Saudi Arabia Coffee Market Overview, 2029

Saudi Arabia, with its affluent economy and evolving consumer preferences, presents a promising landscape for the coffee industry. Coffee consumption in the country has been on the rise, fueled by a burgeoning café culture, growing awareness of specialty coffee, and shifting demographics. In Saudi Arabia, traditional coffee, known as "qahwa," embodies the essence of hospitality. Crafted with care, qahwa is brewed using aromatic cardamom and saffron, often in a traditional "dallah" pot, symbolising a gesture of warm welcome and deep respect for guests. This ritual extends beyond mere consumption; rather, it is a communal experience, fostering inclusivity and strengthening social ties as it is shared among family, friends, and even strangers. The preparation and serving of qahwa constitute a ceremonial art, involving meticulous processes from bean roasting and grinding to the graceful pouring technique, which has been passed down through generations. This cultural tradition not only enriches social interactions but also underscores the significance of coffee within Saudi Arabian society, reflecting its integral role in fostering connections and cultivating meaningful relationships. Several driving forces are propelling the Saudi Arabian coffee market forward. The country's growing GDP and increasing disposable incomes are expanding the consumer base for premium beverages like coffee. A young, urbanised population is embracing modern coffee trends, while evolving tastes are pushing demand towards specialty brews and convenient formats. The proliferation of coffee chains is fostering a vibrant café culture, and government initiatives supporting domestic production are further stimulating market growth.

According to the research report "Saudi Arabia Coffee Market Overview, 2029," published by Bonafide Research, the Saudi Arabian coffee market is expected to reach a market size of more than USD 3 Billion by 2029. Saudi Arabian consumers' tastes have changed as a result of exposure to Western trends and culture, including a developing taste for coffee. Western-style coffee shops and brands have grown in popularity as a result of satisfying Saudi customers' need for superior coffee experiences. Saudi Arabia's urban population is on the rise, with more people living in cities and metropolitan areas. Urban dwellers tend to have higher incomes and more exposure to international coffee culture, driving demand for coffee products. Saudi Arabia's coffee industry thrives through key events held throughout the year. The Saudi Specialty Coffee Festival in February highlights specialty roasters, baristas, and equipment, fostering industry connections and consumer awareness. In April, HORECA Riyadh becomes the largest hospitality and foodservice exhibition in the country, attracting major players and facilitating networking opportunities. September's National Coffee Day promotes local coffee consumption and community initiatives. October hosts the Saudi Coffee Forum, bringing together leaders, experts, and investors to discuss industry trends and challenges. February's Gulf Food in Dubai showcases international coffee brands and technologies in the regional food and beverage scene. Throughout the year, the Specialty Coffee Association (SCA) offers workshops, conferences, and competitions, enriching participants with valuable insights and networking opportunities.

In the Saudi Arabian coffee market, adherence to regulations is essential. The Saudi Food and Drug Authority (SFDA) ensures food safety and quality, with all coffee meeting its standards. The Ministry of Commerce and Investment (MCI) regulates commercial activities and imports, while the Zakat and Customs Authority imposes duties on coffee products. The Ministry of Agriculture supports domestic coffee production and enforces farm regulations. Certification is crucial, with SFDA Halal certification mandatory. Specialty Coffee Association (SCA) certification enhances trust. Rainforest Alliance and Fairtrade certifications are increasingly popular for ethical sourcing. Organic certification can boost prices. Alcohol content is strictly prohibited, and advertising must comply with SFDA guidelines. A 15% value-added tax (VAT) applies to all coffee products. Compliance ensures market access and consumer trust in this growing industry.

In examining the Saudi Arabian coffee market, it becomes evident that it encompasses a rich tapestry of segments, each tailored to diverse consumer preferences and consumption behaviors. Across various product types, such as roasted and ground coffee, instant coffee, whole bean coffee, and coffee pods or capsules, distinct sub-segments emerge, reflecting nuances in taste, convenience, and brewing preferences. Roasted and ground coffee stand out as a dominant choice, favoured for its traditional appeal in both home and café settings, with sub-categories including single-origin, flavoured, and decaffeinated options. Meanwhile, the instant coffee segment commands a significant market share owing to its convenience and affordability, with a trend towards premiumization evident through enhanced taste profiles and ingredient quality. Whole bean coffee, appealing to aficionados and home baristas seeking freshness and brewing control, witnesses steady growth driven by varied sourcing and roasting techniques. Additionally, the burgeoning popularity of coffee pods and capsules underscores the allure of single-serve solutions, aligning with the busy lifestyles of modern consumers, who prioritise convenience and portion control.

Examining distribution channels reveals a diverse landscape encompassing both off-trade and on-trade avenues. Off-trade channels, led by supermarkets and hypermarkets, convenience stores, and specialist retailers, cater to different consumer needs, from budget-conscious shoppers to enthusiasts seeking specialty offerings. On-trade establishments, including coffee shops/cafés and restaurants/hotels, serve as hubs for diverse coffee experiences, social interaction, and culinary integration, catering to a range of occasions and preferences. Moreover, considerations of coffee nature and source further delineate market dynamics. While conventional coffee dominates the market due to its affordability and accessibility, a growing awareness of health and sustainability is driving interest in organic coffee, albeit within a niche segment commanding premium prices. Furthermore, the market exhibits a preference for Arabica beans, valued for their smoother flavour profile, albeit with a notable presence of Robusta beans, primarily utilised in instant coffee blends for their stronger taste and higher caffeine content. The Saudi Arabian coffee market boasts a diverse mix of established players and new entrants vying for market share. Local leaders like Almarai and Saudi Coffee Company dominate with extensive portfolios and distribution networks, while international chains such as Starbucks and Costa Coffee cater to a broad clientele. Emerging contenders like Buna Specialty Coffee and online platforms such as Jarrah Coffee are also making waves, alongside international franchises like Tim Hortons. Sustainability initiatives, exemplified by companies like The Coffee Spot, are gaining momentum, reflecting a growing consumer interest in ethical sourcing and eco-friendly practices.