Chocolate
Market Volume and Size
Chocolate is one of the foods the consumption of which is growing by leaps and bounds across the world. As per the data published by International Cocoa Organization (ICCO), the annual production of cocoa beans were 3,931 thousand tons against an estimated demand of 4,091 thousand tons in 2013, which is an increase of 11% from 2012 (KPMG). The majority of this growth is fueled by the Middle Eastern countries, such as the UAE and Saudi Arabia and South East Asian countries, such as China and India.
Currently, the chocolate market size in Saudi Arabia is estimated to be of $1.2 billion. Chocolate makes up 55% of the total confectionary market in Saudi Arabia (KPMG). The total market size was $596 million in 2011, but within last four years the market has more than doubled. Mars, an American chocolate company, holds the largest market share in Saudi Arabia. It has 45% market share in the country (Nieburg).
Demand Growth
The chocolate market is predicted to grow at a rate of 43% by the end of 2016. Switzerland leads the market in terms of per capita consumption of chocolate with 12 kgs. The annual chocolate spend per person in Saudi Arabia is $41, which is substantially higher than the average outlay on the same in the Middle-Eastern countries ($4) (Al Arabiya). The demand and consumption of chocolate are predicted to grow at a rate of 31.5% in Saudi Arabia for the next three years (Al Arabiya). The total demand for chocolates in Saudi Arabia is estimated to be close to 1,230 tons in 2014.
Local Production and Number of Factories
Even 15 years back Saudi Arabia had no big chocolate factory within the kingdom. Currently, apart from small size chocolatiers, there are about 20 medium and large size chocolate factories in Saudi Arabia. These factories produce approximately 30 tons of chocolates per year with Mars being the largest in-house producer (Saudi Gazette). Mars produces mainly Galaxy brand and imports other brands (Saudi Gazette). Mars is planning to invest $140 million in the next 3 years to build new manufacturing facilities (Nieburg).
Demand Supply Gap
The total demand of chocolate in Saudi Arabia is 1,230 tons and only 30 tons of chocolates are produced within the country (Saudi Gazette). Therefore, there is a huge supply and demand gap of about 1,200 tons, and this gap is fulfilled by importing chocolates.
Import
In 2013, Saudi Arabia imported 62,480 tons of sweetened cocoa, chocolate and other products made of chocolates. Saudi Arabia is one of the largest importers of chocolate (Al Arabiya). In 2014, Saudi Arabia imported 1,167 tons of chocolate from outside the country. 250 tons of the total import was Swiss chocolates (Saudi Gazette). The total value of imported chocolate is estimated to be $950 million in 2014.
Export
Saudi Arabia does not export any chocolate product to other countries as demand far exceeds supply.
Jam
Market Volume and Size
Jam itself does not constitute a market segment. Jam, jelly and preserves constitute the total market segment of jam. Saudi Arabia is the second largest producers of date in the world (Aono). Naturally, date preserves and jellies are the most common in the market. However, many other forms of fruit jams and jellies are also available.
Almarai, headquartered in Riyadh, Saudi Arabia, is the market leader in the jam market, owning almost 15% market share (Miah). Al Yaan and Baja are some of the other leading brands. A good many international jam brands are also available in Saudi Market.
Market Growth
The overall market size of jam is estimated to be worth $365 million in 2011 and the market is expected to grow at a rate of 8% year on year (YOY) in the coming years (IMB). Saudi market is witnessing substantial growth in the fruit jam segment, especially in the non-date segment. Fruit jams and preserves of mango, strawberry, pear, grape and apple in particular are experiencing a huge growth (Varmundy).
Local production
Almarai and other local manufacturers that have monumental production facilities are able to fulfill a large percentage of the local market demand. Although a few companies directly import jams from outside the country, raw materials such as fruits are mainly imported while the actual production is conducted in house (Miah).
