Saudi Arabia Key Dairy Growth Market19 March 2013
SAUDI ARABIA - Milk consumption in Saudi Arabia reached 729.4 million litres in 2012. In value terms this was worth €685 million at retail level, according to Michael Hussey from the Consumer Foods Division of Bord Bia – Irish Food Board.
Consumption has grown by six per cent per annum since 2007 and is now 24.6 litres per capita.
Ambient milk still dominates the market and accounts for 62 per cent, while fresh milk now makes up 38 per cent of the market. Ambient milk has grown by 3.4 per cent per annum since 2007 but fresh has been growing at 11.3 per cent per annum since 2007.
This is being driven by urbanisation, better access to the cold chain, the growth of modern retail outlets and rapid growth in the ownership of domestic fridges. The overall market is forecast to grow by 4.9 per cent per annum to 2016, fresh by 5.6 per cent and long life by 4.5 per cent.
The fresh milk market is dominated by Almarai with 46 per cent market share followed by Al Safi Danone at 21 per cent, Nada Dairy at 13 per cent and Nadec at nine per cent with others making up the remaining 11 per cent. In the long life category, Sadafco dominates with 47 per cent share followed by Almarai at 17 per cent, Freisland at 12 per cent and Al Safi Danone at 8 per cent and others making up the remaining 16 per cent.
In the second half of 2012, Almarai switched to recombining for all its long life milk, both plain and flavoured. This has been followed by Al Safi Danone. This was due to the continued growth in demand for fresh product in Saudi and some other GCC markets, and concern at Government level over the depletion of their non renewable ground water resources.
The Kingdom has already depleted 70 per cent of these sources of water and must now turn increasingly to desalinisation which when factored into the cost of producing fresh milk is very expensive. Experts have estimated that it takes between 500- 1000 litres of fresh water to produce 1 litre of fresh milk if one takes into around the irrigation required to grow the Rhodes grass or Alfalfa required to feed the cows.
The Saudi Government has recently capped the growth in dairy herds which should intensify the move to recombining to satisfy the growth in demand. The growth in the use of milk powders presents an opportunity to Irish exporters. Ireland can position itself as a key partner to Saudi processors and players in the market, on the basis of having a sustainable production model. Bord Bia is planning a market visit to Saudi Arabia in the third quarter of 2013.
TheCattleSite News Desk