FF beverages returned to growth in 2020 in current value terms, largely driven by a spike in demand for FF fruit/vegetable juice. With the outbreak of COVID-19 many people went in search of healthier drinks options, and in particular products which could boost their immune system.
While FF soft drinks witnessed a turnaround in fortunes in 2020, driven by the spike in demand for FF fruit/vegetable juice, the opposite was true for FF hot drinks. While sales of FF hot drinks continued to grow in current value terms in 2020, growth was nonetheless slower than in 2019 with consumers favouring healthier and more refreshing drinks such as fruit/vegetable juice and bottled water, which are better suited to the hot, dry climate.
The average unit price of FF beverages rose in 2020 which served to put the brakes on volume growth, with incomes coming under pressure due to COVID-19. Some products such as FF energy drinks were hit by the 50% excise tax that was imposed on sugary beverages as from 1 December 2019.
The positive light cast on FF fruit/vegetable juice by the COVID-19 crisis is likely to have a longer lasting effect beyond 2020, with consumers in Saudi Arabia being expected to pay more attention to what they eat and drink. The immune system and its importance in maintaining good health came to the fore in 2020, but its importance extends beyond just fighting off infections, with growing research linking it to preventing and treating non-communicable diseases such as Alzheimer’s and cancer.
FF hot drinks and FF soft drinks are both projected to see stronger growth over the forecast period with sales expected to benefit from consumers making healthier choices. A key factor in the recovery of FF soft drinks will be a return to growth for FF sports drinks and FF energy drinks.
It is expected that over the forecast period manufacturers will set aside a budget for potential future waves of COVID-19, or other potential health pandemics. They are also likely to focus their new product development on creating healthier options of existing product lines, in part to benefit from the heightened interest in health and wellness brought about by COVID-19, but also to help avoid the government’s 50% excise duty on sugary beverages.
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