Saudi Arabia Food Service Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2024 - 2030)

Saudi Arabia Food Service Market Trends and Growth Drivers

Digital Transformation of Food Service Market Act as Significant Market Trend

• The digitalization of the food service market in Saudi Arabia has been significant in recent years.
• The integration of IoT in by food service companies facilitates real-time inventory level, temperature, and humidity monitoring while in transit, to satisfy customer needs.
• In December 2023, NEOM announced ‘Topain’, a food company. Topain will be in charge of redefining food production, distribution, and consumption for the benefit of the kingdom's citizens, by developing creative and sustainable solutions.

Growing Expansion of International Restaurants Driving Market Growth

• Several international players are expanding their restaurant networks in Saudi Arabia, which is driving the growth of the market.
• Several businesses, including the food service sector, are rapidly modernizing, which is why many well-known eateries are opening new locations in Saudi Arabia, primarily in Riyadh and Jeddah.
• In addition, Crown Prince Mohammed bin Salman’s Vision 2030 plan seeks to transform several facets of the Saudi culture and the economy, including the restaurant industry. The restaurant industry is experiencing a surge in interest due to the initiatives aimed at boosting tourism, diversifying the food offerings, and attracting both domestic and international capital.
• Furthermore, the food tech startup Rebel Foods has opened its first two cloud kitchens in Riyadh, Saudi Arabia, marking the beginning of its entry into the kingdom. Rebel Foods is the first food-tech firm from India to enter Saudi Arabia, having established a presence in the country after spearheading the cloud kitchen space in that country.

Regulatory Hurdles and Compliance Issues Act as Key Market Challenges

• Adhering to regulatory frameworks and addressing compliance issues are among the primary challenges faced by Saudi Arabia's food service industry.
• The regulatory framework in the country may present difficulties and stringent rules for restaurants and online meal delivery services.
• These regulations, which have an impact on how these platforms operate, could include distribution limitations, food safety guidelines, licensing requirements, and respect for cultural and religious customs.
• Adhering to Halal principles is one of the most-important aspects for Saudi Arabia's food industry. Online meal delivery businesses need to ensure that the eateries they list comply with Halal laws.
• Furthermore, it can be challenging to manage licensing and permits for food delivery services across the country due to the variations in municipal legislations.

Saudi Arabia Food Service Market Outlook

Service Type Insights

• Full-service restaurants will hold the largest share of the market, of 35%, in 2024 because family outings are the most frequented in the nation.
• The cafes and bars category are expected to show the highest CAGR, of 9.2%, over the forecast period. This is because they offer food and beverages in a relaxed or informal atmosphere and create a space for a variety of activities and social interaction.

The service types analyzed in this report are:

• Fast Food
• Full-service (Largest Category)
• Quick-Service
• Cloud Kitchens
• Cafes and Bars (Fastest-Growing Category)
• Others

Outlet Type Insights

• Independent outlets will hold the larger share of the market 65%, in 2024.
• Independent restaurants provide distinctive, personalized eating experiences that influence the growth this segment in the Kingdom of Saudi Arabia.
• Chain outlets are expected to show a higher CAGR, of 9.0%, over the forecast period. This is because chained outlets provide menu consistency and convenience to customers.

The outlet types analyzed in this report are:

• Chain (Faster-Growing Category)
• Independent (Larger Category)

Cuisines Insights

• Western cuisine will hold the largest share of the market, of 45%, in 2024. This is due to fast-food companies expanding and providing a wider variety of fast-food options, such as burgers and pizza.
• Asian cuisine is expected to show the highest CAGR, over the forecast period. The key reason for this rapid increase in popularity is its health benefits, which perfectly match the life preferences of the kingdom's people and changing tastes of international tourists.

The cuisines analyzed in this report are:

• Western (Largest Category)
• Middle Eastern
• Asian (Fastest-Growing Category)
• European
• Others

Business Model Insights

• Dine-in holds the largest share of the market, in 2024.
• The demand for dine-in options is driven by the rising rate of urbanization, which causes lifestyle changes for the people of the kingdom and encourages them to eat out more often.
• The delivery category is expected to show the highest CAGR, over the forecast period. This is because of the convenience, time-saving, and the wide range of options available to consumers, particularly younger generations.

The following business models are analyzed in this report:

• Dine-In (Largest Category)
• Takeaway
• Delivery (Fastest-Growing Category)

Province Insights

• Geographically, Al-Riyadh will generate 40% of the countrywide revenue and dominate the market in 2024. It is also expected to witness the highest CAGR, during the forecast period. This is because Riyadh is home to most of the international food brands.
• In November 2023, spread over 21 kitchens and 11,200 m², Al Mamlaka social dining bought Saudi culture with international F&B companies, five award-winning chefs, and eight new brands which has seen 7,000 visitors every day.

The following provinces have been analyzed in this report:

• Al-Riyadh (Largest and Fastest-Growing Province)
• Makkah
• Al-Madinah
• Al-Qaseem
• Eastern Province
• Aseer
• Tabouk
• Hayel
• Northern Border
• Jazan
• Najran
• Al-Baha
• Al-Jouf

Market Concentration – Fragmented

Saudi Arabia’s foodservice market is fragmented due to the presence of both international and local players in the market. The top major players hold the most market share. The major share of the market is dominated by the small and medium enterprises that are highly competitive among themselves and also with the large enterprises.

Saudi Arabia Food Service Market Companies News

• In April 2024, Meituan, a Chinese startup providing on-demand local services, is preparing to launch KeeTa, an international food delivery platform, in Riyadh, Saudi Arabia.
• In February 2024, Barbra announced that it would be entering Saudi Arabia, in collaboration with the U.A.E.-based catering company Big Apple Sweets. In the year leading up to February 2025, 10 new locations are scheduled to open throughout the region.
• In January 2024, Pizza Inn, a branch of Rave Restaurant Group, entered into a franchise agreement with the Blessings Basket Company to expand its presence in Saudi Arabia. Pizza Inn and Blessings Basket are going to open 50 new restaurants.
• In October 2023, GFH Financial Group announced that it had signed an agreement to buy a major food services and logistics company in Saudi Arabia, named The Company.