Fortified/Functional Beverages in Saudi Arabia

PROSPECTS

FF sports drinks benefits from the government's efforts to encourage healthy lifestyles, getting the population active

The government's efforts to increase health awareness and encourage an active lifestyle, partnered with its backing of new sports franchises and gyms, was slowly supported the growth of FF sports drinks in 2019. There is still room for awareness to be built around FF sports drinks, and players are doing that by either sponsoring sports matches while promoting their sports drinks by distributing them to the players as well as spectators or placing their sports drinks in chillers at the entrance and exit areas of gyms and activity centres.

Growth declines in FF energy drinks, as it sets to battle against negative health perceptions

FF Energy drinks are popular among many consumers in Saudi Arabi, who appreciate the taste and temporary energy boosts that they supply. 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.

However, despite high levels of value sales, growth in energy drinks declines in 2019.

In 2017, the excise tax was implemented on energy drinks, followed by VAT in early 2018, which hampered the success of these beverages, putting them at a disadvantage. In 2019, consumers in Saudi Arabia were becoming wary, and conscious of the unhealthy aspect of drinking FF energy drinks.

FF fruit/vegetable juices remain popular as FF juice drinks (up to 24% juice) showcases strong growth

FF fruit/vegetable juices are a popular range of FF products in Saudia Arabia, bringing in steady value growth and sales in 2019. In FF fruit/vegetable juice, players are constantly looking to innovate with newer flavours, unique combination of fruits and vegetable mixes, as well as fruits and vegetables combined.

COMPETITIVE LANDSCAPE

FF energy drinks players continue to retain their strong position in FF beverages, competing with well-established offerings

Abuljadayel Beverages Industries Llc, ALJSR Global and Ahmed Mohammed Abdul Wahab Naghi Establishment, all continued to have solid positions in fortified/functional beverages in 2019, responsible for over half of value sales. These players benefit from their strength in FF energy drinks, the largest area within fortified/functional beverages.

Al- Rabie are fierce competitors in 2019, introducing an array of new FF beverages to the landscape

Al- Rabie juices launched the most products in 2019, all aligned to the growing trend of health and wellness. Al- Rabie made additions to its line of juices which are fortified with vitamins, free of artificial colours, artificial flavours or preservatives.

Strong presence of domestic players in FF fruit/vegetable juice as local consumers appreciate their investments in new product developments

Both international and local brands were present in FF beverages in 2019. While 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 also had an established presence.

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