Consumption Growth (y-o-y) 4.50 18.69 7.46 13.45 1.48 6.93 6.21 5.95 7.30 7.60
food processing particularly main segments such as dairy, is anticipated to grow by 2015, in
US$ terms, per capita food consumption to grow past US$2,000. Food Consumption as % GDP 6.55 7.35 6.52 9.78 8.17 8.36 8.33 8.44 8.67

Saudi Arabia is the only market in the gulf region which can pragmatically and realistically e/f = BMI estimate/forecast; na = not available/applicable. Source: Ministry of Economy and Planning, Central Department of Statistics, Saudi Arabian Monetary Agency, Company Information, Trade Press, BMI

presents investors with long-term volume growth potential especially with an expected
growth of population to reach 28 million by 2015.
Food Consumption
The food market is much less contingent on catching the attention of expatriates to uphold 2005-2015

the consumer base, comparing to UAE market where 80% of population is consisted of expa- 8000 20
18
triates, therefore the Saudi market carry less down risks to the population and headline food 7000
6000
16
14
consumption growth gures. 5000
4000
12
10

Permeation of expansion of organized retail channels will also contribute to food consump- 3000
2000
08
06
04
tion growth over the long term. 1000 02
00
0
Increased in organized retailing will carry on to reinforce internal trade systems, which will

2009e
2005

2006

2007

2008

2010f

2011f

2012f

2013f

2014f

2015f
put in to lower expenditure & cost savings that can be passed on to consumers.
Per capita food consumption(SAR)(LHS)
Per capita food consumptiongrowth (y-o-y)(RHS)

e/f =BMI estimate/forecast; na = not available/applicable.source: Minisrty of Economy and planning, Central
Department of Statisties, Saudi Arabian Monetary Agency, Company Information, Trade Press, BMI

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Confectionery Confectionery Sales
2005-2015

40 2.0
35 1.8
Food Data Highlights 30
1.6
14
Confectionery annual value sales growth to 2015: 1.11% 25
20
1..2
1..0
15 0.8
0.6
10 0.4
Notes on Confectionery in Saudi Arabia 5 0.2
0 0.0
The forecast until 2015 will remain being largely driven by premiumisation momentum with a

2009e
2005

2006

2007

2008

2010f

2011f

2012f

2013f

2014f

2015f
strong opportunities to producers able to place products to capture upside provided by
premiumisation. Confectionery Sales (SARmn)(LHS)
Confectionery Sales growth,SAR, (y-o-y)

e/f =BMI estimate/forecast; na = not available/applicable.source: Minisrty of Economy and planning, Central
Department of Statisties, Saudi Arabian Monetary Agency, Company Information, Trade Press, BMI

The growth is expected to be spread across the sugar confectionery, chocolate and gum
segments. Putting in mind that Saudi consumers are somewhat sensitive toward prices. There-
fore, products at the low end of the price range are probable to remain mostly popular. Detailed Analysis for Drink (Soft Drink)

Drink Data Highlights

Table: Confectionery Sales- Historical Data & Forecasts, 2006- 2015
Headline soft drinks value sales forecast annual growth to 2015: 6.28%
2006 2007 2008 2009e 2010f 2011f 2012f 2013f 2014f 2015f
Carbonates value sales forecast annual growth to 2015: 2.04%
Confectionery Sales (SARmn) 33.79 34.38 34.63 34.63 34.76 35.09 35.51 36.00 36.48 37.00
Bottled water value sales forecast annual growth to 2015: 5.77%
Fruit juice value sales forecast annual growth to 2015: 11.08%
Confectionery Sales Growth, SAR (y-o-y) 87.54 106.00 116.21 135.44 141.09 159.94 166.75 180.09 196.90 1.42

Confectionery Sales (US$mn) 987.2 1,171.7 1,259.1 1,142.5 1,449.6 1,550.1 1,646.4 1,744.3 1,871.7 300.5 Keynotes Factors for Drink in Saudi Arabia
e/f = BMI estimate/forecast; na = not available/applicable. Source: Ministry of Economy and Planning, Central Department of Statistics, Saudi Arabian Monetary Agency, Company Information, Trade Press, BMI
The drink industry will carry on a strong growth and will increase over the forecast period to
2015. The growth is out of the following causes:

