While performances in real value terms were negatively impacted by the high inflation putting pressure on household budgets in some countries, off-trade volume sales of soft drinks continued to record positive growth in Middle East and Africa in 2023. Rising populations, hot climates and further development of the retailing infrastructure will help continue driving regional growth, while Saudi Arabia’s Vision 2030 strategy should also significantly boost the Kingdom’s visitor numbers.
This report comes in PPT.
Nigeria continues to account for around a third of regional off-trade volume sales in the Middle East and Africa soft drinks market, with bottled water, in turn, dominating sales in the Nigeria. The lack of access to safe drinking water continues to see many Nigerians buying packaged water, often in pouches or sachets, the cheapest formats.
After the most recent increase in the Health Promotion Levy (sugar tax) from ZAR0.221 to ZAR0.231 per gram, the South African authorities announced a postponement of the next rise until 2025. While this was done to make life easier for industry players and consumers already struggling in the face of high inflation and rising costs/prices, the government is believed to be considering reducing the current limit at which the tax kicks in from 4g of sugar per 100ml.
While the e-commerce share continued to grow in 2023, it still remained below 2% of overall off-trade volume sales of soft drinks in Middle East and Africa. Small local grocers account for more than two thirds of sales, and as much as 95% in Nigeria, while modern grocery retailers make up less than a quarter of retail distribution in the region. Direct selling accounts for 19% of bottled water sales in Saudi Arabia.
In addition to Saudi Arabia looking to attract over 100 million visitors annually as part of its Vision 2030 strategy, in line with the health and wellness trend, a growing number of healthier variants are expected, such as reduced or no sugar, lower calories, containing natural flavours and ingredients, and organic options. These new variants are expected from both existing players and also new entrants and should help bring renewed energy to the soft drinks market.
This is the aggregation of the following categories; Carbonates, Fruit/vegetable juice, Bottled water, Functional drinks, Concentrates, RTD tea, RTD coffee and Asian speciality drinks.
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