Saudi Arabia Coffee Market : Forecast 2025–2033: Trends, Segmentation, and Strategic Insights

Saudi Arabia Coffee Market Forecast (2025-2033) – Growth, Trends, and Opportunities

1. Market Overview: Saudi Arabia Coffee Market Size and Forecast

The Saudi Arabian coffee market is valued at USD 1.38 billion in 2024 and is projected to grow to USD 2.27 billion by 2033, reflecting a CAGR of 5.67% over the forecast period. This growth is driven by a combination of cultural traditions, the expansion of the café culture, and government initiatives under Saudi Vision 2030. Coffee holds both cultural and social significance in the Kingdom, with the consumption of traditional “Gahwa” playing a central role in social interactions and gatherings.

Question for exploration:

• What are the key factors driving the increased demand for coffee in Saudi Arabia, and how do these align with the government’s Vision 2030?

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2. Saudi Arabia Coffee Market Outlook

Coffee has been ingrained in Saudi Arabia’s cultural fabric for centuries, and its consumption extends far beyond a mere beverage—it’s a symbol of hospitality, respect, and tradition. The local version, “Gahwa,” is often served during gatherings with dates, and it features lightly roasted beans with cardamom and other spices.

2.1 Blending Tradition with Modernity

While traditional Saudi coffee remains a staple at social events, modern coffee culture is flourishing, especially among younger generations. This duality—maintaining traditional practices while embracing contemporary coffee experiences—is leading to the growth of specialty coffee shops, both local and international, within Saudi Arabia’s urban centers.

Question for exploration:

• How does the coexistence of traditional “Gahwa” and modern coffee trends influence consumer preferences and market dynamics in Saudi Arabia?

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3. Drivers of Growth in the Saudi Arabia Coffee Market

3.1 Cultural Significance and Traditional Practices

Coffee in Saudi Arabia is more than a drink; it’s a social ritual. “Gahwa,” the traditional Saudi coffee, is served as a sign of hospitality during important cultural events and family gatherings. Government initiatives to preserve and celebrate coffee traditions, such as the Saudi Coffee Initiative under Vision 2030, ensure the continuation of this heritage, which also contributes to the rising demand.

Question for exploration:

• What role do government initiatives play in ensuring the preservation of Saudi Arabia’s coffee culture, and how do these influence both domestic consumption and international recognition?

3.2 Growing Café Culture Among the Youth

The younger population in Saudi Arabia, primarily millennials and Gen Z, is playing a key role in the growing popularity of specialty coffee. With more disposable income and a greater interest in global coffee trends, young Saudis are increasingly frequenting coffee shops that offer espresso-based drinks, cold brews, and fusion coffee experiences that combine traditional elements with modern influences.

Question for exploration:

• How is the younger demographic’s increasing preference for specialty coffee reshaping the market dynamics, and how are coffee chains adapting to this shift?

3.3 Government Support and Vision 2030 Initiatives

The Saudi government has invested in various programs aimed at developing the national coffee industry. The Saudi Coffee Initiative seeks to enhance local coffee farming, focusing on regions like Jazan. Additionally, investments in infrastructure, such as coffee processing plants and training academies for baristas, are set to help establish Saudi Arabia as a global coffee producer and exporter. The government also aims to significantly increase annual coffee production from 300 tonnes to 2,500 tonnes by 2030.

Question for exploration:

• How do government-backed initiatives such as the Saudi Coffee Initiative contribute to creating a sustainable coffee supply chain in Saudi Arabia, and what impact will this have on local farmers and international markets?

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4. Saudi Arabia Coffee Market Segmentation

The Saudi coffee market can be segmented by coffee type and distribution channels. Each segment offers unique growth opportunities and is influenced by various consumer preferences and purchasing behaviors.

