Room For Growth Across Soft Drinks


As the region's largest economy by some distance, it is no surprise that Saudi Arabia's soft drinks industry is also the Gulf region's largest in volume terms. By volume, we believe that it accounts for about two thirds of the region's soft drinks sector. In per capita terms, consumption of soft drinks, which by our definition includes bottled water, carbonates, juices and functional drinks (energy drinks), increased from 217 litres in 200 4 to nearly 241 litres in 2011 . In value terms, the size of the industry grew from US$ 5.5 bn to US$ 9.4 bn over the period, with bottled water and carbonates between them making up about 80% of sales.

Bottled Water Widely Consumed
Saudi Arabia Carbonated Drinks Sales and Bottled Water (mn litres)

The carbonates category has been the slowest grower in volume terms in particular over the past few years , which is hardly surprising given its relative maturity. Just like in the wider Gulf region, bottled water sales really took-off over the past decade, driven by rising incomes. Per capita GDP has grown considerably , reaching well over US$15,00 . In per capita terms, bottled water consumption increased from about 95 litres in 200 4 to more than 10 9 litres by 201 1 . Concerns over the safety of tap water and Saudi Arabia's harsh climate provide a great environment for the bottled water industry. A big trend over the period was the take-off in bulk water. Innovation and rising health-consciousness will continue to have strong influences over the next few years, which should be especially good for diet carbonates, juices and water.

Going forward, we see a lot of room for growth in the energy drinks sector. Across the world, energy drinks have really taken off over the past decade, and in the developed world in particular ha ve continued to perform well even as the global economy has weakened considerably. We fully expect the category to continue to lead the industry from a growth point of view over the next few years in Saudi Arabia as more money is pumped into the sector.

This article is tagged to:
Sector: Food & Drink
Geography: Saudi Arabia