Food Market Potentials in Saudi Arabia

Food Market Potentials in Saudi Arabia

I was planning to go grocery shopping last weekend , so I went to the supermarket, grabbed a trolley, and began to venture. Moving from one aisle to another I browsed between racks which were piled with different items. Looking at some of the food products which I came across were Kellogg's corn flakes, Green Giant canned food, Philadelphia cream cheese, Activia diary products, and many other products seemed familiar. It was like if I were almost walking into a grocery store in Riyadh.

Also not far from where I live, just around the corner there's Uno Grill a famous restaurant for its menu, with almost the same dishes in their branch in Dammam, Saudi Arabia, TGIFriday's, Chili's and other famous fast food restaurant chains also available in Saudi Arabia. These are examples to show that the Saudi food market is open to foreign investment in different forms national and international trade either importing or through franchise.

The Saudi economy for the last decade has undergone major reforms.1 While witnessing an economic booming as a result of the increase of oil prices, and with the inflation that is affecting the global economy not to mention the overall increase of prices affecting the majority of consumers, the Saudi Riyal is pegged to U.S. Dollar at fixed exchange rate at $1 =  3.75 Riyals. This could be one of the reasons that wasn't exacerbated and kept steady yet growing annual demands.

Other means that have certainly aided in expanding the consumer base is the changing life style, the fast moving pace of our activities, the trend of moving to live in big metropolitan and urban cities migrating from rural areas. These factors played a major a role in altering our eating habits, although the awareness of the consumer created a flourishing market , and investors had to respond accordingly by supplying the need for the consumers constantly.

Bander Al-Aseeri

The interest in the Saudi food market is driven by a number of reasons. That's why it got the attention and attracted foreign investors who definitely saw the promising opportunities and sought to invest in this market. That was seen through The new encouraging regulations by the government on food trade and the reduction of taxes. However, the main reasons could be, first, the Saudi population is growing at 3% per year, which means demand will grow proportionately in addition huge supermarkets and malls that have food courts are being newly constructed. Second, the Saudi market imports $8 billion U.S. worth of food and beverages every year.2 Finally, the Saudi market is the biggest importer of food with a 66% of the annual Middle East imports. all the Middle East’s annual imports. 3

the Saudi food market posses huge investing potentials that is constantly growing. While the Saudi economy is not the biggest in Asia, It is considered one of the largest consuming market in the continent and the biggest in the middle east. The rate of consumption reaches it's peak during the pilgrimage (Hajj) season. These elements does show opportunities for a rising future of the Saudi food industry and the midst of the economic booming existing now that could definitely make it one of the growing markets in the world.

The Decline of Middle Class in Japan

Japan used to be called “the only successful communist country in the world.” That is because the majority of people were in the middle class and few people were extremely rich or poor. There was complete equality, which the Communism nations tried to achieve. In contrast, however, the gap between rich and poor is getting wider in Japan today, causing serious problems. Looking back, Japanese society has gone through three phases after World War Ⅱ: equal society, a decade of recession, and today’s increasingly unequal society.


In the post-war era, equality was at the core of Japanese society. Everyone earned roughly the same amount of money and their lifestyles were similar. People used an expression, ichioku-sohchu-ryu, to describe society, which meant, ‘100 million completely middle class’ or ‘a nation of middle-class people.’1 Equality mentioned here is not only in terms of income and wealth, but also in terms of opportunity. Everyone got equal educational and occupational opportunities. Everyone had opportunities to benefit from social welfare. Thus, Japanese equality was handed down over generations, enabling the nation to revive from the loss of the War.


In the 1990’s, however, Japan suffered from a serious recession and could not avoid changing its social systems. During this recession, companies were forced to cut costs for employees and started to hire temporary instead of full-time workers so that they could save money. This trend led to the creation of a lot of young people known as freeters, who did not have regular work. As for the government, it tried to reform the economy to get over the economic crisis and ended up widening inequality.2 As a consequence, Japanese society changed its way into a increasingly unequal society.


Nowadays, Japanese society is accelerating the speed of division into haves and ‘have-nots’, causing serious problems. The situation is especially hard for freeters. Some of them cannot even afford to rent a room, so they use round-the-clock cafes or McDonald’s restaurants to spend nights. They are so-called “net café refugees,” a new type of working poor. This trend is becoming more and more common because of the economic crisis, as well as the decreasing value young people put on the adjustment to Japan’s traditional work ethic.3 It is estimated that this kind of working poor will expand in the future.


As society changed in Japan, the gap between rich and poor increased and the social situation worsened. Japan once boasted of its complete equality within the nation, but today people fear increasing inequality. Rich people make a further fortune while poor people have difficulty in making ends meet. This trend led to change the lifestyles of freeters and may have a negative effect on the entire Japanese economy in the near future.

Hiroaki Minami

1 http://www.usatoday.com/money/world/2006-07-23-japan-usat_x.htm
2 http://www.breitbart.com/article.php?id=070815123710.uge33ya9&show_article=1
3 http://www.iht.com/articles/ap/2007/08/28/asia/AS-GEN-Japan-Net-Cafe-Homeless.php