4.1 Coffee Type Segmentation

1. Instant Coffee
   • Instant coffee is popular in Saudi Arabia due to its convenience, quick preparation, and affordability. The demand for instant coffee is expected to continue to rise as busy lifestyles drive consumers to seek easy-to-prepare coffee options.
2. Ground Coffee
   • Ground coffee is favored by consumers who prefer a richer and more flavorful coffee experience. This segment is seeing a steady increase, particularly among coffee enthusiasts who enjoy brewing their own coffee at home.
3. Whole Grain Coffee
   • Whole grain coffee offers a fresher and more aromatic experience for consumers who value the authenticity of freshly ground beans. This segment is expected to grow as the demand for premium and specialty coffees increases.
4. Others
   • This category includes coffee blends, flavored coffees, and other niche products that cater to specific taste preferences.

Question for exploration:

• How are consumer preferences evolving between instant coffee, ground coffee, and whole grain coffee in Saudi Arabia, and what does this mean for product development?

4.2 Distribution Channel Segmentation

1. Supermarkets and Hypermarkets
   • Supermarkets and hypermarkets remain key distribution channels for coffee in Saudi Arabia, offering a wide variety of products at competitive prices. These channels benefit from consumer familiarity and convenience.
2. Convenience Stores
   • Convenience stores are increasingly becoming popular for coffee purchases, particularly for on-the-go consumers. The demand for ready-to-drink coffee beverages is growing, driven by busy lifestyles and the increasing number of convenience store chains.
3. Online Retail
   • Online retail is a rapidly growing distribution channel in Saudi Arabia, driven by the rise of e-commerce and consumer preference for home delivery. Major platforms and coffee brands are capitalizing on this trend to reach a wider audience.
4. Others
   • Other channels include specialty coffee shops, direct-to-consumer sales, and coffee kiosk operations.

Question for exploration:

• How do consumer shopping behaviors in Saudi Arabia vary across these distribution channels, and what role does e-commerce play in shaping the future of coffee sales?

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5. Competitive Landscape – Key Players in the Saudi Arabia Coffee Market

The Saudi coffee market is competitive, with both local and international brands vying for market share. Companies are focusing on innovation, sustainability, and increasing their product offerings to meet the growing demand for coffee.

5.1 Key Players and Company Profiles

1. Saudi Coffee Company
   • As a state-backed entity, the Saudi Coffee Company plays a pivotal role in boosting domestic coffee production. It is working on expanding local coffee farming and processing while also promoting its in-house coffee brand, Jazean.
2. Barns Coffee
   • One of the leading coffee chains in Saudi Arabia, Barns Coffee operates over 500 stores, contributing significantly to the country’s café culture.
3. Starbucks, Costa Coffee, Tim Hortons
   • International coffee giants like Starbucks, Costa Coffee, and Tim Hortons are expanding rapidly in Saudi Arabia, capitalizing on the burgeoning demand for specialty coffee.
4. Nestlé SA
   • Nestlé is a major player in the instant coffee segment, offering products like Nescafé, which is a household name in Saudi Arabia.
5. The J. M. Smucker Company
   • Known for its Dunkin’ Donuts and Folgers brands, Smucker has a presence in the Saudi coffee market, especially in the instant coffee and ground coffee segments.

Question for exploration:

• What strategies are international coffee brands employing to increase their market share in Saudi Arabia, and how do local players respond to these competitive pressures?

5.2 Recent Developments in the Saudi Coffee Industry

1. Saudi Coffee Company Expansion
   • The Saudi Coffee Company has made significant strides by opening new coffee processing plants in Jazan and forging partnerships with companies like Alghanim Industries to enhance the international profile of Saudi coffee.
2. Strategic Partnerships and Product Launches
   • Alghanim Industries has partnered with the Saudi Coffee Company to promote the Jazean brand, while Gulf Trading Company introduced the “Al Rifai” brand, expanding Saudi Arabia’s coffee offerings.

Question for exploration:

• How do strategic partnerships and new product launches contribute to the growth of Saudi Arabia’s coffee industry and its global recognition?

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6. Conclusion: The Future of Saudi Arabia’s Coffee Market

The Saudi Arabia coffee market is on an upward trajectory, driven by a combination of cultural significance, a growing café culture among the youth, and government-backed initiatives. With substantial investments in coffee production and processing, the Kingdom is set to become a key player in the global coffee industry. As the market continues to evolve, both local and international brands must adapt to changing consumer preferences and capitalize on emerging trends to ensure continued success.