While not the easiest place in the world to operate a successful F&B business, with a surge of investment in infrastructure, a boom in franchised fast food chains and a developing youth market enamoured with modern products, Saudi Arabia is fast becoming a goldmine for the food industry.
As the group Coldplay rightly sang, ‘nobody said it would be easy’, but those F&B companies looking for success in Saudi Arabia have many reasons to be optimistic.
With the public sector investing heavily in infrastructure developments, new malls, hotels and restaurants are popping up everywhere and with this comes a big slice of opportunity for savvy food and catering suppliers.
| Advertisement |
Al Diyafa — a sister company to Horeca Trade and a food and beverage distribution company dedicated to the foodservice channel in KSA — is a relative new comer to the Saudi market that has already had success.
It was established in early 2009 in a partnership with United Group and has already developed brands such as San Pellegrino, Lamb Weston, Pride Cheese, illy Coffee, Monin, and Sweet Streets.
Managing director Hisham Al Jamil says the success of the company is due in part to the figures that make for very good reading for food service providers operating in KSA.
“The F&B market in Saudi is estimated at US $5 billion and is growing at 7-10% per annum,” he explains.
“More than 65,000 foodservice outlets including institutional channels exist in KSA and are growing at a rate of 8% per annum. In terms of value, the ‘education’ channel has a large share (9.4%) compared with most countries due to the young population ratio.”
Street channels — defined as small or low quality eateries — occupy a quarter of the total market, with catering taking up 12% due to the large number of foreign workers, many of whom are provided meals as part of their employment.
In real terms, this latter group alone represents 16,000 individual operators, something companies such as Al Diyafa are looking to supply.
Another company which is capitalising on this surge in development is Saudi Arabia-based Binshihoun, which launched its hospitality arm, Royal Host, in 2006.
Binshihoun, one of KSA’s leading importers for household products since 1955, recognised the growing demand for quality and innovative food products and services in the Kingdom and set up Royal Host to cater to it.
Search our database of more than 2,700 industry companies