Import
Saudi Arabia imports enormous quantities of jams and jellies from foreign countries. The USA is one of the major suppliers of apple, oranges and grapes to Saudi Arabia. Saudi Arabia imported $117 million fresh and dried oranges in 2008 (IMB). Saudi Arabia also imports lemons worth $25 million, grapes worth $18 million, pineapple worth $5 million, plums worth $6 million and guavas worth $2 million from all over the world (The World Bank). In 2013, Saudi Arabia imported jam, jellies, purees and marmalades $6 million (CBI).
Export
Saudi Arabia mainly exports date. However, it does not export any jam or preserve product except to the Middle East countries. Local players, such as Almarai, Sadafc, and Abdul - Kadir Al Muhaidib & Sons Group produce and export jams from Saudi Arabia to other Gulf Cooperation Council (GCC) countries (Miah).
Biscuit
Market Volume and Size
Although chocolate is one of the fast developing markets in Saudi Arabia, biscuit constitutes a market larger in size in terms of sales volume in Saudi Arabia. The overall biscuit market sales were 86.7 thousand tons in 2009. It has seen a 5.6% year on year growth, and in 2014 the overall market size has increased to 114.1 thousand tons (Barndorf). The overall biscuit market in terms of value has increased from $457.6 million in 2011 to $549.6 million in 2014 (Berndorf).
Demand Growth
It is estimated that the demand of biscuit will continue to grow at a rate of 7.7% for at least next five years. According to the Euromonitor report, by 2019, the overall market demand of biscuits will rise up to 114.3 thousand tons (Berndorf). New varieties of biscuits such as McVities Digestive and chocolate sandwich biscuits are scaling up the demand (Aono). Additionally, a growing population of youth is also attributing to the growth of the biscuit segment.
Local Production and Number of Factories
Biscuit segment is well-developed in Saudi Arabia. The major market share in the biscuit market is enjoyed by local players, such as United Food Industries, National Biscuits and Confectioners, and Al Jazirah Food Processing. International players, such as Nabisco and Danone, also have biscuit factories based in Saudi Arabia (Aono). Saudi Arabia fulfills almost 70% of its demand from local production. The current production capacity is approximately 86,000 tons with some of the manufacturers planning to swell their production capacity in the coming days (Berndorf).
Demand and Supply Gap
In the biscuit industry, there is no gap between demand and supply. Many local manufacturers can increase the production capacity quickly as and when required. However, some types of biscuits, such as Turkish biscuits and chocolate sandwich biscuit, are not produced in Saudi Arabia currently, but the demand for these varieties is growing rapidly in the country. There is a huge annual demand of about 15,000 tons of Turkish biscuits (Gain Report). Though some of the Saudi manufacturers have started producing Turkish biscuits in-house, still a huge gap exists between demand and supply.
Import
Although the biscuit market is Saudi Arabia is pretty self-sufficient, the demand for imported biscuits is going up due to huge immigrant population in Saudi Arabia. Additionally, ever growing young population also show a fondness for the import varieties of biscuits, which is the primary reason for the import of biscuit. Approximately 28,700 tons of biscuits were imported from outside the country in 2013. The total value of import for the year 2013 was $157,457 million (Berndorf). Turkey, India, Philippines and the UK are the major import partners for biscuits.
Export
Saudi Arabian biscuits are becoming extremely popular outside of Saudi Arabia. The overall export was only $2.3 million in 2004, but since then the biscuit export has grown exponentially. Currently, total export of biscuits stood at $27 million (Aono). The majority of biscuits are exported to the USA, UK and Canada apart from other GCC countries.
Coffee
Market Volume and Size
Saudi Arabia is one of the fast growing coffee markets in the world. Even seven years back, the size of Saudi Arabian coffee market was below $1 billion. In 2014, the overall coffee market size was estimated to be $4 billion and in 2016, the coffee market is expected to grow by a whopping 77% and cross the $6 billion mark in terms of the total market value (Trade Arabia). With the younger generation embracing the western lifestyle, both tea (49% growth in 2016) and coffee are witnessing phenomenal growth (Trade Arabia).
