Saudi Arabia Dairy Products Market By Product Type (Butter, Cheese, Milk, Yogurt, Others), By End User (Residential, Commercial), By Distribution Channel (Supermarket & Hypermarket, Convenience Stores, Online, Others), By Region, Competition, Forecast & Opportunities, 2020-2030F

Market Overview

Saudi Arabia Dairy Products market was valued at USD 7.23 Billion in 2024 and is expected to grow to USD 9.65 Billion by 2030 with a CAGR of 4.93%. The Saudi Arabia Dairy Products market is experiencing significant growth, driven by several key factors. Rising health consciousness among consumers has led to an increased demand for nutritious and functional dairy products, such as fortified milk and probiotic-rich yogurts. The rapid urbanization and evolving lifestyles of the population have also contributed to the growing demand for convenient, ready-to-eat dairy items like single-serving yogurts, cheese snacks, and packaged milk. Also, government initiatives to enhance food security and achieve self-sufficiency in dairy production have bolstered the market through subsidies and investments in infrastructure. Technological advancements in farming and production processes have improved efficiency and product quality. Also, there is a rising preference for organic and hormone-free dairy products, expanding market opportunities. These factors collectively support the ongoing growth of Saudi Arabia's dairy market.

Key Market Drivers

Increasing Government Support for Food Security

Increasing government support for food security is a key driver of the Saudi Arabia dairy products market. As part of its Vision 2030 initiative, the Saudi government is committed to enhancing the country's food security by promoting self-sufficiency in agricultural production, including dairy. This has led to significant investments in local dairy production, with the government offering subsidies and financial support to dairy farms and production facilities. The government also encourages the development of modern farming techniques and infrastructure to boost the quality and quantity of dairy products. Also, there are policies in place to support the dairy sector in meeting growing consumer demand, both domestically and regionally. These initiatives aim to reduce reliance on imports and ensure a stable supply of dairy products for the population. By strengthening local production capabilities, the government is creating a more sustainable and resilient dairy market, driving growth and stability within the sector.

Growing Innovation by Key Player

Growing innovation by key players is a significant driver of the Saudi Arabia dairy products market, as companies work to meet the evolving demands of health-conscious consumers. As a part of this, as of May 2025, Saudi Arabia has established a major dairy industrial cluster in Al-Kharj, strengthening its goal of becoming the region's leading center for dairy production and food manufacturing. To stay competitive, industry leaders are investing heavily in research and development to create new, innovative products and improve existing offerings. This includes the introduction of lactose-free, fortified, and plant-based dairy alternatives to cater to a broader audience. Also, there is a growing focus on developing functional dairy products with added health benefits, such as probiotics and vitamins, to appeal to consumers seeking nutritious options. Technological advancements in packaging, such as modified atmosphere packaging (MAP), are also playing a key role by extending shelf life and reducing food waste. Through continuous innovation, companies are enhancing product variety and quality, contributing to the growth of the dairy products market and meeting the demands of an increasingly diverse consumer base.

Rising Health Consciousness

Rising health consciousness is a key driver in the growth of the Saudi Arabia dairy products market. As consumers become more aware of the health benefits associated with dairy, there has been an increasing demand for nutritious and functional dairy options. Products like low-fat milk, fortified dairy, probiotic-rich yogurts, and lactose-free alternatives are gaining popularity among health-conscious individuals. Many consumers are now seeking dairy products that support bone health, digestive health, and overall wellness. Also, as awareness of the importance of a balanced diet grows, dairy is being recognized for its essential role in providing calcium, protein, and other vital nutrients. This shift in consumer attitudes is encouraging dairy brands to innovate and expand their product offerings to meet these health demands. As a result, the market is witnessing a rise in the availability of healthier, more specialized dairy options that align with the growing emphasis on well-being and nutritional value.

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Key Market Challenges

Increased Competition from Plant-Based Alternatives

Increased competition from plant-based alternatives is a significant challenge for the Saudi Arabia dairy products market. As a part of this, according to a recent study, as of 2022, the Saudi Arabian market for soymilk beverages reached a volume of 4.7 metric tons.As consumer preferences shift towards healthier, more sustainable options, the demand for plant-based dairy alternatives, such as almond milk, soy milk, oat milk, and coconut-based yogurt, is rising. This trend is being driven by a growing awareness of lactose intolerance, veganism, and concerns over the environmental impact of animal farming. Plant-based products are often marketed as being more suitable for health-conscious individuals and those seeking to reduce their environmental footprint, making them attractive alternatives to traditional dairy. As a result, dairy companies face increasing pressure to diversify their product portfolios and introduce more plant-based options to meet the changing consumer demand. The rise of plant-based products is also intensifying competition in the market, forcing traditional dairy brands to innovate and adapt in order to retain their customer base and maintain market share.

Strict Government Norms

Strict government norms present a significant challenge to the Saudi Arabia dairy products market. The government has implemented rigorous regulations to ensure food safety, quality, and transparency in the dairy industry, which, while beneficial for consumer protection, impose substantial operational burdens on dairy producers. Companies must comply with strict standards related to production processes, ingredient sourcing, packaging, and labeling. These regulations often require significant investments in quality control systems, testing, and certifications to ensure compliance. Also, dairy producers must adhere to guidelines concerning animal welfare, environmental sustainability, and traceability of the products. The cost of meeting these standards can be high, especially for smaller producers, and can limit the flexibility of companies in terms of pricing and product innovation. Also, changes in government policies or the introduction of new regulations can disrupt business operations and lead to delays or increased operational costs, affecting the overall competitiveness of the market.

