In its recent analysis of dairy products packaging in Saudi Arabia, TechNavio highlighted how dairy products can pose exceptional packaging demands in the Gulf.Along with an inhospitable climate, dairy products can face lengthy journeys to the consumer, which has obliged multinationals to adopt new packs for serving their Middle East consumers.
Since milk is easily contaminated because of the fermentation of lactose, dairy products need to be packed in durable materials, said TechNavio.
“Vendors in the dairy products packaging market in Saudi Arabia are continuously upgrading their technologies and packaging materials to prevent contamination of dairy products,” said the company.
But increased demand for milk and milk products has also spurred a transformation in the packaging industry, according to the research company, which forecasts a CAGR of 5.37% for the Saudi sector in 2014–19.
Meanwhile, demand for packaging is also surging on the rising popularity of smaller multipacks and rising customer preference for yoghurt.
Euromonitor has also recently turned its attention to the Saudi dairy sector, giving forecasts for each of its key segments.
Cheese
A heavy focus on new product development and advertising campaigns by leading companies buoyed this market in in 2014, according to Euromonitor.
Companies including Deemah-United Foods Industries Corp, Saudi New Zealand Milk Products, and Lactalis International also launched new products with exciting new flavours during the year. But Almarai led with a 22% value share, invested heavily in advertising, and benefited from its world-class supply chain.
Saudi Arabia’s growing health awareness will raise cheese demand, according to Euromonitor. Mothers entering the workforce are expected to look for food products that save their time in kitchen but provide the necessary nutrients to their children along with a pleasant taste.
Drinking Milk
Greater concern over health is also likely to benefit drinking milk as shoppers look for less fat and more nutrients.
Almarai retained its position as the category leader with a 34% value share and strong loyalty towards the brand.
A trend for women to know more about healthier eating habits and to try to incorporate these into their family life is set to strengthen, to the benefit of drinking milk products.
Yoghurt and sour milk
In recent years, demand for yoghurt has risen with Ramadan’s arrival during summer, when consumers prefer to break their fast with products that help beat the summer heat and provide some hydration and coolness.
Almarai retained its leadership in 2014 with a massive 49% value share, said Euromonitor. Outdoor, TV and digital advertising for its pro/pre-biotic brand Vetal ran throughout 2014.
Other dairy
In 2013 and 2014 major packaging changes lifted value sales to 15%, compared with 14% seen during Euromonitor’s review period, said the company.
Manufacturers worked to cut packaging costs and give consumers more appealing packaging. In condensed/evaporated milk, new packaging formats were introduced by Saudi Dairy & Foodstuff for Saudia, Danya Foods Ltd for Puck, and Friesland Arabia for its brand Rainbow, said Euromonitor.
In other categories, the addition of new flavours continued in chilled dairy-based desserts. These developments helped give other dairy a boost.
National Food Industries led the category in 2014 with a 16% value share, largely due to its strong position in condensed/evaporated milk with its flagship Luna brand.
Exponential growth in the retail landscape is going to affect categories including other dairy. Smaller groceries are growing in number as well as supermarkets and hypermarkets. With the help of suppliers through branded refrigeration units, small-scale retailers are also going to have better access to cold chain.