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 o Alcoholic drinks industry absence. Table: Soft Drink Sales- Historical Data & Forecasts, 2006- 2015

o Harsh climate in Saudi Arabia. 2006 2007 2008 2009e 2010f 2011f 2012f 2013f 2014f 2015f

o Size of population which make up approximately two thirds of the Gulf's population
Carbonated Drink Sales (SARmn) 2.483 2.533 2.583 2.593 2.626 2.672 2.728 2.792 2.859 2.927

Bottled Water Sales (SARmn) 2.895 3.040 3.192 3.243 3.296 3.480 3.714 3.984 4.260 4.535
Saudi Arabia soft drink industry is the largest by volume and value comparing to the region's industry.
The consumers as we mentioned are brand-loyal and are always interested in new and origi- Juice Sales (SARmn) 2.389 2.628 2.891 3.016 3.119 3.494 3.970 4.523 5.523 5.647

nal products, which is a very essential factor in the drink industry. Laban Sales (SARmn) 1.013 1.023 1.033 1.036 1.042 1.053 1.066 1.081 1.096 1.112
The avored, bottled water with an emphasis on the size of bottles, are taking a great place
Energy Drink Sales (SARmn) 271.4 294.0 318.4 324.4 336.5 358.3 386.1 418.4 451.2 483.8
in the industry due to the lack of adequate drinkable water thus, it will carry on strong
growth over the forecast period. Soft Drink Sales (SARmn) 9.051 9.517 10.017 10.213 10.420 11.057 11.863 12.798 13.751 14.705

O-trade sales of soft drink through retail channels account for 80% of total volume sales, Total Soft Drink Sales Growth, SAR, (y-o-y) 5.04 5.15 5.25 1.95 2.03 6.11 7.29 7.88 7.45 6.93
with supermarket and hypermarkets accounting for approximately 36% of soft drink sales,
Carbonated Drink Sales (US$mn) 663.0 676.3 689.8 692.5 701.2 713.4 728.3 745.5 763.3 781.5
while independent food stores accounted for around 22%.
Bottled Water Sales (US$mn) 773 812 852 866 880 929 992 1.064 1.137 1.211

Soft Drink Sales Juice Sales (US$mn) 638 702 772 805 833 933 1.060 1.208 1.358 1.508
2005-2015

Laban Sales (US$mn) 270.4 273.1 275.8 276.7 278.3 281.0 284.6 288.7 292.8 296.8
6000
5000
Energy Drink Sales (US$mn) 72.5 78.5 85.0 86.6 89.9 95.7 103.1 111.7 120.5 129.2
4000
3000
Soft Drinks Sales (US$mn) 2.417 2.541 2.675 2.727 2.782 2.952 3.168 3.417 3.672 3.927
2000
1000
Per Capita Soft Drink Spend (US$) 102.1 105.2 108.5 107.7 107.1 111.3 117.1 124.0 130.7 137.2
0
2009e
2005

2006

2007

2008

2010f

2011f

2012f

2013f

2014f

2015f

e/f = BMI estimate/forecast; na = not available/applicable. Source: Ministry of Economy and Planning, Central Department of Statistics, Saudi Arabian Monetary Agency, Company Information, Trade Press, BMI

Carbonated drink sales (SARmn)

Bottled water sales (SARmn)
Juice sales (SARmn)
e/f =BMI estimate/forecast; na = not available/applicable.source: Minisrty of Economy and planning, Central
Department of Statisties, Saudi Arabian Monetary Agency, Company Information, Trade Press, BMI

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Detailed Analysis for Drink (Hot Drink)

Drink Data Highlights

Coee value sales forecast annual growth to 2015: 4.53%
Tea value sales forecast annual growth to 2015:2.43%

Keynotes Factors for Drink in Saudi Arabia

Coee Sales are anticipated to surpass tea sales in term of annual growth to 2015.
Constant on-trade strength, emphasized by the expanding prominence of western
styled coffee shops.
Growth in tea is anticipated to be mostly determined by product growth and the wider permea-
tion of fruit teas playing an progressively more key role in motivating growth.

Tea And Coee Sales

2005-2015

1200
1000
800
600
400
200
0
2009e
2005

2006

2007

2008

2010f

2011f

2012f

2013f

2014f

2015f

Coee sales (SARmn) Tea sales (SARmn)

e/f =BMI estimate/forecast; na = not available/applicable.source: Minisrty of Economy and planning, Central
Department of Statisties, Saudi Arabian Monetary Agency, Company Information, Trade Press, BMI

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