Almost all global coffee players, such as Starbucks, are present in Saudi Arabia. Strong local players, such as Bonnon Coffee are also expanding rapidly (Trade Arabia). Although the exact tonnage figure is not available as Saudi Arabia does not publish domestic production figures, it is estimated that the overall coffee consumption will be more than 45,000 tons by the end of the year 2016 (Trade Arabia).
Demand Growth
As discussed in the previous section, the coffee market is growing at a phenomenal rate. In the past, Saudi Arabia imported coffee from foreign countries, which made switching to coffee as a regular drink an expensive affair for the end consumers. However, in recent years, after Saudi Arabia has developed processing capability, it imports coffee leaves and then processes it within the country. This has resulted in huge reduction in the end product cost and the demand has gone up substantially. It is projected that the demand will continue to grow at a annual rate of more than 25% for the next four years (Aono).
Local Production
Yemen is the largest producer of coffee in the Middle East region. Saudi Arabia is the second largest producer for the Arabica grade of coffee in the Middle East countries. Most of the coffees in Saudi Arabia are produced in Asir region (Aono).
Saudi Arabia has recently developed a processing capability that can handle almost all of its processing demands. Present processing facilities can handle almost 40,000 tons of coffee beans (Trade Arabia).
Demand and Supply Gap
Although Saudi Arabia produces a significant amount of coffee within the country, the demand still exceeds the supply. Almost 85% coffee bean demand of Saudi Arabia cannot be fulfilled from the local production alone (Trade Arabia).
Import
Saudi Arabia used to import the final coffee product even ten years back. However, with a huge improvement in processing facility, Saudi Arabia now imports coffee beans. Saudi Arabia imports most of its coffee beans from Ethiopia. In 2013, 26,743 tons of coffee were imported from Ethiopia. Saudi Arabia also imported approximately 5,000 tons of coffee from Yemen (Gain Report). It also imports coffee from Uganda, Brazil and Cote-d’Ivoire. It purchases 80% of Ethiopia’s residual green coffee beans at a minimal price (Gain Report).
Export
Saudi Arabia used to export coffee to other Middle Eastern countries, but with a huge surge in domestic demand, coffee export has reduced significantly.
Candies
Market Size and Volume
Candies are considered to be a part of the confectionery segment. The overall size of the confectionary segment in Saudi Arabia is $2.2 billion in 2014, and it is expected to grow at 12% cumulative annual growth rate (CAGR) from 2014 to 2018 (Reuters). $1.01 billion is the market volume for sugar confectionary products, which is predominated by candies and chewing gums (IMB). With people becoming more health conscious, the demand for pure chocolate products is expected to slow down in the future, but the demand for chewing gums will go up. Sugar confectionary market in Saudi Arabia is dominated by Krafts Food, Mars and Nestle. Local manufacturers also play a big role (Reuters).
Demand Growth
Candy market in Saudi Arabia is growing faster than the chocolate market. In fact, the size of the candy market already is larger than the chocolate market in terms of volume. However, due to lower price per unit, the overall value of candy market is still lower. By 2018, the candy market will be larger than the chocolate market in Saudi Arabia as the candy market is expected to annually grow at a rate of 12% compared to 7% growth of candy market (IMB).
Local Production
Most of the candies are produced locally in Saudi Arabia. In fact, large global manufacturers also have started producing candies locally. Mars has already set up a big production facility in Riyadh. Modalez is also planning to build manufacturing facility to fulfill chocolate and candy demands from local plants. However, higher value candies and gums are still imported from outside. It is estimated that about 70% of the total demand is fulfilled from local production (IMB).
