Saudi Arabia Soft Drinks Market to Hit Valuation of USD 18.1 Billion By 2032 | Astute Analytica

The soft drinks market in Saudi Arabia is poised for continued growth, driven by climatic conditions, economic stability, and evolving consumer preferences. Major global and local players are actively competing and innovating to capture market share, making it a dynamic and promising sector.

New Delhi, June 06, 2024 (GLOBE NEWSWIRE) — According to the latest research study, the Saudi Arabia soft drinks market was valued at US$ 13.2 billion in 2023 and is projected to reach US$ 18.1 billion by 2032, growing at a CAGR of 5.92% during the forecast period 2024-2032.

The soft drinks market in Saudi Arabia has experienced healthy growth in recent years. Sales of soft drinks continued to see robust growth in retail volume and value terms in 2023, driven by hot climate and increasing consumer demand. The Saudi Arabia beverages market size was 4.54 billion liters (BL) in Q4 2023, with soft drinks accounting for the highest market share. Specifically, the revenue for carbonated soft drinks is projected to be higher, with a combined volume of 2.3 billion liters.

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Saudi Arabia is one of the largest consumers of soft drinks in the Middle East, with 85.8% of adults reporting consumption of sweetened soft drinks. 16% of participants reported consuming soft drinks daily or frequently (3-6 times per week). About 71% of respondents consumed sugar-sweetened beverages (SSBs) at least once weekly. Higher likelihood of SSB consumption was reported among men, younger age groups (25-34 years), lower-income individuals, smokers, frequent fast-food consumers, and those who watch TV for longer hours.

Health concerns are prominent in Saudi Arabia, which is among the top 10 countries for obesity and diabetes prevalence, with rates of 33.7% and 23.7%, respectively. As a result, consumers in Saudi Arabia soft drinks market are increasingly shifting towards healthier soft drink options such as bottled water and beverages low in sugar and free from artificial additives. Socio-environmental factors also play a significant role in consumption patterns, including availability, affordability, advertising, and social gatherings.

Distribution, Economics, and Preferences in Soft Drinks Market of Saudi Arabia

Supermarkets, hypermarkets, and small local grocers continue to lead the distribution of soft drinks. In 2023, foodservice sales outperformed retail growth rates in most soft drink categories. Households drive market demand, representing 99.0% of total demand in 2023. Saudi Arabia’s Vision 2030 strategy aims to attract over 100 million visitors annually by 2030, which is expected to boost soft drink consumption. Economic growth and rising disposable incomes in emerging markets have led to an increase in consumer spending on beverages. The market is dominated by domestic suppliers, with imports accounting for only 0.9% of the total market size in 2023.

There is a growing trend towards premium and craft soft drinks, with consumers willing to pay higher prices for unique and high-quality products. The increasing popularity of functional beverages is a key trend, with consumers seeking additional health benefits. Nutritional labeling has also gained importance, with consumers checking for specific information such as sugar content and natural ingredients. The soft drinks market is expected to show a volume growth of 1.9% in 2025. The average volume per person in the market is expected to amount to 104.40 liters in 2024. In the carbonated soft drinks segment, the average volume per person is expected to be 58.29 liters in 2024.

Key Findings in Saudi Arabia Soft Drinks Market

Market Forecast (2032) US$ 18.1 Billion
CAGR 5.92%
By Product Type Non-Carbonated Drinks (46.7%)
By Flavor Varieties Fruit (37.2%)
By Target Audience    Adults (46.3%)
By Distribution Channel Offline (66.8%)
By Packaging Type Bottles (46.3%)
Top Trends
  • Innovative Packaging Solutions: Introduction of hygienic and recyclable packaging, such as Coca-Cola’s foil overlid cans
  • Limited-Edition Flavors: Launch of unique and limited-edition flavors to attract consumers, like Coca-Cola’s partnership with Riot Games.
  • Health-Conscious Products: Increasing demand for healthier beverage options, including functional teas and kombucha.
Top Drivers
  • Hot Climate: The arid climate drives constant demand for rehydration beverages.
  • Economic Stability: Rising oil prices and economic activities boost consumer spending on soft drinks.
Top Challenges
  • Local regulations and taxes impacting the availability and affordability of certain soft drinks.
  • Cultural Preferences: Strong preference for Pepsi over Coca-Cola due to historical and cultural factors.
  • Advertising Restrictions: Partial prohibition on energy drink advertising affecting marketing strategies.

The Unquenchable Thirst for Non-Carbonated Soft Drinks in Saudi Arabia Brings in More than US$ 6,227.1 Million Revenue in 2023

The consumption of non-carbonated soft drinks in Saudi Arabia is significantly influenced by cultural, economic, and environmental factors. Studies indicate that 85.8% of adults in Saudi Arabia consume sweetened soft drinks, with 43% consuming one can (330 mL) or more each time, and 6% of adults reported daily consumption in 2019. The market demonstrates a strong preference for sweetened beverages, heavily swayed by cultural inclinations. The hot and arid climate further drives the need for rehydration, making soft drinks a popular choice. This is reflected in the market size, which stood at 4.54 billion liters in Q4 2023, with soft drinks holding the highest market share. Economically, the soft drinks market in Saudi Arabia was valued at US$13.39 billion in 2023, with non-carbonated soft drinks contributing nearly 47% of this market.

On the other hand, the average volume per person in the carbonated soft drinks is predicted to be 61.74 liters in 2024. From 2016 to 2024, the market volume grew at a CAGR of 2.63%. Future projections estimate the volume in the carbonated soft drinks will reach 2.5 billion liters by 2027, with a volume growth of 3.9% anticipated in 2025.

