KSA Edible Oil Market Outlook to 2028

KSA Edible Oil Market Overview

In 2023, the KSA Edible Oil Market is valued at USD 350 million, driven by a growing population, rising disposable income, and increasing consumption of processed foods. This demand has been supported by an expanding food service sector and rising health awareness. Sunflower oil and palm oil are the dominant types in the market, driven by their widespread use in cooking and processed foods. Moreover, the increased demand for healthier oils like olive oil also contributes to market growth.

Key players dominating the KSA edible oil industry include Savola Group, Almarai, United Foods, and Mazola. Savola Group remains the largest producer, with a diverse portfolio of cooking oils like sunflower and canola. Mazola, a significant player in the health-conscious segment, focuses on corn and olive oil. Almarai has a substantial market presence through its collaboration with international oil brands

In 2022, Olam Group sold a 35.43% stake in Olam Agri to the Saudi Agricultural and Livestock Investment Company (SALIC) for $1.24 billion. This transaction valued Olam Agri at approximately $3.5 billion. The partnership aims to enhance Olam Agri's access to high-growth markets in the Middle East, aligning with the increasing demand for food security in the region.

Riyadh and Jeddah dominate the KSA edible oil market. Riyadh leads due to its high population density and substantial foodservice sector, while Jeddah, being a key port city, is the entry point for imported oils like palm and soybean oil. The high concentration of retail chains, hypermarkets, and foodservice outlets in these cities ensures robust consumption patterns.

KSA Edible Oil Market Segmentation

By Product Type: The market is segmented by product type into sunflower oil, palm oil, olive oil, and others (soybean oil, canola oil). In 2023, sunflower oil held the largest market share, driven by its affordability, high availability, and increasing preference for heart-healthy oils. Brands like Savola and Afia are leading suppliers in this segment. Sunflower oil's versatility for both household use and foodservice industries contributes to its dominance.

By Distribution Channel: The market is segmented into supermarkets/hypermarkets, convenience stores, online retail, and foodservice. Supermarkets and hypermarkets dominated in 2023, owing to their widespread presence and the preference for bulk buying among consumers. These channels benefit from consumer trust and the ability to offer promotions and discounts.

By Region: The market is regionally segmented into the Central, Western, Eastern, and Southern regions. The Central region, holds a dominant market share in 2023 due to its large population and high purchasing power. This region has a well-established retail network and strong demand for premium edible oils, especially among health-conscious consumers. The rising number of households and urbanization further contribute to its market share dominance.

KSA Edible Oil Market Competitive Landscape

Company
Establishment Year
Headquarters
Savola Group
1979
Jeddah
Almarai
1977
Riyadh
United Foods
1976
Dubai, UAE
Mazola
1911
Chicago, USA
Afia
1990
Jeddah

United Foods: In 2024, United Petfood has signed a share purchase agreement to acquire Vital Petfood Group, located in lgod, Denmark. This acquisition will enhance United Petfood's portfolio, which already includes various pet food manufacturing facilities across Europe. Vital specializes in dry and semi-moist pet food for private labels and its own brands. In addition, the acquisition will strengthen United Petfood's market presence in the Nordic region, further solidifying its position as a leading pet food manufacturer in Europe.

Savola Group: In 2021, Savola Foods, a subsidiary of Savola Group, completed the acquisition of Bayara Holding Limited for approximately USD 260 million. This acquisition is part of Savola's strategy to diversify its offerings in high-growth, value-added food categories, particularly targeting younger consumers. Bayara is well-known in the UAE for its range of packaged foods, including nuts and spices, and has a strong distribution network across the Middle East and Africa.

KSA Edible Oil Industry Analysis

Growth Drivers:

Increased Consumption of Healthier Edible Oils: The demand for healthier oils like olive and sunflower oil saw a significant increase, driven by Saudi Arabias changing consumer preferences as olive oil consumption in Saudi Arabia increased by 25% between 2018 and 2022. Also, heightened awareness of cardiovascular health. Cardiovascular diseases or CVDs account for 28% of non-communicable disease (NCD) deaths in Saudi Arabia, underscoring their status as a leading health issue.

Foodservice Sector Expansion: The growing tourism and foodservice sector in KSA, fueled by Vision 2030, has directly impacted the demand for edible oils. Saudi restaurant sales increased by 13.66% to $23.8 billion in 2023, with December sales reaching SR8 billion, reflecting a growing consumer preference despite challenges like increased competition and rising operational costs.

Rising Demand from the Packaged Food Industry: In 2019, Saudi Arabia imported $2.7 billion worth of intermediate food items, primarily for further processing. Additionally, U.S. processed food exports to Saudi Arabia were valued at $533.8 million in 2022, reflecting a 16% increase from the prior year. This growth directly impacted the demand for edible oils, as manufacturers increasingly relied on oils like sunflower, palm, and soybean for product formulations, particularly in snacks, baked goods, and ready-made meals.

Market Challenges:

High Dependence on Imports: Despite local efforts to increase oilseed production, Saudi Arabia still heavily relies on imported edible oils, particularly palm oil from Malaysia and Indonesia. Till recently, edible oils consumed in the Kingdom were imported, leading to price volatility due to fluctuations in global supply chains. The cost of imported oils increased compared to the previous year, putting pressure on local distributors and retailers

Logistical Bottlenecks: The distribution of edible oils within Saudi Arabia faces logistical challenges, especially in transporting products from Jeddah port to inland cities like Riyadh and Dammam. An increase in transportation costs due to fuel price hikes and port congestion added in additional expenses to the industry. This bottleneck has been identified as a major challenge for domestic producers and importers alike.

Environmental Sustainability Concerns: Palm oil production, a key segment of the edible oil market, has come under scrutiny due to its environmental impact. Increased regulations in key supplier countries like Indonesia caused disruptions in supply chains. Additionally, KSA's commitment to international environmental agreements has placed pressure on local companies to shift to more sustainable oil sources, which requires significant investment in sustainable supply chains.

KSA Edible Oil Future Market Outlook

As Saudi Arabia progresses with its Vision 2030 agenda, the edible oil market is expected to witness significant transformations driven by health-conscious consumer behavior, government initiatives promoting self-sufficiency, and innovations in oil production and packaging.

Future Trends

Shift Toward Sustainable Production: This shift will be driven by rising environmental awareness and stricter regulations on palm oil imports from key supplier nations. Additionally, manufacturers will seek certification from sustainable organizations to appeal to eco-conscious consumers. Innovations in biodegradable packaging and reduced carbon footprints will also become central to brand strategies, setting new industry standards.

Rise in Demand for Premium Oils: There will be an increasing demand for premium oils such as olive oil, particularly among the growing middle and upper-middle class. Consumers will become more health-conscious, and the market for high-end edible oils will see robust growth as a result. The shift towards healthier lifestyles will also spur demand for organic and cold-pressed oils. Furthermore, premium oil brands will expand their product lines to include infused and specialty oils, catering to gourmet cooking trends.
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