Saudi Arabia Organic Food Market

As per the GMI Research’s latest report, the Saudi Arabia Organic Food market accounted for USD XX million in 2019 and is expected to reach USD XX million in 2026, growing at a robust CAGR of 14.8% during 2019-2016

Organic foods products are produced by methods that comply with the specific standards of organic farming. These products are processed and grown differently than regular food items and are safer, healthier, and tastier. They do not contain any artificial preservatives or synthetic chemicals, including fertilizers and pesticides. The organic farming practices helps in reducing pollution, conserves water, eliminates the possibilities of soil erosion, while improving the soil fertility.

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The Saudi Arabia Organic Food Market is becoming more mainstream thanks to the increasing consumer awareness regarding the benefits offered by organic food products, followed by the rapidly increasing cases of lifestyle-related diseases in Saudi Arabia. The Saudi Arabian government has launched numerous favorable initiatives, including the Sustainable Agricultural Rural Development Program and Organic Action Plan, aiming to accelerate the production of organic food items by investing SR 750 million to support small farmers in the country. Moreover, the Organic Action Plan focuses on increasing organic production in Saudi Arabia by 300 percent. All these programs will energize the growth of the market in the coming years.

The consumers are becoming more aware regarding food safety, quality, and nutritional intake, which is creating innumerable growth opportunities, thereby encouraging new players to enter the market. Simultaneously, the millennials are significantly shifting towards healthy diet patterns and focusing on their overall well-being. The organic food products contain fewer chemicals, such as fungicides, herbicides, and insecticides and help conserve the environment. In parallel, the rising urban population rate and increasing household disposable income will indirectly surge the demand of the market. The emergence of COVID-19 is promoting the consumers to adopt for organic food products rather than consuming meat-based food items. Due to the unavailability of vaccination for COVID-19, people have started stocking up the essential food items, which in turn, is the major factor responsible for the strong demand for organic food products.

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Based on type, the organic diary segment is projected to grow at the higher CAGR during the forecast period. This is attributed to the fundamental shift in the consumer’s preference for natural dairy products across the country. Several organic dairy product manufacturers are continuously investing in product development, such as the introduction of low fat and reduced level of sodium in organic milk, to gain a competitive advantage over the other players and at the same time, build a positive brand image. Additionally, the organic fruits and vegetables segment is anticipated to dominate the market over the forecast period owing to the growing consumer awareness regarding the exceptional nutritional value provided by organic fruits and vegetables. The emerging trend of healthy diet patterns, along with the attractive discount offers provided on bulk orders, will further attract many consumers to the market.

Based on the distribution channels, the online stores segment is expected to grow at a higher CAGR during the forecast period owing to the increasing penetration of e-commerce in the country, followed by favorable government initiatives such as the digital economy initiative, to bring digitalization in the country. Souq/Amazon and Noon are the prominent players selling organic food products across different online platforms. Furthermore, the coming of new e-commerce players, such as True Beauty by Almizan, will drastically increase the competition in the market, thus providing numerous benefits to the consumers. On the other hand, the Supermarket/hypermarket segment is projected to lead the market during the forecast period. The significant factors, such as 24*7 open, wide range of products and services, and other payback and free home delivery options, are contributing to the strong demand of the segment.

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Various notable players operating in the market include Danone, General Mills Inc., Organic Valley, Organic Life Est., Natureland, Abazeer, Almizan Natural Trading Company, HiPP, Arla Foods, and Heinz Baby, among others.

Key Market Developments:

• • In February 2020, Arla Foods launched its new range of organic supplements in the Saudi Arabia. The company launched 4 products namely Mom Formula, Infant Milk Formulas, Multi-grain porridges, Pouches/fruit and vegetable porridges. Through this strategic product launch, the company strengthened its position in the Saudi Arabian organic products market.
  • In October 2019, General Mills Inc. entered into an agreement with Bidfood KSA in order to expand its distribution of Green Giant Frozen Vegetables across Saudi Arabia food service channels. Through this strategic product launch, the company has strengthened its presence in Saudi Arabia organic foods market.
  • In August 2019, Organic Valley launched its new FUEL high-protein milk shake, made with organic protein and essential nutrients. The product was developed to meet the growing demand of consumers for high protein & low-sugar choice without any harmful chemicals and growth hormones. This expansion in the product portfolio has led to the growth in the sales of the company.
  • In March 2018, Danone entered into an agreement with National Agricultural Development Company (NADEC) to sell Its 61% stake to NADEC accounting for $143 million. Through this strategic acquisition, NADEC has increased its dairy portfolio and has strengthened its presence throughout the region, including Saudi Arabia, UAE, Kuwait, Bahrain, Jordan and Lebanon.
  • In 2017, Almizan launched a mobile application named as True Beauty. The main aim of the application is to offer organic food throughout Saudi Arabia. This platform showcases products from various organic brands of Germany, France, India and USA.

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Key questions answered in this research report:

• • At what pace is Saudi Arabia Organic Food market growing? What will be the growth trend in the future?
  • What are the key drivers and restraints in Saudi Arabia Organic Food market? What will be the impact of drivers and restraints in the future?
  • What are the various types of organic food in the Saudi Arabia Organic Food market, and how they are poised to grow?
  • How the penetration of organic food is changing and what is driving this change?
  • What are the different distribution channel and which distribution channel is being preferred by the end-users?

Market Segmentation

Saudi Arabia Organic Food Market by Type

• • Organic Meat & Poultry
  • Organic Dairy
  • Organic Fruits & Vegetables
  • Organic Spices & Pulses
  • Organic Processed Food
  • Organic Cereal & Food Grains
  • Other Food Types

Saudi Arabia Organic Food Market by Distribution Channel

• • Supermarkets/Hypermarkets
  • Online Stores
  • Specialized Stores
  • Other distribution channels

Leading market players (Option 5: As a part of the Free 25% Customization – Profiles of 5 Additional Companies of your Choice)

• • Arla Foods
  • General Mills Inc.
  • Organic Valley
  • Danone
  • Organic Life Est.
  • Natureland
  • Abazeer
  • Almizan Natural Trading Company
  • HiPP
  • Heinz Baby