Tea in Saudi Arabia

PROSPECTS

Rising health-consciousness continues to boost tea consumption

As was the case with coffee, the negative impact that worsening economic conditions and the exodus of foreign workers from the Kingdom had on retail volume and current value growth rates for tea in 2019 was cushioned by the government’s Saudisation policy, which supported rising employment among women and boosted the spending power of many consumers. In addition, the health and wellness trend continued to fuel growth in tea consumption, especially among women and younger Saudis.

Brand differentiation efforts increase as competition in tea intensifies

Increasing competition and the downturn in the Saudi economy encouraged the widespread use of price-based promotions in tea in 2019. For example, companies reduced prices for boxes of 100 tea bags, offered promotional discounts on family-sized packs etc.

Growing consumer sophistication drives demand for speciality products

It is expected that speciality tea products offering higher quality ingredients, more refined blends and novel or exotic flavour combinations will continue to gain popularity in Saudi Arabia over the forecast period. Interest in such products will be strengthened by rising disposable incomes and improvements in distribution via modern grocery retailers channels, as well as by growing consumer exposure to different types of tea in specialist on-trade outlets.

COMPETITIVE LANDSCAPE

Promotional activities help Lipton to strengthen its overall lead in tea

Lipton Tea Factory remained the leading player in tea in value terms in 2019. This was mainly due to its dominant position in black tea bags, though it also placed second in loose black tea and green tea.

AMS Baeshen updates packaging for a number of Al Rabea products

AMS Baeshen & Co was the second leading player in tea in 2019, finishing close behind Lipton in retail value sales terms. While its overall value share was down marginally from 2018, the company continued to perform positively thanks to sustained investment in marketing activities and packaging upgrades for a number of its products.

Free gift offers help Bentley’s to weather economic downturn

The Bentley’s brand benefited from continuous promotional support at the retail level in 2019. For example, consumers who purchased 225g packs of Bentley’s loose black tea received a 105g pack for free.

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