KSA Specialty Food Ingredients Market Outlook to 2028

KSA Specialty Food Ingredients Market Overview

The Saudi Arabian (KSA) Specialty Food Ingredients Market has shown growth which was reflected in the global specialty foods ingredients market valued at USD 75 billion in 2023. This growth is primarily driven by the rising demand for processed and convenience foods, increased awareness of health and wellness, and a growing population with higher disposable incomes.

The KSA specialty food ingredients market is dominated by major global players such as Cargill, Tate & Lyle, Kerry Group, ADM, and Du Pont. These companies have established their presence through extensive product portfolios, strategic partnerships, and continuous innovation in ingredient solutions.

In 2023, Cargill announced a USD 100 million investment to enhance its specialty food ingredient production capabilities. This expansion aims to meet the increasing demand for functional and health-promoting ingredients in the region, positioning Cargill to better serve its customers with improved supply chain efficiencies.

In 2023, the North region, including Riyadh held the largest market share. This dominance is due to the presence of major food processing industries and favourable government policies supporting industrial development.

KSA Specialty Food Ingredients Market Segmentation

KSA's specialty food ingredients market is segmented into product type, application, and region.

By Product Type: The KSA specialty food ingredients market is segmented by product type into natural flavours, emulsifiers, and enzymes. In 2023, natural flavors dominated the market which was driven by the increasing consumer demand for clean label and organic products.

By Application: The market is segmented by application into bakery and confectionery, dairy and frozen desserts, and beverages. Bakery and confectionery held the largest market share in 2023 as it was driven by the increasing consumption of bakery products and confectionery items, particularly during festive seasons and celebrations.

By Region: The KSA specialty food ingredients market by region is segmented into North, South, East, and West. The northern region including Riyadh dominated the market in 2023, due to the presence of major food processing industries and favourable government policies supporting industrial development.

KSA Specialty Food Ingredients Market Competitive Landscape

Company

Establishment Year

Headquarters

Cargill, Inc.

1865

Minneapolis, USA

Tate & Lyle PLC

1921

London, UK

Kerry Group

1972

Tralee, Ireland

Archer Daniels Midland Company

1902

Chicago, USA

Du Pont de Nemours, Inc.

1802

Wilmington, USA

Du Pont: In 2023, Du Pont acquired a local specialty ingredients company for USD 200 million. This acquisition aims to strengthen Du Pont's presence in the KSA market and expand its product portfolio. The move is expected to enhance Du Pont's distribution network and improve its ability to serve local customers with a wider range of high-quality ingredients.

Tate & Lyle: In 2024, Tate & Lyle launched a new range of prebiotic fibers called Promitor® Soluble Fiber targeting the health and wellness segment. This innovation addresses the increasing consumer demand for digestive health products. Initial sales figures indicate that the new product range generated USD 50 million in revenue in the first quarter of 2024, highlighting its successful market entry and acceptance.

KSA Specialty Food Ingredients Market Analysis

KSA Specialty Food Ingredients Market Growth Drivers:

Increasing Demand for Functional Foods: In 2024, the demand for functional foods in KSA has risen, with consumers spending over USD 300 million on health-enhancing ingredients such as probiotics, prebiotics, and omega-3 fatty acids. This growth is supported by an increasing awareness of the benefits of functional foods in managing chronic health conditions like diabetes and cardiovascular diseases.

Increasing Demand for Functional Foods: In 2023, consumers spent more on health-enhancing ingredients such as probiotics, prebiotics, and omega-3 fatty acids. This growth is supported by an increasing awareness of the benefits of functional foods in managing chronic health conditions like diabetes and cardiovascular diseases.

Growth in the Food Service Industry: The food service industry in KSA is expanding rapidly in 2024. This growth has been driven by an increase in dining out and the popularity of health-oriented menus in restaurants and cafes. As a result, the demand for specialty food ingredients such as natural flavours and clean-label additives has increased to meet the consumer preference for healthier dining options.

KSA Specialty Food Ingredients Market Challenges:

Market Saturation and Competition: The specialty food ingredients market in KSA is becoming increasingly saturated, with over 200 companies competing for market share in 2024. This intense competition drives down prices and margins, making it challenging for new entrants to establish themselves.

High Cost of Natural Ingredients: The cost of sourcing natural ingredients like stevia and monk fruit has increased by USD 100 million in 2024 compared to 2022 due to global supply chain disruptions and higher demand. This cost escalation poses a challenge for local manufacturers, who must balance the rising costs with the need to offer competitively priced products.

KSA Specialty Food Ingredients Market Government Initiatives:

Vision 2030 Food Security Plan: Under the Vision 2030 initiative, the Saudi government has allocated USD 2 billion towards enhancing food security and promoting local production of specialty ingredients. This plan includes subsidies for local farmers to grow high-demand crops and investments in food processing technologies.

Healthy Food Initiative: Launched in 2024, the Healthy Food Initiative received USD 200 million in funding to promote the consumption of healthier food options and reduce diet-related diseases. This initiative supports the development and marketing of foods enriched with specialty ingredients like vitamins, minerals, and fiber.

KSA Specialty Food Ingredients Future Market Outlook

The KSA specialty food ingredients market is expected to grow in the coming years. The market is also likely to shift towards more organized with established players and online platforms expanding their reach.

KSA Specialty Food Ingredients Future Market Trends

Growth in Clean Label Products: The trend towards clean label products is set to continue, with consumers increasingly seeking transparency and simplicity in ingredient lists. By 2028, clean-label products are projected to account for USD 1 billion in sales, driven by consumer demand for natural, non-GMO, and minimally processed foods. This trend will encourage manufacturers to innovate and develop new clean-label ingredient solutions.

Increasing Focus on Personalized Nutrition: Personalized nutrition is set to become a major trend in the specialty food ingredients market over the next five years. By 2028, the market for personalized nutrition solutions is expected to reach USD 500 million, driven by advancements in nutrigenomics and consumer demand for tailored dietary solutions.
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