Total volume sales within energy drinks continued to decline in 2020. In off-trade terms, the decrease is due to high unit prices in comparison with other soft drinks.
In an attempt to minimise the effects of new increases in excise tax and sugar tax in 2020, players in energy drinks began investing in product innovation aimed at introducing healthier products. For example, in March 2020, Arrow Juice Factory launched Mixa 5G, a natural energy drink that contains caffeine, guarana, ginseng, green tea, grape and grapefruit, but none of the taurine that is commonly found in other types of energy drinks.
In 2020, ALISR Global Co’s brand, Code Red, retained the lead position within energy drinks, mainly due to the company’s more organised operational approach to their brands and heavy investment in social media campaigns on Facebook and Instagram that mostly targeted young Saudi male consumers aged between 15–35, a key demographic for the category.
In 2021 and beyond, it is expected that more players within energy drinks will invest in new product innovation and development, offering more exotic flavours and healthier, reduced sugar options compared with previous varieties. This may go some way towards limiting the decline seen across the review period in this category, attracting consumers who are seeking healthier drinks to accompany their sports workouts in the wake of the COVID-19 pandemic.
The average unit price of energy drinks is expected to continue to rise over the next five years, as manufacturers grapple with rising production costs due to austerity measures and the increase in prices of raw materials and import fees. These extra costs are expected continue to be passed on to the consumer on top of mounting excise, sugar and value-added government-imposed taxes, which does not bode well for the category in the coming years.
Over the forecast period, it is expected that total volume sales of energy drinks will continue to decline as additional waves of COVID-19 emerge and government precautionary measures, including curfews and lockdowns, limit opportunities for consumption of products in this category. Consumers will continue to seek affordable options as they struggle with a higher cost of living, reductions in salaries and unemployment.
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