Demand Supply Gap
Unlike some other categories, candies are mostly produced and consumed locally. Almost all of the local needs can be fulfilled from the local facilities. However, young and wealthy people want high end imported candies. Large number of migrant populations have also scaled up the demand for imported candies. This increased demand has created a demand supply gap for some of the high end products.
Import
Most of the candies are locally produced. However, a good many famous branded candy products are imported from outside. It is estimated that about 30% candies are imported. However, indirect import for this sector is larger. For example, a large percentage of imported sugar is used in the candy and chocolate production in Saudi Arabia. Sugar and candy import totaled $1.5 billion between 2012 and 2013 (Aono).
Export
Some of the Saudi candy manufacturers, such as National Biscuit and Confectionary Co. (NBCC) export candy products to the neighboring countries. However, the overall candy export from Saudi Arabia is negligible in amount.
Nuts
Market Size and Volume
Even though tree nuts are healthier than chocolate or sugary products, still the overall consumption of nuts is smaller in quantity than those products not only within Saudi Arabia but also across the world. It is difficult to find out the actual market size of nuts in Saudi Arabia. This is primarily because nuts are sometimes clubbed with dates and the segment is called dry fruits and seeds. In this category, other types of seeds such as sunflower, sesame etc. are also included (Nielsen). Nuts are sometimes included in the confectionary segment as nuts are sold with different forms of chocolates and sugary snacks.
The nuts market in Saudi Arabia is relatively small compared to other snacks and quick food items. The size of the market was $141 million in 2013 (IMB).
Demand Growth
Nuts market is not growing as fast as chocolate or coffee market in Saudi Arabia. In fact, salty savory nuts market is expected to grow at a moderate rate of 2% in the near future (Nielsen). Almond has the highest market share in the nuts market. With nutty sweet savory snacks gaining more popularity, nuts consumption is going up. It is expected that the overall nuts requirement will go up by 6% year on year (Gain Report).
Demand Supply Gap
Saudi Arabia does not have an ideal weather for nut production. Therefore, a huge demand and supply gap exists in the market.
Local production
There is no local production of tree nuts in Saudi Arabia (Gain Report).
Import
Saudi Arabia fulfills 100% of its demand through import. In the past, Iran and Turkey were the two main importing locations. However, the USA is the largest importer accounting for 40.4% of the total import. 31.8% of the total demand is fulfilled by importing nuts from India. Turkey (7.5%), Iran (4.2%) and Sri Lanka (4.1%) are the other major importing countries (Gain Report).
Export
Saudi Arabia does not export any nuts to other countries as it produces none.
Peanut Butter
Market Size and Volume
Peanut butter is a relatively small market in Saudi Arabia. In fact, in 2006 the total sales for peanut butter was only approximately $14,000. However, because of increased health awareness and superior marketing efforts from Goody Brand, the sales of Peanut Butter have seen a huge growth. Per capita consumption of peanut butter was 0.4 Kg annually in 2008. Presently, it is close to 1 Kg (Mahajan). Goody Brand of peanut butter has almost monopolized the market. The market share for Goody’s brand is 68%.
Demand Growth
Demand Supply Gap
The demand for peanut butter is relatively small in Saudi Arabia. The production capacity is far more than the demand, and therefore, currently so there is no demand supply gap.
Local Production
Goody is the largest peanut butter brand producing all of its peanut butter in Saudi Arabia. Some of the global players have started entering the Saudi Arabian market with their products. However, apart from local players \, none of the global players have set up a manufacturing facility in Saudi Arabia.
Import
Overall peanut butter demand is not huge in Saudi Arabia. Approximately 20,000 tons of peanut butter are consumed every year by the Saudis (Mahajan). Saudi Arabia imports small quantity of peanut butter from outside the country.
Export
Saudi Arabian companies are the major producers of peanut butter in the Middle East region. Saudi companies export substantial quantities of peanut butter to the UAE, Qatar, Kuwait, Bahrain and other Middle East countries.
Summary Table
Works Cited
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