Wednesday, 02 September 2015  -  18 Dhul-Qada 1436 H
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Kingdom beverage market thrives; 8% growth yearly

Ranjitha Subash

JEDDAH – The Saudi beverage market is growing at an annual rate of over eight percent, according to Ranjitha Subash, Consumer Insights Director at Kantar Worldpanel.

Insights revealed that the food and beverage (F&B) sector is driving sector growth, with each Saudi household buying an average of eleven various beverage categories. 

“Cold beverages and dairy product range, and interestingly more contemporary segments like energy drinks, malt drinks and flavored dairy products are leading the spurt,” said Subash.

“A high growth rate of these segments indicates a fragmenting of the beverage market through the development of differentiated need states.”

Subash cites information derived from the household purchase panel in Saudi and insights she shared at the recent the Middle Beverage Congress. “Our home panel data reveals a compelling truth, which is that there are only three ways to grow a business; gaining more consumers, making consumers buy more often and making them purchase bigger quantities.”
She added that a lot of the high growth categories are expanding the Saudi buyer base. Interestingly, flavored dairy products enjoy an increase in both buyer base and consumption levels; the best form of sustainable growth.   

“Though the ‘newer formats’ are gaining momentum, these categories  are more inclined towards expats who seems to be the early adopters, locals still prefer traditional beverages like coffee, concentrates and Laban.”

It was observed that shopper behavior is changing for the beverage categories.  The data revealed further that the number of shopping trips for beverages has not increased over time. However most of the beverage categories are seeing an increase in basket size where consumers are either upsizing or opting for multi packs.  Brands need to compete for basket share during these trips.
“Another big trend indicates that the Saudi market is showing a gradual shift towards cold with hot beverages losing growth momentum amongst its core consumers. Residents still continue to consume hot beverages with coffee more patronzed by affluent class and tea relatively towards the lower class,” Subash noted.  

The Kingdom is home to a population of 28 million, which continues to grow at three percent annum or three times more than the world growth forms an important market naturally. 

“We need to watch and track the momentum of this evolving beverage market that is poised for a promising future as its time now for these new beverage formats to get cracking on speaking to the local Saudi families to accelerate their growth momentum,” she said.

Kantar Worldpanel is the global leader in consumer insights based on continuous consumer panels while TNS features as the world’s largest custom market research organization.  Both are part of Kantar, one of the world's largest insight, information and consultancy networks. — SG

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