Saudi Arabia Coffee Market Industry size was valued at US$ 4.09 Bn. in 2023. Coffee will encourage a great deal of transformation in Beverage Sector in Saudi Arabia.
Saudi Arabia Coffee Market Definition and Estimation
Coffee, a brewed beverage made from roasted coffee beans, holds a prominent place in Saudi Arabian culture, often serving as a centerpiece in social gatherings, weddings, and daily life. The Saudi Arabia Coffee Market Industry encompasses various segments, including different coffee bean sources, types, and processes. The valuation of USD 4.09 billion in 2023 underscores the beverage's growing popularity and the dynamic nature of its market in Saudi Arabia.
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Saudi Arabia Coffee Market Growth Drivers and Opportunities
Several key factors are propelling the expansion of Saudi Arabia's coffee market:
- Cultural Significance: Coffee, particularly the traditional Saudi brew known as "Kawa," is deeply ingrained in the social fabric of the country. Served during meetings, weddings, and social events, coffee consumption is a longstanding tradition that continues to thrive.
- Rising Demand for Specialty Coffee: There is an increasing appreciation for high-quality, specialty coffees among Saudi consumers. This trend has led to a proliferation of specialty coffee shops and micro-roasters, catering to consumers seeking unique flavors and artisanal brewing methods.
- Government Initiatives: The Saudi government's Vision 2030 plan aims to diversify the economy and reduce reliance on oil exports. As part of this initiative, the Public Investment Fund launched the Saudi Coffee Company in 2022, investing $319 million over the next decade to support the growth of the national coffee industry—from production to consumption.
- Growing Café Culture: The increasing number of cafés and coffee bars in urban areas has transformed coffee consumption into a social activity, further driving the demand for high-quality coffee products. In 2022 alone, Saudi Arabia's branded coffee shop market grew by 18.5% to reach 3,550 outlets.
- Health and Wellness Trends: An increasing focus on health and wellness encourages individuals to incorporate coffee into their daily routines, owing to its antioxidant properties and potential health benefits.
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Saudi Arabia Coffee Market Segmentation Analysis
The Saudi Arabian coffee market is segmented based on source, type, and process.
1. Source:
- Arabica: Known for its mild flavor and aromatic qualities, Arabica beans are highly favored among Saudi consumers. In 2023, Arabica dominated the market with a 59% share, driven by consumer preferences and health benefits associated with this bean type.
- Robusta: Characterized by a stronger, more bitter taste, Robusta beans contain higher caffeine content and are commonly used in instant coffee and espresso blends.
2. Type:
- Instant Coffee: Offers convenience and speed, appealing to consumers seeking quick preparation without compromising on taste. The instant coffee segment is the market's largest contributor and is predicted to increase at a CAGR of 5.63% over the forecast period.
- Ground Coffee: Preferred by traditionalists and coffee enthusiasts who value the brewing process and the ability to customize their coffee experience.
- Whole Bean: Chosen by consumers who prefer to grind their beans, ensuring freshness and control over grind size for various brewing methods.
3. Process:
- Caffeinated: The standard form of coffee, containing natural caffeine levels, remains the dominant choice among consumers.
- Decaffeinated: Provides an alternative for individuals seeking to reduce caffeine intake while still enjoying the flavor of coffee.
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Saudi Arabia Coffee Market Regional Insights
The central region of Saudi Arabia holds the largest market share, attributed to its larger resident and working population, particularly in and around Riyadh. The presence of trade offices and employment hubs contributes to higher coffee consumption in this area. Additionally, the western region, encompassing Mecca and Medina, experiences increased demand due to the influx of tourists and pilgrims.
Competitive Landscape
The Saudi Arabian coffee market features several key players focusing on innovation and strategic expansion to enhance their market presence. Notable companies include:
- Nestlé S.A.: A leading global coffee brand offering a wide range of products catering to diverse consumer tastes.
- Luigi Lavazza S.p.A.: An Italian manufacturer known for its premium coffee offerings and commitment to quality.
- The J.M. Smucker Company: Offers a variety of coffee products, emphasizing high-quality beans and sustainable sourcing practices.
- Saudi Goody Products Marketing Company: Focuses on providing accessible coffee options to Saudi consumers, with an emphasis on convenience and quality.
- Baja Food Industries Co.: A local company offering a range of coffee products tailored to regional tastes and preferences.
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