Saudi Arabia’s Food Economy: Balancing Local Production with Imported Goods
Saudi Arabia is experiencing a shift in its food economy, driven by consumer demand for health, convenience, and affordability. While a growing interest in locally produced goods is emerging, imported products continue to hold a significant share of the market, particularly in higher-end categories. This dynamic is unfolding against the backdrop of the Kingdom’s Vision 2030 plan, which aims to diversify the economy and boost local industries.
The demand for organic food in Saudi Arabia has been steadily increasing over the past decade, fueled by greater health consciousness and a commitment to sustainability. Companies like Originz are playing a key role in meeting this demand, offering a range of organic and healthy food products. However, the supply of locally grown organic produce remains limited, leading to a debate over the benefits of local versus imported options.
According to a report analyzing the retail market in Saudi Arabia, several categories already demonstrate strong local dominance. Meat and meat products currently have a 60% local market share, while liquid milk and eggs boast even higher rates of 85% and 98% respectively. Dairy-based beverages and bakery products also show impressive local production capabilities, with market shares of 85% and 75% respectively. This success is attributed to the Kingdom’s focus on food security and government investment in agricultural and food industries.
However, not all sectors are experiencing the same level of local production. Prepared and preserved vegetables, fruits, and nuts, along with energy drinks, still rely heavily on imports, with imported products holding a 35% and 20% share of those markets respectively. This indicates a gap in local production, particularly in specialized or niche markets requiring advanced manufacturing processes or access to ingredients not readily available domestically.
Despite the growth of local industries, imported products maintain a substantial presence across various sectors. Consumers are increasingly willing to stretch their budgets to maintain access to convenience and choice, leading to high rates of dining out (47% at least once a week), takeaway orders (53% regularly), and purchases of prepared food (55% regularly) – all figures exceeding global averages.
The evolving food economy is also driving growth in related sectors. Demand for delivery and platform services is boosting logistics, payments, data analytics, and artificial intelligence. These spillover benefits extend beyond food retail and support Saudi Arabia’s ambition to lead the region’s digital economy.
Consumers in Saudi Arabia are not simply prioritizing cost, health, and convenience in isolation. They are seeking all three simultaneously, a trend that is reshaping how value is defined in the food economy. Scaling local production at affordable prices is seen as a key route to consumer loyalty and a foundation for broader economic diversification and food security.
The nutritional quality of prepackaged foods, including those with health or nutritional claims, is also a consideration for consumers. Studies are being conducted to assess differences in nutritional content between products carrying health claims and those without, offering further insight into consumer choices.
As of , the Saudi Arabian food economy is at a pivotal moment, balancing the desire for local production with the continued demand for imported goods. The Kingdom’s Vision 2030 plan and evolving consumer preferences are driving significant changes, creating both challenges and opportunities for businesses and policymakers.
