Saudi Arabia Soft Drinks Market Overview
The increasing popularity of healthier variants of soft drinks amongst the consumers including drinks such as kombucha and other types of functional teas which is raising the need amongst the manufacturers to produce different types of beverages, coupled with the opportunities generated by the availability of various flexible packaging alternatives including bags or pouches and the increasing economic and social transformation in the country which is promoting the number of quick service restaurants in tandem with the gradually changing dining-out culture are some of the factors anticipated to promote towards the growth of the Saudi Arabia soft drinks market. Numerous manufacturers in the beverage industry are increasingly focusing on developing healthier variants of soft drinks by differentiation in the existing products as well developing innovative beverages which are low in calories and align with the active lifestyle of consumers thereby promoting good health. The Saudi Arabia soft drinks market is slated to grow with the highest CAGR of 8.56% over the forecast period 2020-2027. Presence of a hot climate in the country along with the dynamic change in consumer preferences for beverages are some of the factors anticipated to promote towards the growth of the market. Further, the Saudi Arabia soft drinks market accounted for USD 4845.3 million in the year 2018 and is predicted to reach USD 9984.8 million in the year 2027. Moreover, the market is anticipated to gain an incremental $ opportunity of USD 835.6 million in the year 2027 as compared to the previous year.
Saudi Arabia Soft Drinks Market Drivers and Challenges
According to the statistical report Global Status Report on Alcohol and Health 2018 by the World Health Organization, the recorded alcohol consumption per capita aged 15+ in Saudi Arabia during the period 1961-2016 is almost zero. Additionally, the alcohol per capita (15+) consumption recorded in the year 2016 was 0.2 litres of pure alcohol.
The Saudi Arabia soft drinks market is thriving on the back of the prohibition on the consumption, import, brewing and sale of alcoholic drinks in the nation along with the presence of an arid climate in the country, which is raising the popularity for soft drinks including carbonated beverages and other ready to drink teas and coffees. The ban on alcoholic beverages in the country can be attributed to the conservative nature of the Islamic nation which promotes strict measures to follow Islamic laws. As such, the competition from alcoholic beverages is the minimum in comparison to other nations of the world, thereby providing a greater opportunity for players to international investments in the soft drink beverage industry.
Additionally, the hot and humid climate in the nation raises the need amongst the people to rehydrate regularly over the time frame, which is also contributing to the rising demand for soft drink beverages. Moreover, increasing young population in the country and the rising health consciousness among the consumers are some of the factors anticipated to drive the growth of the Saudi Arabia soft drinks market. According to the statistics by the World Bank, the population in Saudi Arabia grew from 32.42 million in the year 2018 to 33.69 million in the year 2018, thereby registering an increase of 1.27 million in a span of 2 years.
Increase in the excise taxes on all types of sweetened beverages in the nation to limit the consumption of unhealthy beverages especially by the young population in the country along with the impact of the COVID-19 pandemic which hampers the manufacturers of soft drinks in sourcing their raw materials used in the preparation of soft drinks are some of the factors anticipated to impact negatively towards the growth of the Saudi Arabia soft drinks market.
Top Featured Competitive Landscape
The soft drinks market in Saudi Arabia is primarily driven by the key players, namely The Coca-Cola Company and PepsiCo, Inc. Apparently, the market is highly fragmented with several local players who are serving soft drinks in different packaging forms to meet the customer demand.