Product and Packaging Innovation in Canned Food Market
According to Chitwan Tayal, Market Research Associate at Ken Research, “Canned food market can be aided by introduction of new product categories and investment in packaging innovation. Organic food can be introduced in canned form to deliver health with convenience. Additionally, packaging innovation can be carried out in terms of non-BPA cans, recyclable cans and differentiated labeling based on target audience.”
Ken Research estimates that the canned food market in Saudi Arabia is expected to grow at CAGR of 1.9% for the next five years to reach around USD 509.9 million by 2022.”
Genesis of Canned Food Market
The canned food market in Saudi Arabia is about a 100 year old market. Most canned food companies in KSA were established in the late 1900s. Growth was seen in this market in its initial years due to the convenience canned food provided in terms of storage as well as cooking. Over time, however, the reach of fresh products has expanded in KSA and consumers have started opting for these over canned food products as these are perceived to be healthier. Growth in the market has become stagnant and is likely to grow at a subdued rate in the future.
Matured Stage of Canned Food Sector in KSA
Canned food market in KSA is currently in its mature stage. There are very limited product innovations happening and companies are having trouble retaining customers. Product categories available in the canned food market include canned dairy, canned fish, canned meat, canned fruits and vegetables, canned legumes and beans and canned cooking sauces. Of these, canned dairy is the leading product category. Canned food market in Saudi Arabia has grown at a CAGR of 3.1% in the past 5 years.
Saudi Arabia canned food market is concentrated in nature. There are a limited number of large domestic players dominating the market. The major players in the canned food market in Saudi Arabia include Saudi Goody Products Marketing Company Ltd., Gulf Food Industries – California Garden, Almarai Co., Luna (NFIC), Saudia Dairy and Foodstuff Company (SADAFCO), Del Monte Saudi Arabia Ltd., Al-Wedyan National Company for Food Products Ltd., Al-Alali and AKH Foods. Canned food companies compete on the basis of various factors including price of products, product differentiation and location of their distribution depots.
Revival in Demand from End User Segments
Growth in institutional end user segments such as hotels, restaurants and fast food outlets will be a major source of demand for canned food products in the future. Saudi Arabia has shifted its focus to investments in the tourism sector to reduce its dependence on revenues from oil. Canned food products are also in demand by catering companies supplying meals to Hajj and Umrah pilgrims. The pilgrims were 2.4 million in number in 2017.
Demand for canned food is likely to be adversely affected by the NITAQAT scheme and Saudization. This is because this scheme is leading to exit of expatriates, which are major end users for canned food, in large numbers. Negative perception of healthiness of canned food is also affecting the market negatively. Consumers are increasingly opting for fresh and frozen products over canned substitutes.
For more information about the research report, refer to below link:
https://www.kenresearch.com/food-beverage-and-tobacco/general-food/saudi-arabia-canned-food-market/149549-11.html
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