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Learn moreJan 2021
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Soft drinks in Saudi Arabia registered negative growth in 2020, mainly as a result of the impact of the government’s measures to reduce the spread of the COVID-19 virus. All foodservice outlets, including cafés, restaurants and bars, were closed in the early part of the year and faced strict limitations upon reopening.
Saudi Arabia locked down its capital Riyadh and the Islamic holy cities of Makkah and Madinah from 25 March 2020. With the borders of the cities closed and a 24-hour curfew in place, travel restrictions were also imposed on 13 regions.
Within soft drinks, manufacturers of juice and carbonates in particular re-evaluated their distribution lines and annual budgets in 2020 in response to the pandemic, closing unprofitable routes as the expat workforce of delivery drivers diminished and lower oil prices weakened the economy. In addition, there was greater investment in innovative products, technological solutions, and advertising to try to boost consumer interest and sales across retail channels.
Due to the COVID-19 crisis, several players in soft drinks, especially in carbonates and juice, were forced to close some unprofitable distribution lines. Non-online retailers also incurred additional operating costs as they were instructed to provide staff and delivery drivers with masks, gloves and other protective wear as part of kingdom-wide precautionary measures designed to limit the spread of the virus.
In March, all foodservice outlets, including cafés, bars and restaurants, were closed to the public. By early May, stores were allowed to reopen, but only to offer takeaway orders.
Looking ahead to 2021 and 2022, the effects of the COVID-19 pandemic will likely continue to impact on-trade soft drink sales, as predicted second and third waves of the virus continue to lead to foodservice closures and curfews. However, most players have now re-evaluated their distribution networks, supply chains and budgets to include COVID-19 precautionary measures, and this will enable companies to withstand the impact more effectively and even see boosts in sales in some categories.
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Overview
Discover the latest market trends and uncover sources of future market growth for the Soft Drinks industry in Saudi Arabia with research from Euromonitor's team of in-country analysts.
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This industry report originates from Passport, our Soft Drinks market research database.
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