The Saudi Arabia ice-cream market is experiencing rapid growth, driven by climatic, economic, and cultural factors. The demand for frozen desserts remains, with average annual temperature exceeding 35°C in many regions. The rising disposable income is further boosting demand for premium, indulgent treats. In 2024, Saudi Arabia food and beverage sector accounted for approximately 30% of the total retail market. This highlights the important role of frozen desserts within the broader industry. As the nation continues to modernize its retail infrastructure and embrace digital transformation under Vision 2030, the ice cream market is set for further growth.
What’s Driving Ice-Cream Market in Saudi Arabia?
- The rising disposable income and urbanisation is resulting in higher consumer spending on indulgent food items, including premium ice cream products. Moreover, urbanisation has also facilitated the expansion of modern retail outlets, making ice cream more accessible to a broader population.
- The expansion of organised retails and e-commerce platforms has enhanced the availability of ice cream products across the country. The e-commerce platforms and food delivery apps have made it easier for consumers to purchase ice cream, especially among younger demographics seeking convenience.
- The growing consumer preferences for healthier ice cream options, such as low-fat, low-sugar, and dairy-free alternatives are encouraging manufacturers to introduce products that cater these health-conscious demand. The manufacturers are incorporating natural ingredients and functional additives like probiotics and vitamins to make ice-cream more attractive to health-conscious consumers.
Market Competition
The Saudi Arabia ice-cream market is highly competitive, with mix of established local brands and international players. The major players including Saudia Dairy & Foodstuff Co. Ltd (SADAFCO), Baskin-Robbins, and Unilever dominates the competitive landscape. SADAFCO is a leading player and has leveraged extensive distribution channels. In 2023, SADAFCO expanded its operations into Oman, highlighting its intent to strengthen its presence in the Gulf region. Baskin-Robbins has over 150 outlets in Saudi Arabia. The brand is introducing new flavours to appeal diverse taste of the consumers. Meanwhile, Unilever focuses on premium product lines and has been investing in marketing campaigns that resonate with the health-conscious segments to introduce options like low-fat and dairy-free ice creams.
Cost and Complexity of Cold Chain Logistics
The Saudi Arabia ice-cream market is witnessing major challenge of escalating cost and complexity of cold chain logistics. The average temperature often exceeding 35°C and reaching up to 52°C during peak summer months. Thus, ensuring the integrity of ice cream products from production to point-of-sale is both critical and costly. The cold storage logistics including temperature-controlled storage facilities, refrigerated transportation, and energy-intensive retail freezers requires huge investments. These costs can sometimes be burden for small and medium-sized enterprises (SMEs) who are attempting to enter or expand within the market.
Future Outlook
The Saudi Arabia ice-cream market is set to undergo significant transformations through 2030. The market will witness shift towards health-conscious and innovative products. Thus, driving the demand for low-sugar, dairy-free, and plant-based ice creams. By 2030, over 40% of the ice-cream sales will occur through e-commerce platforms. This growth will be supported by younger demographics seeking convenience. The international brands will enter Saudi market to cater the growing demand for premium ice-cream products. Additionally, Sawani, launched by the Public Investment Fund in January 2023, expanded its retail presence by opening new stores in Jeddah and Makkah in 2024, aligning with the Vision 2030 initiative to diversify the economy and promote local products.
Consultant at Nexdigm In their latest publication “Saudi Arabia Ice-Cream Market Outlook to 2030: By Flavor (Vanilla, Chocolate, Fruit, and Others), By Category (Impulse Ice Cream, Take-Home Ice Cream, Artisanal Ice Cream), and By Product (Cup, Stick, Cone, Brick, Tub, and Others)” believes that by expanding cold chain infrastructure for quality assurance and innovating with health-centric and premium products lines, businesses can gain competitive advantage in Saudi Arabia ice-cream market.