A 50% sugar tax was implemented in December 2019 on sugar sweetened beverages (“SSBs”) in Saudi Arabia. This tax was applied to sweetened beverages that consist of water and sugar, sweeteners, concentrated liquids and powders, or extracts converted to beverages, yet excluded milk-based products (75% milk at least), milk, infant milk formula, as well as drinks that contain natural sugar, such as fruit juices, or are used for medical purposes.
Consumers continued to favour refreshing FF soft drinks over FF hot drinks in 2021. While retail volume sales of FF soft drinks fell at a faster rate than FF hot drinks in 2021, unlike in 2020, FF soft drinks overwhelmingly dominated the category in Saudi Arabia.
Fully vaccinated college and university students returned in person to the classroom in Saudi Arabia in 2021. In addition, pre-schoolers and elementary school children waited until 70% of the population had been double-jabbed or 30 October.
FF beverages is expected to see the downward trajectory in retail value (constant 2021 prices) sales continue through the forecast period. In retail volume terms, sales are projected to continue to fall in the shorter term, before rebounding in the second half of the forecast period.
The COVID-19 experience is expected to see manufacturers create or strengthen contingency plans to deal with potential new waves of the virus, or other potential health pandemics. Supply chain issues, inflationary pressures and geopolitical tensions may also inform the setting aside of budgets to deal with possible crisis periods.
Grocery e-commerce is set to continue evolving in Saudi Arabia with a developing infrastructure, including more players, faster delivery, online promotions, better customer service and larger selections, including health and wellness non-alcoholic drinks like FF beverages. In this vein, dark stores, which act as “retail distribution centres” that cater exclusively to online customers, are emerging in Saudi Arabia.
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This category includes fortified/functional beverages. When identifying fortified/functional products, we focus on products to which health ingredients or/and nutrients have been added as well as brands that are positioned to deliver a certain functionality. To be included here the enhancement has to be highlighted in the label or hold a health claim/nutritional claim. Fortified/functional food and beverages provide health benefits beyond their nutritional value and/or the level of added ingredients wouldn’t normally be found in that product. To merit inclusion in this category, the defining criterion here is that the product must have been actively fortified/enhanced during production. As such, inherently healthy products such as 100% fruit/vegetable juices are only included under "fortified/functional" if additional health ingredients (e.g. calcium, omega-3) have been added. To be included, the health benefit needs to form part of positioning/marketing of the product.See All of Our Definitions
This report originates from Passport, our Fortified/Functional Beverages research and analysis database.
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