Key Market Trends

Rise of E-Commerce and Omnichannel Retail

The rise of e-commerce and omnichannel retail has significantly impacted the Saudi Arabia dairy products market. As a part of this, according to the International Trade Administration, as of 2024, 33.6 million Saudis used the internet for e-commerce (buying and selling), a 42 percent increase from 2019.  With increasing internet penetration and shifting consumer behaviour, more consumers are opting for the convenience of online shopping for dairy items. Major retailers such as Carrefour and Lulu have enhanced their digital presence, offering home delivery services and seamless shopping experiences through mobile apps and websites. This trend is especially prominent in urban areas where time efficiency and convenience are priorities. E-commerce platforms are not only increasing accessibility to dairy products but also enabling consumers to explore new products, brands, and promotions. Also, this shift is encouraging companies to adopt an omnichannel strategy, integrating both physical stores and online platforms to create a more personalized and comprehensive shopping experience, ensuring growth and greater market reach.

Urbanization and Demographic Shifts

Urbanization and demographic shifts are pivotal drivers of the Saudi Arabian dairy products market. As of 2022, the nation's population stood at approximately 32.2 million, with over 63% under the age of 30, and a significant proportion residing in urban areas. This urban concentration fosters increased access to modern retail outlets, such as supermarkets and hypermarkets, which offer a diverse array of dairy products. Consequently, urban consumers exhibit a preference for convenient, ready-to-consume dairy items, aligning with their fast-paced lifestyles. Also, the younger demographic is more inclined to experiment with various dairy products, including flavored milks, yogurts, and cheeses, further propelling market growth. The influx of expatriates into urban centers also introduces diverse dietary habits, influencing local consumption patterns and expanding the demand for a broader range of dairy offerings

Strategic Investments by Industry Leaders

Strategic investments by industry leaders are playing a crucial role in shaping the Saudi Arabia dairy products market. Almarai, the largest dairy company in the region, has committed to a comprehensive five-year plan, investing billions to expand its market presence. This investment focuses on enhancing supply chain capabilities, product innovation, sustainability, and improving operational efficiency. Also, Almarai is diversifying its portfolio by exploring new food segments such as seafood, beef, and lamb production, establishing domestic production facilities to align with the country's Vision 2030 goals of food security and reducing import dependency. This proactive approach helps industry leaders strengthen their brand, improve competitiveness, and drive growth in both the domestic and regional markets. By focusing on innovation, sustainability, and diversification, these investments are helping shape the future of Saudi Arabia’s dairy industry.

Segmental Insights

Product Type Insights

Butter dominated the Saudi Arabia Dairy Products market, driven by several factors. It remains a key ingredient in traditional Saudi cuisine, used in a variety of local dishes and baked goods, ensuring its steady demand. Also, the growing health and wellness trend has contributed to butter’s popularity, especially with the rise in demand for ghee and clarified butter, which are seen as healthier fat alternatives when consumed in moderation. The increasing trend of home cooking and baking has also boosted butter consumption, as it is a fundamental component in many recipes. Also, product innovation, such as the introduction of premium and organic butter options, has attracted health-conscious consumers, further driving growth in the market. These factors collectively position butter as a dominant player in Saudi Arabia's dairy sector.

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Regional Insights

Eastern dominated the Saudi Arabia Dairy Products market, driven by a combination of favorable environmental, economic, and infrastructural factors. This region benefits from an arable landscape conducive to cultivating animal feed, which supports sustainable dairy farming. Its proximity to key urban centers and ports facilitates efficient distribution and export logistics, enhancing market reach. Also, the presence of large-scale dairy companies, such as Almarai, headquartered in the region, has spurred investments in advanced dairy farming, processing facilities, and research and development. These factors collectively bolster the Eastern Province's status as a pivotal hub for dairy production and distribution in Saudi Arabia. Also, the Northern & Central region's is driven due to the region's high population density, which creates substantial demand for dairy products across urban and suburban areas. As the economic and industrial hub of the nation, Riyadh attracts numerous dairy companies and fosters a thriving market. The region's advanced infrastructure, including well-developed transportation networks and efficient distribution channels, ensures easy accessibility of dairy products.

Recent Developments

• In October 2024, The Yoghurt Shop, an Australian Greek yogurt producer based in Adelaide, South Australia, has expanded into Saudi Arabia with its official launch at Tamimi Markets in Riyadh. Established in 2003, the family-owned business is now introducing its premium products to the Saudi market.
• In September 2023, Sawani launched its first "Nouq" store in Riyadh, specializing in camel dairy products. The Nouq store, a flagship initiative of Sawani, a leading company in the camel dairy sector in Saudi Arabia and fully owned by the Public Investment Fund (PIF), is strategically located on Anas Bin Malik Road in the capital.

Key Market Players  

• Almarai Company
• AlSafi Danone
• Nada
• Arla Foods amba
• Forsan Foods and Consumer Products Company Ltd
• Saudia Dairy and Foodstuff Company (SADAFCO)
• Nestle S.A
• Britannia Industries Limited
• Dodla Dairy Limited
• Gujarat Co-Operative Milk Marketing Federation Limited

Report Scope:

In this report, the Saudi Arabia Dairy Products Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

•   Saudi Arabia Dairy Products Market, By Product Type:

o   Butter

o   Cheese

o   Milk

o   Yogurt

o   Others

• Saudi Arabia Dairy Products Market, By End User:

o   Residential

o   Commercial

• Saudi Arabia Dairy Products Market, By Distribution Channel:

o   Supermarket & Hypermarket

o   Convenience Stores

o   Online

o   Others

• Saudi Arabia Dairy Products Market, By Region:

o   Eastern

o   Western

o   Northern & Central

o   Southern

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in the Saudi Arabia Dairy Products Market.

Available Customizations:

Saudi Arabia Dairy Products Market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).

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