Despite the economic growth, health concerns are prevalent, with high consumption linked to non-communicable diseases like diabetes and heart disease. Efforts such as soft drink taxes have been implemented to curb consumption, although their effectiveness varies. The prevalence of soft drinks consumption was 67% among Saudi adults in any given week. Comparatively, the consumption patterns in Saudi Arabia are similar to developed nations like the USA, where 40% consume soft drinks daily, and South Africa, with a 48.3% daily consumption rate.

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The Sweet Success of Fruit-Flavored Soft Drinks in Saudi Arabia to Rake in More than US$ 4,971.7 Million Revenue in 2023

Fruit-flavored soft drinks have become the most popular choice among Saudi consumers due to a combination of health consciousness, cultural preferences, and market dynamics. The growing awareness of health and wellness is driving the demand for non-carbonated and natural beverage options, with fruit flavors perceived as healthier alternatives. This trend is evident as fruit flavors held over 37% of the market share in the Saudi Arabia soft drinks market in 2022. Additionally, Saudi Arabia, the largest consumer of soft drinks in the Middle East, sees around 30% of adults consuming soft drinks weekly. The preference for fruit-flavored drinks is particularly strong among the youth, with more than half of the consumers aged between 20-29 years, and both genders showing a strong preference for these beverages.

Cultural and social factors also play a significant role in this trend. As an Islamic country where alcohol is prohibited, Saudi consumers seek flavorful non-alcoholic beverages like fruit-flavored soft drinks. These drinks are popular in social settings such as cafes and foodservice outlets. The market is responding to this demand with a growing trend towards premium and craft soft drinks, with consumers willing to pay more for high-quality fruit-flavored beverages. The Saudi soft drinks market is expected to see strong growth, driven by population expansion and a constant need for refreshment. Soft drink producers are launching a variety of beverages with fruit flavors, including citrus, berries, tropical, and exotic fruits, catering to evolving consumer preferences.

Despite the health risks associated with sugary drinks, such as diabetes and heart disease, the preference for fruit-flavored soft drinks remains strong due to their perceived health benefits. The market size for beverages in Saudi Arabia was 4.54 billion liters in Q4 2023, with soft drinks accounting for the highest market share. Surveys indicate that nearly 75% of soft drink consumers are women, who often prefer fruit-flavored options. Additionally, there is a rise in demand for functional beverages, which often include fruit flavors due to their natural and health-boosting properties. The adoption of supermarket e-commerce for beverages, including fruit-flavored soft drinks, is also accelerating, making these products more accessible to consumers.

Adults Have Higher Affinity for Soft Drinks in Saudi Arabia as More than 46% Revenue Comes from Adult Spenders

Soft drink consumption among adults in Saudi Arabia soft drinks market is significantly influenced by cultural and social norms. Social gatherings and dining out are integral parts of Saudi culture, where soft drinks often play a central role. A study found that 85.8% of adults in the Kingdom consume sweetened soft drinks, with 43% consuming one can (330 mL) or more each time. Despite the introduction of a special excise tax on soft drinks in 2017, which was intended to curb consumption, the demand remains high, showing inelasticity. This trend is further supported by targeted marketing efforts from manufacturers who develop premium offerings, functional beverages, and low-calorie options that appeal specifically to the adult segment.

The economic and demographic landscape of the Saudi Arabia soft drinks market also drives this high consumption rate. Saudi Arabia’s soft drink industry is the largest by volume and value in the Middle East, largely driven by adult consumers. Young adults and men, in particular, show higher consumption rates, with 67% of the adult population consuming soft drinks weekly. About 55% of adults prefer carbonated drinks, while 45% opt for non-carbonated options. The affordability of soft drinks, even with the excise tax, makes them a convenient choice for many. Additionally, 60% of adults tend to purchase soft drinks during grocery shopping, and 40% consume them at restaurants or cafes. Despite these risks, the cultural preference for soft drinks remains strong, necessitating targeted public health interventions to manage non-communicable diseases.

Social and economic factors further support the trend of high soft drink consumption among adults. The availability of soft drinks in various retail outlets, restaurants, and cafes, combined with the influence of advertising and media, encourages frequent consumption. Peer influence and the perception of soft drinks as symbols of modernity and social status also play a role. The introduction of functional beverages that cater to health-conscious adults and the urbanization trend, which favors convenience foods and beverages, contributes to the sustained high consumption in the soft drinks market. Approximately 70% of adults are influenced by advertisements, and 50% of them prefer international brands over local ones. As Saudi Arabia’s Vision 2030 strategy aims to attract over 100 million visitors annually, the demand for soft drinks is expected to rise, driven by both residents and tourists.

Saudi Arabia Soft Drinks Market Key Players

  • Aujan Coca-Cola Beverages Company
  • Al Rabie Saudi Foods Co.
  • Al Jomaih Bottling Plants
  • National Beverages Company
  • Al-Amoudi Beverages Industries
  • Saudi Industrial Beverages Company (SIBC)
  • Abdullah Al-Othaim Market Company
  • Almarai Company
  • Al Safi Danone Company
  • PepsiCo
  • Other Prominent Players

Key Segmentation:

By Product Type

  • Carbonated
  • Non-Carbonated
    • Fruit Juices
    • Flavored Drinks
    • Hot drinks (tea & coffee)
  • Functional Beverages
    • Functional Water
    • Sports Drinks

By Flavor varieties

  • Cola Flavors
  • Citrus Flavors
  • Fruit Flavors (Other than Citrus Fruits)
  • Others

By Target Audience

  • Adults
  • Children and Teens
  • Health-Conscious Consumers

By Packaging Type

  • Cans
  • Bottles
  • Tetra Pak or Cartons

By Distribution Channel

  • Offline
    • Supermarkets/Hypermarkets
    • Wholesalers
    • Retail Stores
    • Specialty Stores
  • Online

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