Saudi Arabia invests $320m to boost domestic coffee production

Coffee consumption in Saudi Arabia grew by approximately four percent a year between 2016 and 2021 | Photo credit: Sliman

Saudi Arabia’s Public Investment Fund (PIF) has launched the Saudi Coffee Company, a government-backed organisation tasked with growing the Kingdom’s coffee production. 
 
Aligned with the sovereign wealth fund’s wider strategy to enable 13 promising sectors, including food and agriculture, to diversify sources of income for the local economy, the PIF said The Saudi Coffee Company will have a strong focus on achieving sustainability across the production, distribution and marketing across the coffee supply chain. It will also work to develop Saudi Arabia’s capabilities to export high-quality coffee beans to markets around the world. 
 
PFI data indicates coffee consumption in Saudi Arabia grew by approximately four percent a year between 2016 and 2021 and is forecast to increase by a further five percent annually to 2026, reaching an expected annual consumption of 28,700 tons. 
 
The SAR 1.2bn investment over the next ten years intends to build upon an increasing domestic appetite for coffee, boosting Saudi Arabia’s production from 300 tons per year to 2,500 tons per year. 
 
The production of Saudi Khawlani coffee beans comes from the regions of Jazan, Al Baha, and Aseer where there are more than 2,500 coffee plantations with a combined total of approximately 400,000 coffee trees. 
 
Currently, most Saudi-grown coffee is exported to Middle Eastern countries, with Yemen accounting for nearly a third of exports according to trade data platform Trend Economy. Total Saudi coffee exports were valued at around $10.6m in 2020.
 
Café culture has also been on the ascendance in Saudi Arabia in recent years, with World Coffee Portal forecasting the country’s total branded café market will exceed 2,600 outlets by 2023.
 
The PIF also plans to establish dedicated academies across the country, where Saudi Arabian entrepreneurs, coffee plantation owners and farmers can receive the training needed to help them start their own coffee businesses. 
 
Saudi Arabia’s Ministry of Culture has designated 2022 as “The Year of Saudi Coffee”. In November 2021, the Saudi government entered a 15-year agreement to build a coffee development city in the Baha region, which will include coffee tree planting as well as processing, packaging and roasting facilities.