GCC Dairy Market Size, Share, Trends & Report by 2032 -

GCC Dairy Market Outlook

According to a report by Expert Market Research (EMR), the GCC dairy market size has seen steady growth, reaching significant value of USD 10.49 billion in 2023. Supported by increasing demand for dairy products across multiple categories and the region’s focus on food security and local dairy production, the market is expected to continue growing at a healthy rate. Projections indicate that the market will experience a compound annual growth rate CAGR of 5.3% in the forecast period of 2024-2032. By 2032, the market is projected to reach an estimated value of USD 16.70 billion.

The dairy industry in the Gulf Cooperation Council (GCC) countries—comprising Saudi Arabia, the UAE, Kuwait, Oman, Qatar, and Bahrain—plays an essential role in fulfilling the nutritional needs of the region. Dairy products such as milk, cheese, yogurt, and butter are widely consumed, with milk being a staple in the daily diet. The industry has grown rapidly due to a combination of government initiatives aimed at increasing food production, a burgeoning population, and rising disposable incomes. Moreover, innovations in the dairy sector, including lactose-free and fortified dairy products, are propelling market growth.

The growth of the GCC dairy market is also supported by robust investments in modern dairy farming techniques and processing technologies. This allows for the production of high-quality dairy products that meet the growing demand for fresh, nutritious, and locally sourced goods.

Key Market Drivers

One of the primary drivers of the GCC dairy market is the rising population, especially in Saudi Arabia and the UAE, the largest markets in the region. With rapid urbanization and an increasing number of expatriates contributing to the population growth, the demand for dairy products has surged. The growing number of young consumers with changing dietary preferences has also led to greater consumption of dairy products like yogurt, cheese, and flavored milk.

Furthermore, the dairy industry benefits from the GCC region’s rising health consciousness among consumers. People are becoming more aware of the nutritional value of dairy products, particularly their high protein and calcium content, which is essential for bone health. This shift in consumer behavior has led to increased demand for healthier dairy options, such as low-fat and fortified milk products, which are perceived as beneficial for long-term health and wellness.

The rising income levels across the GCC have also facilitated the market’s expansion. Consumers in the region have greater purchasing power, leading to increased spending on premium dairy products. This is particularly evident in the cheese segment, where demand for specialty and imported cheeses is rising. The introduction of new dairy products with innovative flavors and added health benefits is further driving market growth, as consumers are willing to pay a premium for high-quality, unique offerings.

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Innovation and Product Development

To counter the challenges and maintain a competitive edge, many dairy producers in the GCC dairy market are focusing on innovation and product development. The rising health-consciousness among consumers has led to an increased demand for functional dairy products with added health benefits. Producers are introducing fortified milk products enriched with vitamins, minerals, and probiotics. Low-fat, lactose-free, and organic dairy options are also gaining traction, as consumers seek healthier alternatives without compromising on taste.

Moreover, there is a growing trend toward dairy products tailored to specific dietary needs. This includes products designed for consumers who are lactose-intolerant, as well as dairy products that support weight management or are enriched with protein to appeal to fitness enthusiasts. The introduction of such niche products helps manufacturers tap into new consumer segments and boost profitability.

In the yogurt and cheese segments, innovations in flavors and textures are attracting consumers who seek variety in their diets. Flavored yogurts and artisanal cheeses are becoming increasingly popular among urban consumers, particularly those who prefer convenient yet nutritious snacking options. The focus on high-quality ingredients and locally produced dairy products is resonating with consumers who prioritize sustainability and local sourcing in their purchasing decisions.

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GCC Dairy Market Segmentation

The GCC dairy market can be divided based on by flavour, by category, by product type, end-use, sales channel and region.

Breakup by Product

Fluid Milk
UHT Milk
Flavoured Milk
Cream
Butter
Anhydrous Milk Fat (AMF)
Skimmed Milk Powder (SMP)
Whole Milk Powder (WMP)
Whey Protein(Powder and Concentrate)
Lactose
Cheese
Yoghurt
Ice-cream
Others

Market Breakup by Region

Saudi Arabia
United Arab Emirates
Kuwait
Oman
Qatar
Bahrain

Competitive Landscape

Some of the major key players explored in the report by Expert Market Research are as follows:

Almarai Company
National Agricultural Development Company (NADEC)
Al Rawabi Dairy Company
Al Ain Dairy
Saudia Dairy & Foodstuff Company(SADAFCO)
Nestlé S.A.
Fonterra Co-operative Group Limited
Arla Foods amba
Lactalis Group
Others

Challenges and Market Barriers

Despite the positive outlook, the GCC dairy market faces several challenges. The arid climate of the region presents a significant obstacle to dairy farming, as water scarcity and high temperatures make it difficult to sustain large-scale agricultural activities. Dairy farms in the GCC are highly dependent on imported feed, which increases operational costs and limits profitability. The cost of energy, required for cooling and storage of dairy products in such a hot climate, also contributes to the high production costs.

Moreover, the rising competition from plant-based alternatives is a potential challenge to the growth of the traditional dairy market. The increasing trend toward veganism and the growing awareness of lactose intolerance among consumers have led to a surge in demand for plant-based milk and dairy alternatives. Manufacturers are introducing a variety of non-dairy options such as almond milk, soy milk, and oat milk, which are gaining popularity among health-conscious consumers. While this presents a new growth opportunity for dairy producers who diversify into plant-based products, it also adds pressure on traditional dairy segments.

The reliance on imported raw materials and ingredients also presents a vulnerability for the GCC dairy market, particularly in times of global supply chain disruptions. Import costs can fluctuate due to geopolitical issues or changes in trade agreements, which may affect the availability and pricing of dairy products in the region.

Opportunities for Growth

The GCC dairy market is expected to witness significant growth opportunities in the coming years, particularly in the premium and value-added product segments. The expansion of e-commerce and online grocery delivery platforms in the region has opened up new distribution channels for dairy products. Consumers are increasingly turning to online platforms for their grocery needs, and this trend is expected to accelerate, providing dairy producers with opportunities to reach a wider customer base.

Additionally, the region’s thriving hospitality and tourism industry is a major consumer of dairy products, with hotels, restaurants, and cafes relying on high-quality dairy ingredients for their menus. As tourism recovers and expands in the post-pandemic period, the demand for dairy products in the foodservice sector is expected to rise.

Export opportunities also present a growth avenue for GCC dairy producers. With improvements in production capacity and quality standards, GCC countries are well-positioned to export dairy products to neighboring countries and beyond. The Middle East and North Africa (MENA) region, as well as Southeast Asia, represent potential export markets due to their proximity and high demand for dairy products.

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