Soup in Saudi Arabia

2021 DEVELOPMENTS

Retail demand slows in 2021 as consumers spend more time outside the home

Following the spike in demand that resulted from stockpiling and home seclusion in 2020, soup has experienced a significant slowdown in retail volume sales in 2021. At-home consumption occasions have been diminished as the threat from COVID-19 recedes with the rollout of vaccines, allowing for the return of employees to the office, the reopening of schools and the lifting of public health restrictions that had forced the temporary closure of foodservice outlets.

Dehydrated soup weathers the downturn better than other categories

Dehydrated soup looks set to be the strongest performer in current value growth terms in 2021, and is only expected to post a marginal decline in retail volume sales. As the dominant soup category in Saudi Arabia, it has been able to weather the downturn in overall retail demand better than others thanks to traditional consumption habits and its offer of an extensive assortment of product types and flavour variants.

Sunbulah and other players introduce new frozen soup products

Following new product developments by a number of manufacturers, the frozen soup category emerged in Saudi Arabia during the first half of 2021. One of the most notable launches was Sunbulah Gourmet Mushroom Soup, which comes in a 1kg pack containing frozen cubes that allow for faster preparation times and easier portion control.

PROSPECTS AND OPPORTUNITIES

Convenience factor will continue to boost packaged soup consumption

Growth in soup retail volume sales is expected to pick up substantially in 2022, and then continue accelerating at a more gradual pace over the remainder of the forecast period. As consumer lifestyles become busier with the further easing of the pandemic and increased economic activity in Saudi Arabia, appreciation for the convenience of packaged soup will continue to boost sales.

Health-oriented products expected to gain popularity

Health concerns will continue to inform consumer choices and shape competitive strategies in soup over the forecast period. Rising awareness of the risk factors associated with conditions like obesity and heart disease will lead more consumers to migrate to reduced fat and reduced salt varieties, which will in turn encourage manufacturers to expand their offer of such products.

Consumer acceptance of private label set to continue rising

Recent years have seen major grocery retailers in Saudi Arabia steadily expand their offer of private label products in soup, with Carrefour and LuLu being among the most active players in this regard. Private label penetration in the category has improved since the outbreak of COVID-19, initially as a result of stockpiling and the economic shock of the pandemic, and latterly because many consumers have become more cautious in their spending habits due to the VAT hike that took effect in 2020 and ongoing uncertainty.