Report Overview

Spurring demand for food products with a prolonged shelf life, decreasing logistics and storage costs, rapid urbanization, favorable demographics, and growing technology advancements are projected to propel the expansion of Saudi Arabia UHT Milk Market size at a steady growth rate during forecast period 2022 and 2028.

Saudi Arabia UHT Milk Market - Industry Trends & Forecast Report, 2028

Saudi Arabia UHT (Ultra-High Temperature) milk market size is expected to expand at a steady CAGR of 8.2% during the forecast period between 2022 and 2028. Major growth factors of Saudi Arabia UHT milk market include an increased emphasis on longer shelf life of food and beverage products, reduced logistics and storage costs, and improved technology. UHT milk can also be maintained at ambient temperature for at least six months without refrigeration. This enables the shipment of UHT milk to areas without sufficient cold chain facilities. In addition, UHT milk can also be served without being heated or boiled, which is convenient for working individuals due to hectic schedules coupled with growing milk benefits awareness as it nutrient-rich product. As UHT is popular owing to its ease of storage and use, and nutritional value, Saudi Arabia UHT milk market is expected to grow during the period in analysis.

Saudi Arabia UHT Milk Market - Overview

UHT milk or Ultra High Temperature milk is sterilized at an extremely high temperature and maintaining it there for few seconds before quickly cooling to room temperature. Therefore, this process eliminates almost all the potential pathogens present in milk. Consumers prefer UHT milk, because of its extended shelf life. UHT milk also requires less processing time and contains high nutritional value. Recent COVID-19 pandemic created a unique growth opportunity for UHT milk market participants to develop new UHT-based health drinks. The pandemic situation also boosted the demand for UHT milk and other shelf-stable products. Therefore, window of opportunity for companies was created to develop new recipes and products to meet the consumer’s growing demand for many food products, including UHT milk. Furthermore, consumers prefer UHT milk and dairy products to improve their immunity as there are several health benefits associated with UHT milk, including its ability to improve bone health and reduce the risk of certain cancers.

Saudi Arabia UHT Milk Market

Growth Drivers

Surging demand for extended shelf-life of food and beverages

A spurring demand for food products with prolonged shelf life, an increased consumption of milk and dairy products, and an increase in the application of UHT technology in new product development are expected to boost the growth of Saudi Arabia UHT milk market. Ongoing technological and scientific advancements are contributing to the expansion of food and beverage shelf life, hence favoring the adoption of UHT processing techniques. Owing to the perishable nature of milk and curd, among other dairy products, UHT processing is fast gaining popularity in the dairy business.

Growing adoption of innovative technologies

COVID-19 pandemic increased demand for bacteria- and microorganism-free food, contributing to high adoption of UHT technology and boosting market growth. In accordance with this, the incorporation of innovative technologies, such as artificial intelligence (AI), into UHT processing technology for better productivity is expected to be a major driving force for Saudi Arabia UHT market during the forecast period.

Restraints

High initial investments

The food and beverages sector necessitates a significant initial investment in the purchase and installation of UHT processing equipment, as well as maintenance cost, which is an expensive addition that impacts the operating profit margins of food and beverage processors and manufacturers. Instead of installing UHT processing equipment, manufacturers seek more cost-effective alternatives. Compared to UHT facilities, processing equipment, such as pasteurizer units, require less initial investment and save on annual maintenance costs. As specialized equipment is necessary for treating the target products as well as making multiple packages utilizing diverse raw materials, the initial capital investment for UHT processing equipment is expensive. As a result, the mix of these problems prevents manufacturers from entering the UHT processing market, functioning as a restraint for the overall market growth.

Impact of COVID–19 on Saudi Arabia UHT Milk Market

COVID–19 pandemic adversely affected Saudi Arabia UHT milk market due to decrease in demand for UHT milk as consumers have become more concerned about the safety of milk products. In addition, the closure of schools and businesses led to a decline in sales of UHT milk as many consumers are no longer buying milk for their daily needs. As a result of the decrease in demand, prices of UHT milk declined, and many companies have been forced to reduce production. A decrease in demand for UHT milk also due to consumers opting for alternative products such as fresh milk and plant-based milk. This resulted in a decrease in sales for UHT milk manufacturers and has forced some companies to exit the market. However, pandemic increased online grocery shopping, which is expected to drive the revenue growth in the Saudi Arabia UHT milk market. In addition, COVID-19 pandemic also increased demand for bacteria- and microorganism-free food, contributing to high adoption of UHT technology and boosting market growth. As a result, the adoption of digitalized techniques, such as artificial intelligence (AI), into UHT processing technology for better productivity is expected to be a major driving force in the market over the forecast period.

Saudi Arabia UHT Milk Market

Segmental Coverage

Saudi Arabia UHT Milk Market - By Product Type

Based on product type, Saudi Arabia UHT milk market is divided into Full cream UHT Milk, Skimmed UHT Milk, and Semi-Skimmed UHT Milk segments. The skimmed UHT milk segment held the highest share in the market in 2021 due to its flavor and texture benefits. Furthermore, the high nutritional value such as protein and calcium content in skimmed milk products is expected to propel the Saudi Arabia UHT milk market forward.

Saudi Arabia UHT Milk Market - By Distribution Channel

Based on distribution channel, Saudi Arabia UHT Milk Market is bifurcated into B2B (Business to Business) and B2C (Business to Consumer) segments. The B2C segment is further divided into specialty stores, modern trade, convenience stores, departmental stores and online. The B2C segment dominates the market, as retailers totally depending on importers. Majority of supermarkets offer direct purchasing capabilities. These same supermarkets import a large amount of dry, refrigerated, and dairy products. Furthermore, the regional milk market is becoming dominated by a small number of large enterprises, making entry into the market extremely challenging, particularly in terms of business expansion.

Saudi Arabia UHT Milk Market - By Source

On basis of source, Saudi Arabia UHT milk market is bifurcated into Animal-based and Plant-based. The animal-based segment is divided into cow milk, goat milk, buffalo milk, camel milk, and others. Similarly, the plant-based segment is subdivided into soy, coconut, almond, and others.

Saudi Arabia UHT Milk Market - By Application

On basis of application, Saudi Arabia UHT milk market is divided into dairy products, bakery and confectionery, milk-based beverages, and other segments.

Competitive Landscape

Saudi Arabia UHT milk market is fiercely competitive with Saudia Dairy & Foodstuff Company (SADAFCO), NAJRAN DAIRY Company, National Agricultural Development Company (NADEC), Dana Dairy, and United National Dairy Company. To further enhance their market share, these players are primarily focused on the development of innovative and efficient products, new product releases, market initiatives, mergers and acquisitions, and other collaborative activities.

Scope of the Report

By Product

• Full cream UHT milk

• Skimmed UHT milk

• Semi-skimmed UHT milk

By Distribution Channel

• B2B

• B2C

By Source

• Animal Based

1. Cow Milk

2. Goat Milk

3. Buffalo Milk

4. Camel Milk

5. Others

• Plant Based

1. Soy

2. Coconut

3. Almond

4. Others

By Application

• Dairy Products

• Bakery and Confectionery

• Milk-based Beverages

• Others