Alcoholic Drinks in Saudi Arabia

Abstract

Why buy this report

• Get insight into trends in market performance
• Pinpoint growth sectors and identify factors driving change
• Identify market and brand leaders and understand the competitive environment

Product coverage

Beer; Cider/perry; RTDs/High-strength premixes; Spirits; Wine

Executive summary

Saudi regulations create strong demand for non-alcoholic beer

With Saudi regulations completely forbidding the drinking, manufacturing and trading of any alcoholic drink, non-alcoholic beer was a success in Saudi Arabia, generating strong sales. Value and volume sales continued to grow rapidly in 2007 at a double-digit growth rate that is in line with the healthy CAGR seen during the review period.

Dynamism supported by aggressive competition and promotion

Despite approaching maturity for non-alcoholic beer, sales continued to be dynamic in 2007. The key growth factor was the aggressive advertising and promotional campaigns conducted during the year by leading suppliers. TV adverts on both local and regional TV stations were aired extensively on a daily basis for leading brands such as Feldschlössen Getränke' s Moussy Classic and Aujan Industries- Barbican. In-store promotions were also abundant, especially for multi-packs of six units, which are sold at more attractive prices than single units. Product diversification in terms of flavours and new launches and relaunches also helped to create a better penetration for non-alcoholic beer among young adults of both sexes.

Barbican and Moussy Classic fight for leadership

Non-alcoholic beer is a highly lucrative business in Saudi Arabia. It therefore attracts many local and multinational companies such as Aujan Industries Co Ltd, Feldschlössen Getränke AG, Holsten-Brauerei AG, Kaiserdom Brewery GmbH and Al Ahram Beverages Co (owned by Heineken NV). Competition is aggressive, especially between the top two leading brands, Aujan Industries- Barbican and Feldschlössen Getränke' s Moussy Classic. Both brands enjoy high consumer loyalty maintained by aggressive advertising and promotional campaigns.

Supermarket/hypermarkets capture the majority of sales

Improving distribution was another factor giving a boost to sales of non-alcoholic beer in Saudi Arabia. By 2007, these products were widely distributed among many types of outlets including supermarkets, hypermarkets, convenience stores, independent food stores and discounters, with supermarkets/hypermarkets accounting for the largest portion of volume sales in 2007. Supermarkets/hypermarkets- numbers increased dramatically over the review period, with these outlets offering a wide range of products and commonly selling easy-to-carry multi-packs of leading brands such as Moussy Classic and Barbican.

Growth slows over forecast period

Growth in sales of non-alcoholic beer is expected to slow over the forecast period, while continuing to offer potential for further expansion in terms of per capita consumption. New launches such as Amstel Zero will support growth, with this likely to be introduced before the end of 2007. In addition, improved varieties in terms of flavour and a continual increase in spending on advertising and promotion will be the main driving forces for future growth.