Biscuit sector on a roll in KSA

Competition is set to increase in Saudi Arabia’s already well-established biscuit sector
By Staff writer
Tue 31 Oct 2006 08:00 PM

Value sales of biscuits in Saudi Arabia are set to exceed SR1.3 billion (US $347.2 million) in 2006, while volume sales will rise to a little over 90,000 tonnes, according to the latest research from Euromonitor International. This means that the biscuits sector now represents the second largest area in the Saudi Arabian bakery products market, with value sales growing strongly at an average of 8% a year between 2000 and 2006.

The biscuits sector is highly developed owing to the strength of the local industry in Saudi Arabia, represented by large manufacturers such as United Food Industries, National Biscuits & Confectionery and Al Jazirah Food Processing, and the strong position of multinationals, such as Nabisco and Danone.

Euromonitor International also expects competition in the Saudi Arabian market to intensify further with the arrival of strong newcomers such as Master Foods and increased spending on advertising and promotion by all major players in the marketplace.

Euromonitor’s research shows that biscuits, particularly sweet biscuits, are generally sold at low prices, averaging between SR0.25 and SR2 (US $0.06 – US $0.53, for a single-serve pack and enjoy excellent distribution in all outlets. Biscuits enjoy high sales penetration amongst young children, but also among adult males, who often snack on biscuits during working hours. However, the general growing popularity of chocolate products for snacking purposes is proving to be an obstacle for further growth of biscuits as snack food products.

Growth in the Saudi Arabian biscuit market is being driven mainly by two factors – firstly, the marked increase in advertising spend by multinationals such as Nabisco, Master Foods and Danone or other smaller producers such as Ülker. Secondly, the popularity of emerging products such as chocolate-coated biscuits and bread substitutes, which have recently been launched in the market.

Despite the fact that demand for high-quality biscuits is set to continue, Euromonitor International predicts that unit prices are unlikely to increase due to the fierce competition between local and multinational players.

Pricing is becoming a key factor in driving sales, taking into consideration that children are the main purchasers of biscuits. Meanwhile, high-quality biscuits are now available at affordable prices, while multipacks or large boxes are also becoming popular thanks to their wide presence in many discounters and supermarkets / hypermarkets.

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