Saudi Arabia is largest soft drinks consumer in the Middle East

Saudi Arabia’s soft drink industry is the largest by volume and value than any country in the Middle East, a leader of the team tasked to develop the Greater Middle Eastern Market for Sidel said in a recent interview.

“With the hot and arid climate, rehydration is on the minds of the population every minute of each day. The soft drinks sector which includes bottled water, carbonated drinks, juices and energy drinks, is considered as one of Saudi Arabia’s most dynamic sectors,” said Andrea del Grosso.

Saudi Gazette recently met with del Grosso to discuss the packaging and beverage landscape in Saudi Arabia, its growth and prospects in the future.

According to industry estimates, sales of soft drinks are expected to continue to experience strong growth, increasing gradually by 52.6 percent in local currency-value terms up to 2016.

“From our experience in the market, we have noticed that Saudi consumers are brand-loyal and increasingly interested in new and innovative products, a factor that is increasing the demand for non-core soft drinks segments such as energy drinks, which are expected to experience strong growth, although from a relatively low base,” he added.

He noted that in the past few years, the demand for “rehydration” drinks in Saudi Arabia has risen dramatically and that many big firms in the industry are investing in the countries belonging to the Gulf Cooperation Council (GCC). “Many of the big players in the soft drink market have been investing across the GCC region, including Saudi Arabia,” he said.

“I believe this is because consumption of soft drinks and other sub-sets (bottled water, juices, among others) is much higher in GCC states than other neighboring countries. Therefore, with the large demand for bottled soft drinks, there is a need for large scale production of beverages into PET (polyethylene terephthalate) bottles,” he added.

He said the Middle East and Africa region as a whole is growing in significance in the global beverage industry and that it was with this in mind that Sidel established a new Greater Middle East and Africa Zone in 2013.

He said Sidel is the leading supplier of soft drinks to the Kingdom’s beverage industry and that in 2014 the company has opened a “Saudi entity” to support its after-sales service in the local market.

“This entity will house a stock of critical spare parts as well as technicians for quick trouble shooting. Our major customers in Saudi Arabia, including manufacturers like National Plant for Healthy Water (Hana water), Health Water Bottling Company (Nova), Al Hada, Makka, Aujan, Pepsi, Arrow Juices, Nestlé, and Coca-Cola have expressed their satisfaction for this significant initiative. Supporting (the local industry) was very important to them,” he said.

“Recently, in Saudi Arabia, the demand for bottled water has been increasing exponentially. People have become more conscious of the need for healthier diets. People are also more on the move than in the past and therefore the impulse to buy has taken its share of this significant market,” he said.

“Consequently, off-trade sales volume for bottled water, still and carbonated, has risen 52.4 percent since 2009, a total of 557 million liters. Furthermore, these sales are forecast to rise even further within the next 5-10 years,” he added.

“Saudi Arabia is our largest market in the Greater Middle East region. We have been present here for many years and over the past few years we have noticed a robust growth in demand from consumers on various beverage products. This trend has, in turn, been accompanied by a strong demand from beverage producers to acquire the latest technologies that help reduce cost and increase speed of production.”

This article was first published in the Saudi Gazette on Dec. 28, 2014.