Fortified/Functional Beverages in Saudi Arabia

PROSPECTS

Tax hike negatively impacts FF energy drinks

FF energy drinks characterised the category in 2018 despite a strong trend towards products with natural ingredients. However, the category continues to be hampered by the imposition of a 100% excise tax on retail prices and consumers’ perception of the product as unhealthy.

Energy drinks remains the most popular category in FF beverages

Energy drinks continue to appeal to local consumers for their taste and energy-boosting characteristics. Moreover, consumers tend to readily appreciate their benefits, even when they are only indirectly health related or where marketing claims such as general wellbeing are vague.

Strong growth of FF juice drinks (up to 24% juice)

FF juice drinks (up to 24% juice) recorded the strongest current retail value growth in 2018 as local consumers are embracing products that satiate their desire for sweetness. Moreover, consumers are also increasingly demanding juice that has added functionality.

COMPETITIVE LANDSCAPE

FF energy drinks players continue to lead FF beverages

Abuljadayel Beverages Industries Llc, ALJSR Global and Ahmed Mohammed Abdul Wahab Naghi Establishment continued to lead fortified/functional beverages in 2018 and were responsible for over half the category’s value sales. These companies benefit from their strength in FF energy drinks, the largest category within fortified/functional beverages.

Strong presence of domestic players in FF fruit/vegetable juice

Both international and local brands were present in FF beverages in 2018. While the international names such as Power Horse, Tang and Red Bull gained consumer confidence by adapting to local culture and tastes, and by offering high-quality products, local players were also present.

Focus on new product development

Towards the end of the review period, the flavour offerings within FF fruit/vegetable juice increased from traditional orange, apple, mango and mixed fruit to include unique flavours such as orange and carrot, mixed mango and grapes. These flavours enjoyed consumer acceptance, also because of their fortified proposition.

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