The GCC dairy market size reflects strong structural demand supported by food security initiatives and expanding institutional consumption. Across the Gulf Cooperation Council, dairy production continues to modernize as governments invest in domestic capacity and supply chain resilience. Moreover, rising procurement from airlines, hospitality chains, and hospital catering services is strengthening bulk dairy transactions. As a result, producers are expanding cold storage networks and improving quality assurance systems.
The GCC dairy market size was valued at USD 11.64 Billion in 2025. It is projected to grow at a CAGR of 5.30 percent during 2026 to 2035, reaching nearly USD 19.51 Billion by 2035. Additionally, consumer preference for nutritious and protein rich diets is reshaping product innovation across fluid milk and value added categories. Therefore, producers are introducing fortified milk, flavored variants, and high protein yoghurt to maintain competitiveness.
Key Growth Drivers
Institutional demand remains a primary growth catalyst. Airlines and hotel groups require consistent and high volume dairy supply, which encourages long term contracts with regional manufacturers. Meanwhile, healthcare catering services emphasize strict hygiene standards, prompting companies to adopt automated processing technologies.
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Government policy also supports expansion. Saudi Arabia Vision 2030 places significant focus on agricultural modernization and livestock efficiency. Consequently, dairy farms are integrating climate controlled housing and advanced feed management systems. Saudi agricultural GDP reached around SAR 114 billion in 2024, demonstrating the sector economic importance.
In the UAE, AgriTech initiatives are improving cattle feed production. Hydroponic systems have reduced water usage by nearly 60 percent, according to MOCCAE data. This advancement lowers production costs and enhances sustainability. Moreover, several GCC states have relaxed import duties on dairy technology, which encourages international partnerships.
Product Segment Analysis
Fluid milk and UHT milk hold a significant revenue share due to daily consumption patterns across households. However, flavored milk continues gaining attention among younger consumers seeking variety. Cream and butter maintain stable demand within food service and bakery operations.
Milk powders, including skimmed milk powder and whole milk powder, support food manufacturing applications. Additionally, whey protein powder and concentrate are benefiting from a rising fitness culture across urban centers. Lactose demand is expanding in pharmaceutical and infant nutrition sectors.
Cheese and yoghurt represent fast growing categories. Regional cuisine widely incorporates these products, which ensures steady retail movement. Ice cream consumption increases during warmer months; however, premiumization strategies help sustain year round sales.
Regional Outlook
Saudi Arabia leads overall dairy production within the GCC due to integrated farming models and strong capital investment. The country large scale operations enable efficient distribution across domestic and export markets.
The UAE demonstrates innovation driven expansion. Advanced logistics infrastructure and digital inventory systems support smooth retail supply. Meanwhile, Oman and Kuwait present increasing consumption demand, which creates cross border trade opportunities.
Qatar has strengthened domestic dairy capabilities in recent years. Consequently, internal production now meets a larger share of local requirements. Across the region, coordinated food security policies continue to stabilize supply chains and reduce external dependency.
Investment and Strategic Developments
Investment activity remains active across the GCC. In January 2025, Almarai announced a USD 1.8 billion expansion strategy targeting regional demand growth in Oman and Kuwait. Therefore, production capacity and distribution networks are expected to expand further.
Automation and digital herd monitoring systems are improving farm productivity. Meanwhile, sustainability initiatives encourage renewable energy usage and responsible water management practices within dairy facilities. These measures enhance operational efficiency while aligning with environmental targets.
Export diversification also shapes future growth. Producers are exploring neighboring Middle Eastern and African markets to expand revenue streams. Moreover, regional collaboration supports knowledge exchange and technological advancement.
Competitive Landscape
Almarai Company operates one of the largest integrated dairy production systems in the region, supported by extensive distribution capabilities.
National Agricultural Development Company (NADEC) focuses on agricultural investment and strengthens dairy output through modern farming practices.
Al Rawabi Dairy Company is based in the UAE and emphasizes product innovation along with quality control standards.
Nestlé S.A leverages its global expertise to support value added dairy processing and regional market development.
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