The 100% excise taxes on sports drinks and energy drinks, as well as the 50% excise taxes on carbonates, continue to affect consumers’ purchasing behaviour in Saudi Arabia. Consumers perceive these drinks as expensive, as well as being unhealthy drinks, and are accordingly limiting their intake or opting for healthier soft drinks alternatives.
Most key soft drinks companies participated in promotional campaigns in leading distribution channels during 2018. Reduced prices on multipacks of single-serve pack sizes, as well as family pack sizes were the most common.
Some consumers in Saudi Arabia are switching to RTD tea and coffee as healthier alternatives to carbonates and energy drinks. Moreover, the hot weather conditions in the country encourage consumers to try different soft drinks, especially during the summer, to satisfy their thirst.
Most soft drinks companies in Saudi Arabia are focusing on extending their product lines to provide consumers with a wider array of products. Examples include Lipton RTD tea’s premium line in glass bottles, Tang’s new Mixed Berries flavour and its new concentrated pack size of 84g for SAR1, producing one litre, Nescafé extending its iced coffee line to include concentrated powder format in two limited edition flavours, Almarai long-life juice line Joosy in folding cartons and metal cans, and Berain carbonated purified water in glass bottles.
Soft drinks companies are expected to continue to develop products in line with the health and wellness trend in Saudi Arabia. Examples include reduced sugar content, natural ingredients, organic products, added vitamins and minerals, and smaller pack sizes.
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This industry report originates from Passport, our Soft Drinks market research database.