Amna Puri-Mirza
Research Expert covering the Middle East
FMCG sector in Saudi Arabia - statistics & facts
The FMCG (Fast Moving Consumer Goods) or Consumer Packed Goods (CPG) industry represents one of the largest industries worldwide. By 2025, the real total consumer spending on food was expected to reach around 8.85 trillion U.S. dollars. In the Middle East and North Africa (MENA) region, Egypt had the highest total consumer spending on food and non-alcoholic beverages while Saudi Arabia ranked third. Up until recent years, the Gulf Cooperation Council (GCC) enjoyed positive effects of profits and revenue in the FMCG sector. The market experienced strong GDP and high population growth. There was a light regulatory environment with subsidies aimed at selected industries and the absence of taxes, such as value-added tax (VAT). This helped create a period of low market competitiveness as many companies were experiencing acceptable growth and attractive margins.
Saudi Arabia FMCG sector outlook
Like the rest of the GCC countries, Saudi Arabia has a young and growing population, and high GDP. These factors support the demand for dairy products, juices, and other food and beverages. Unemployment rates in the kingdom are decreasing after reaching around 8.22 percent during the COVID-19 pandemic. Such development is expected to increase household incomes, and consumer spending. The food and beverages market size was estimated to continue growing after the pandemic. As economic conditions are becoming more favorable, the government’s focus on diversification and food sufficiency is expected to be the driving force for the growth of the F&B sector over the coming years.Consumer behavior
The COVID-19 pandemic has shifted trends and lifestyles worldwide; the FMCG sector in Saudi Arabia was no exception. Consumers are expecting more convenience when it comes to their shopping behavior. More than one third of Saudis surveyed reported switching to online shopping due to supply chain issues. Moreover, consumers are considering more healthy and sustainable options. Around half of respondents in a survey stated that they were likely to consume less dairy products or replace products with alternatives like soy or soy milk to limit their contribution to climate change. More demanding consumers created challenges for businesses, but represented opportunities for growth too.
