December 6, 2013

Saudi Arabia accounts for 74% of Gulf's dairy market

A new report from food and drink consultancy Zenith International revealed that since 2007 dairy products market in the Gulf region was recorded a 50% growth.

Laban (or labneh) is the fastest growing category, with 9% growth in 2012.

Dairy product sales grew by more than 50% between 2007 and 2012 to US$5.8 billion in the six Gulf Cooperation Council (GCC) countries, the report said.

Saudi Arabia is the biggest dairy market among GCC states, accounting for 74% of volume. The largest product category is fresh white milk with a 41% volume share, followed by laban at 21%.

In terms of value, cheese is the leading category with a 22% share, closely followed by fresh white milk. Saudi Arabia leads the way in consumption per person, whereas consumers in Kuwait spend the most on dairy products.

"With many people leading more hectic lifestyles, the demand for packaged food is rising," said Zenith's regional research coordinator Harikrishnan Pillai. "The consumption of protein-rich food such as dairy is on the increase. The current market environment offers a substantial investment opportunity for local companies and multinationals."

The report also showed that 80% of dairy sales come from four key product categories: fresh white milk, laban, yogurt and cheese.

The growth in 2012 was stronger than in the previous four years, the main drivers being population, urbanisation, incomes and health awareness.

Saudi Arabia is providing a strong impetus to the market, with its consumers moving toward healthier eating habits, the report noted.