Almarai working with McKinsey and SAP on digital transformation

23 November 2020 Consultancy-me.com

Saudi Arabian dairy company Almarai has embarked on the next phase of its digital transformation strategy, working together with consultants and technologists from McKinsey & Company and SAP on driving its realisation.

Founded in 1977 by the two Irish brothers in collaboration with Prince Sultan bin Mohammed bin Saud Al-Kabir (who is currently the chairman of the board), today Almarai is one of the globe’s largest dairy companies. With the help of its more than 200,000 cows dispersed across different parts of the world, Almarai provides dairy products including milk, cheese, yoghurts, milkshakes to tens of millions of consumers in the Middle East every day.

Facing a strong market outlook, Almarai is gearing itself up for yet another period of growth. For starters, the number of consumers in the Middle East turning to dairy products is one the rise, driven by improved availability and rising health consciousness (which is lifting demand for low-fat, lactose-free, and calcium-rich products), but also by average per capita income growth.

Almarai is accelerating its digital transformation agenda

Moreover, factors such as increasing government-run health and wellness campaigns, designed to combat obesity and related problems (diabetes, high blood pressure, heart disease, and high cholesterol), are encouraging consumers to purchase healthier products, with a string of dairy products one of the beneficiaries. 

According to one estimate, the Middle East dairy market is forecasted to grow at a CAGR of 6% in the next five years. Well positioned to capitalise on the opportunity – Brand Finance recently named Almarai the seventh most valuable dairy brand worldwide and the leader in the region – the Riyadh-based company is taken steps to prepare for the prospect. 

Majed Nofal, CEO of Almarai, said, “In response to increased demand in the Middle East, we needed to accelerate our growth plans. Our aim is to deliver high-quality and nutritious food and beverages to our consumers at the right time to enrich our consumers’ lives.”

Digital is a central part of Almarai’s plans, with the firm eyeing a suite of intelligent technologies to optimise its operations, supply chains and customer processes. Experts from McKinsey & Company are advising the firm’s executive team on digital strategy and the roadmap. The consulting firm is also helping Almarai exploring emerging technologies such as robotics, chatbots, and cloud-driven innovations. 

One major pillar of its digital agenda is a large-scale ERP upgrade aimed at “optimising our resources, reduce waste and drive a leaner operation,” said Nofal. Building on its two decades’ partnership with SAP, Almarai is deploying the SAP S/4HANA system across all lines of business, which will run on a HANA Enterprise Cloud platform that is managed by SAP. Technology experts from SAP are supporting the design, build and implementation phase. 

Some of the more well-known brands of Almarai include namesake Almarai, L’usine, 7DAYS, and Alyoum.