Saudi Arabia Food Service Market

Saudi Arabia Food Service Market Size (2024 to 2029)

The Saudi Arabia foodservice market is expected to experience a CAGR of 6% from 2024 to 20289.

The food service industry includes all companies that offer meals prepared outside the home, such as restaurants, school and hospital cafes, and food outlets. Mobile food services, such as the food truck industry, are also expanding in developing countries due to the increasing penetration of fast food restaurants. The fluctuation in oil prices has had a major impact on Saudi Arabia's GDP, which has led the government to fundamentally reform public spending.

The growth of the Saudi Arabian food service market is majorly driven by the increase in the number of transactions and the increase in prices, with the growth of the points of sale being slow. Urbanized and busy young consumers seek food services to satisfy their food cravings, as the changing roles of women and Westernized lifestyles encourage more meals away from home. The expanding urge for home delivery and food service providers is supposed to stir demand in this market. The increasing health awareness and increasing obesity rate among the Saudi population is a challenge for the market. Companies are preparing new and innovative healthy foods with organic and natural ingredients to overcome the challenges facing industry players. With the increasing popularity of fast food and casual dining, restaurant chain services are growing rapidly. In addition, global channels have followed the customization and localization strategy through smart changes to their menus, for example, the addition of McArabia Grilled Chicken Sandwich to their menu by McDonald's.

New entrants have a lot of potential to enter in this locale, as it is determined by three main aspects, i.e., higher disposable income, international exposure, and limited sources of entertainment. Also, the rise in the number of shopping malls in the country also supports business extension. The trend of eating outside food in KSA is developing rapidly and has become a significant attraction in the GCC area. The outside meal model in the GCC region has a significant impact on the KSA food service market. Due to Saudi Arabia's increasing trend towards Saudi Arabia and the constant support and encouragement of local companies by the Saudi government, investments are increasing in various industries, including the restaurant industry.

Impact of COVID-19 on Saudi Arabia food service market:

Covid-19’s impact on the food and beverage sector is immense. The strict government implementations like lockdown in Saudi Arabia resulted in the shutdown of manufacturing units and distribution channels, affecting the foodservice market to its deepest. The same is likely to continue until the end of 2020 as consumers prefer to consume foods prepared at home rather than going out. This will be a major threat to the food service industry, and it is estimated that it will take some time in the future to recover.

This research report on the Saudi Arabia food service market has been segmented and sub-segmented into the following categories:

Saudi Arabia Food Service Market – By Place Type:

• Full-Service Restaurants
• Quick Service Restaurants
• Food Junctions Cafeterias/Buffets
• Bars
• Managed Food Service

Based on place type, full-service restaurants had the highest market share of 36.0% in 2017 and recorded a CAGR of 4.3% during the forecast period. In contrast, the market share of fast-food restaurants is constantly increasing at a rate of 31.90% due to urbanization and the hectic lifestyle of the population living in metropolitan areas. The upward trend in mobile restaurants, such as food trucks, is also contributing to the growth of fast-service restaurants. As the government creates a complex regulatory landscape, restaurateurs focus more on the quality of food and services. Several players in the food service industry are focusing on digital media marketing and other innovative tactics to put exceptional quality in the spotlight. Furthermore, the concept of personalization is one of the main factors helping industry players generate more revenue from fitness fanatics and diet consumers.

Saudi Arabia Food Service Market – By End-User:

• Industrial Premises
• Commercial and Office Premises
• Hospital & Nursing Homes
• Educational Premises
• In-transit Food Service
• Sports Centers/Malls

Regional Analysis:

Consumers across the country, including a large number of ex-pats and tourists alike, are oriented towards casual Western-style restaurants, especially European and American cuisine. Therefore, casual American restaurants, such as Chili's, Fuddruckers, TGI Fridays, Applebee's, Sizzler, and On the Border, are very popular and are located in major cities in Saudi Arabia. Independent restaurant chains maintain a dominant position in the country's full-service restaurant segment, as they provide catering services with a full menu. During Ramadan, market giants like Hyatt Regency Tent and The Ritz-Carlton Residences offer a better dining experience to compete with small and medium food service providers.

KEY MARKET PLAYERS:

KFC, McDonald's, Pizza Hut, Burger King, Shawaya House, Dajen, Al-Beck, Herfy, Kudo and Taza are some of the major companies in the Saudi Arabia food service market.

RECENT HAPPENINGS IN THE MARKET:

• Reinhart Foodservice L.L.C acquisition is completed by Performance Food Group Co. (P.F.G.), with approximately $ 30 billion in annual net revenue.
• A distributor of disposable catering and cleaning supplies known as Imperial Dade, declared the acquisition of Wagner Supply Company. Acquisition strengthens Imperial Dade's presence in Texas even though it enhances the company's differentiated value proposition for customers in the area. Header Logo With branches in Odessa, Lubbock and Wichita Falls, TX, Wagner Supply Company is a family-owned distributor of cleaning and industrial products.
• In March 2020, US Foods is getting big with cash and transportation. The broadband distributor in Rosemont, Illinois, announced an agreement to purchase Smart Foodservice Warehouse Stores, which operates 70 small cash and transportation stores in many states. The stores, currently owned by private equity group Apollo Global Management, serve small and medium restaurants and other food customers with various products.
• In March 2020, NEOGEN Corporation announced that it has acquired the assets of Chilean company Magiar Chilena, a distributor of diagnostic products for food, animals and plants, including NEOGEN products.