Other Hot Drinks in Saudi Arabia

PROSPECTS

Growing young population drives sales of other hot drinks

A high birth rate and consequently a fast growing young population, which comprises the main consumer group for other hot drinks, will continue to drive volume and sales over the forecast period. Increased internet penetration and educational programmes on satellite TV channels have increased awareness among parents of the importance of food and beverages that are functionally fortified with certain vitamins and minerals, as well as the dangers of artificial colours, flavours and sugars to the growth of children.

Supermarkets and hypermarkets main distribution channel

Supermarkets and hypermarkets remained the main distribution channels for other hot drinks in 2018. These channels devote a significant portion of shelf space to leading brands that offer incentives in the forms of discounts, in-store promotions and displays, while smaller distribution channels, such as convenience stores and discounters, tend to have fewer special offers.

Malt-based hot drinks offers opportunities for local entrants

While the competitive landscape in other hot drinks is dominated by international brands, there are opportunities in some categories where local entrants could take a portion of sales. For example, malt-based hot drinks currently has no local players, and it is possible that local manufacturers will emerge to produce competitive, innovative products at affordable prices.

COMPETITIVE LANDSCAPE

Nestlé SA maintains its leading position in other hot drinks in 2018

Nestlé SA, with its flagship brand Nesquik, continued to lead other hot drinks sales in 2018. Nestlé SA enjoys a strong position within flavoured powder drinks, thanks to its well-known Nesquik and Milo brands, which have significant consumer loyalty.

International brands continue to dominate other hot drinks

In 2018, international brands continued to dominate other hot drinks, owing to the perceived quality of these brands over local brands. Consumer loyalty to the leading international brands has made it difficult for new players to enter the market, regardless of whether they are more affordable.

Key players focus on health and wellness to retain share

In the latter part of the review period, key players in other hot drinks began focusing on the growing health and wellness trend. In 2017, Nestlé SA introduced a new brand called Nesquik Chocolate “No Sugar Added”, in response to consumers wanting to reduce consumption of artificial sugar in hot beverages for themselves and their children.

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