BlueWeave Consulting, a leading strategic consulting and market research firm, in its recent study, estimated Saudi Arabia coffee market size at USD 1,645.15 million in 2022. During the forecast period between 2023 and 2029, BlueWeave expects Saudi Arabia coffee market size to grow at a steady CAGR of 5.07% reaching a value of USD 2,314.51 million by 2029. Major growth factors of Saudi Arabia coffee market include growing demand for innovative flavors and new tastes to complement traditional styles. The surging corporate culture and urbanization has contributed to this trend. The country’s increasing café culture has also propelled the Saudi Arabia coffee market forward, with specialty coffee gaining popularity. The Saudi government’s Vision 2030 initiative aims to diversify the country’s economy and decrease its dependence on oil exports. To promote domestic coffee consumption, the government launched the Year of Saudi Coffee 2022 campaign, with plans to grow higher-quality coffee and export it on a large scale by 2040. Also, the Public Investment Fund has invested in the Saudi Coffee Company and aims to develop academies to train entrepreneurs, coffee plantation owners, and farmers to start their own businesses. Such initiatives are expected to offer lucrative opportunities for the growth of the coffee market in Saudi Arabia during the forecast period. However, rising cost of agricultural input is anticipated to restrain the overall market growth.
Saudi Arabia Coffee Market – Overview
Coffee is a popular brewed beverage made from roasted coffee beans, which are the seeds of certain types of coffee fruits. The seeds are separated from the berries and then roasted to produce a consumable product. The growing acceptance of Western culture in Saudi Arabia is due to the rise of the young population and foreign tourism. Arabica is more prevalent in this region, with low caffeine, high fat, and acidity. The central region of the country has the largest share of income due to its larger population, trade offices, and employment opportunities. The presence of famous Haji Places in Mecca and Medina also contributes to the growth of the Saudi Arabia coffee market, as it increases tourist footfall and demand for coffee in cafes. Specialty coffee in Saudi Arabia is also contributing to the market’s growth. Coffee shops now roast beans in front of customers and serve the coffee in Dallah, an Arabian coffee pot. Younger and older age groups have varying preferences, with younger people preferring mixed coffee or coffee with milk and flavored syrup, while older people prefer Turkish or espresso. This diversity in preference provides quality and variety in the coffee shops.
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Impact of COVID-19 on Saudi Arabia Coffee Market
The COVID-19 pandemic adversely affected various industries in 2020 including the Saudi Arabia coffee market. During Q2 2020, the market suffered a decline in growth due to the closure of retail stores and malls. Furthermore, the supply chain of raw materials was affected by the restrictions on goods transportation that were put in place worldwide. However, in 2021, the market began to recover and is forecast to witness significant growth in the coming years. This is because coffee sales have been increasing both on e-commerce websites and in physical stores throughout Saudi Arabia.
Saudi Arabia Coffee Market – By Product
By product, Saudi Arabia coffee market is divided into Whole-bean, Ground Coffee, Instant Coffee, and Coffee Pods & Capsules segments. The coffee pods & capsules segment holds the highest share in the Saudi Arabia coffee market due to its convenience and ease of use. Coffee pods and capsules are pre-portioned and pre-packaged, making it easy to make a quick cup of coffee without the need for additional equipment, such as a coffee grinder or a coffee maker. This convenience factor has led to an increasing demand for coffee pods and capsules in Saudi Arabia, particularly in settings such as institutions, commercial areas, restaurants, and hospitals, where there is a need for quick and efficient coffee service. Additionally, coffee pods and capsules are available in a wide range of flavors, catering to the diverse taste preferences of consumers in Saudi Arabia.
Competitive Landscape
Major players operating in Saudi Arabia coffee market include The Kraft Heinz Company, Starbucks Coffee Company, The J. M. Smucker Company, Luigi Lavazza SPA, Nestle SA, The Coca-Cola Company, JAB Holding Company, and Tata Global Beverages. To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.
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