Saudi Arabia Baby Food Market Research Report: Forecast (2023-2028)

Market Insights

The Saudi Arabia Baby Food market is projected to grow at a CAGR of around 6.1% during the forecast period, i.e., 2023-28. Baby food products are specially manufactured to meet the nutritional requirements of babies aged between 4-6 months & 2 years and come in different varieties & flavors. The emerging health & wellness trends & the growing interest of parents in child nutrition are helping baby food product manufacturers gain traction in Saudi Arabia. The lack of time available for cooking due to the busy lifestyle & the increasing number of working women in the country have boosted the market during the historical years.

Moreover, the rising awareness regarding the need for a healthy nutritional diet for infants has also encouraged the demand for baby food in the country in recent years. Consumers in the country are highly inclined towards products with different types of flavors & dietary supplements, owing to which, several companies are launching various new products to meet the demand & provide more new & healthy options.

Additionally, in the past few years, the country has witnessed a continuous rise in GDP per capita income, from USD19,539.6 in 2020 to USD23,185.9 in 2021, transforming the lifestyles of individuals who are now increasingly adopting baby food to avoid the hassle of preparation through conventional methods. Hence, an upsurge in per capita income, changing consumer lifestyles, the growing number of working women, and the rising overall population levels are expected to drive the market in Saudi Arabia over the coming years.

Furthermore, industrialization in the country has provided many job opportunities, which have strengthened the number of expatriates in the country. There is a growing infant population in the country due to the presence of a large number of expatriate families, which is driving the demand for infant formulas and ready-to-eat baby foods. Thus, the rising number of expatriate families & growing awareness about the advantages of feeding nutritious baby food to infants are other prominent aspects projected to stimulate market growth in the forecast years.

Market Dynamics

Significant Driver: Rapidly Rising Working Women Population

The number of women joining the workforce in the country has introduced many new reforms that the government implemented since 2019, and these include pension equality by equalizing the retirement ages for men & women and mandating pension care credits for maternity leaves. According to the World Bank, these reforms are already benefiting 6 million Saudi women aged above 21. It further states that in 2020 alone, almost 7,782 women entered the construction sector, where women’s employment was previously prohibited by law & around 6,662 took on new roles in manufacturing. As working women do not spend much time at home, they are highly dependent on baby food products to provide their children with proper nutrition. Hence, the rapidly rising working women population is the key aspect expected to drive the Saudi Arabia Baby Food Market during 2023-28.

Possible Restraint: Various Government Efforts Towards Encouraging Breastfeeding to Hamper the Market

Traditions & cultural aspects have a deep influence over the governance & society in the country. Along with this, as per its cultural beliefs, breastfeeding is believed to be the optimal method of infant feeding. Owing to this, the government & various non-governmental organizations are actively promoting breastfeeding in the country. Therefore, despite a largely positive outlook for baby food, its demand may decline in the forecast period owing to government restrictions on discounts in the milk formula category to achieve greater control over its sales.

Furthermore, the Saudi government is looking to phase out price discounts to make milk formulas less affordable to encourage breastfeeding. The removal of subsidies on these products sold through pharmacies, supermarkets, & hypermarkets might also impact the distribution landscape in the future, which would negatively impact the sales of baby food products, especially milk formulas, in the succeeding years.

Key Trend: Organic Baby Food Gaining Popularity Among the Health-conscious Parents

Organic baby food is gaining immense popularity in Saudi Arabia as more & more parents are embracing health & wellness trends and are increasingly focusing on providing healthier nutrition to their children. The country is witnessing cumulative penetration of various new players, such as Arla Foods’ new Baby&Me products, along with the growing traction of organic brands & products, such as Gerber Cereals, Arla Porridge, Holle Organic goat milk formula, and Gerber Organic snack with no added salt. Hence, the rising inclination of consumers toward feeding organic products to their babies, owing to their growing awareness of the various health benefits, would continue to boost the market during the forecast period.

Market Segmentation

Based on Category:

• Milk Formula
  • Standard Milk Formula
  • Follow-on Milk Formula
  • Growing-up Milk Formula
  • Special Baby Milk Formula
• Prepared Baby Food
• Dried Baby Food
• Other Baby Food

Of them all, Milk Formula holds a sizeable share of the Saudi Arabia Baby Food Market owing to its nutritive function, which exhibits high nutritional value, with ingredients like protein, iron, & calcium. The infant milk formula attempts to mimic the nutritional composition of breast milk, owing to which most mothers who are on some kind of medication or with maternal medical conditions prefer it. There are many common concerns among new mothers during their initial post-pregnancy days, like latch-on pain, i.e., normal for the first week to 10 days. These conditions among women are encouraging the adoption of milk formulas in the country, and, in turn, propelling the overall market growth.

Based on Distribution Channel:

• Retail Offline
  • Grocery Retailers
    • Convenience Retail
    • Supermarkets
    • Hypermarkets
    • Small Local Grocers
  • Non-grocery Retailers
    • Health & Beauty Specialists
• Retail E-commerce

Among them, Retail Offline seized remarkable growth in Saudi Arabia Baby Food market in the previous few years. The extensive range of consumer goods in grocery stores & supermarkets, which have convenient operational timings, have promoted baby food sales through retail channels. However, sales through e-commerce platforms are rising as online shopping is becoming increasingly popular in Saudi Arabia, owing to the rising internet penetration & the surging availability of secured payment options.

Moreover, ease in online money transfer, cash on delivery, direct debits, and e-wallet choices in the light of Vision of 2030 which aims to accelerate the digital economy & cashless transactions to 70% by 2025, is another crucial aspect driving the e-commerce sector in the country. According to International Trade Administration, Saudi Arabia has one of the highest smartphone penetration rates in the world, along with higher mobile broadband internet subscriptions than the majority of advanced markets. Owing to this, online sales of baby food products in the country have increased to almost 60% on average across all categories.

E-commerce platforms like Amazon, eBay, etc., deploy various marketing & sales techniques to give people that extra reason to buy products. Moreover, as e-commerce platforms allow consumers to explore more varieties & brands, various new baby food products are witnessing a considerably rising adoption in the country.

Recent Developments in the Saudi Arabia Baby Food Market

• 2022: Nestle announced investing USD1.86 billion in Saudi Arabia over the next 10 years. Under this, the company is establishing a new manufacturing site in the country, which is set to open in 2025. The plant will manufacture infant-nutrition products & instant coffee.

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