Saudi Arabia’s food sales account for half of the domestic retail market in the country and are expected to reach $70 billion by 2016, according to new figures.
The Kingdom’s agricultural and food sectors are expected to sustain a combined annual growth of 18.5 per cent owing to a rising population and strong consumer spending, said a report by Riyadh Exhibitions Company.
According to an Alpen Capital report released this year, Saudi Arabia is the largest food producer in the region, accounting for 74.1 per cent of the total production.
The report said that Saudi would continue to lead the region’s food sector accounting for 59 per cent of the total consumption in 2017.
Saudi’s total food consumption is expected to grow at a CAGR of 2.6 per cent during 2012 to 2017 driven by population and per capita income.
Traditionally diary products and cereals have been the most popular foods to be consumed and the report estimates that cereals will remain the largest segment in the next five years although the growth rate is supposed to be slower than the other food categories, said the report.
Saudi Arabia is also one of the largest organic food markets in the GCC. According to the Middle East market consultancy firm Orient Planet, the organic food market in the Kingdom was estimated at $270 million in 2009 accounting for 90 per cent of the GCC organic food market.
“These are crucial times as far as the Kingdom’s agriculture and food sectors are concerned,” said Zeyad Al Rukban, assistant general manager, Riyadh Exhibitions Company.
“Saudi food requirements are rising to an all-time high, the government is intensifying efforts to come up with sound food security measures, and consumers with increasing spending power are demanding more diversity and quality.”