Changes in the Saudi beverage market

What used to be a traditional and stable market in terms of consumption habits has now been turned upside down. Just how far has this transition gone? Will this have far reaching implications for marketers of traditional and non-traditional beverages?

To understand the dynamics of this important market TNS has launched TNS Liquids - the only research tool in Saudi Arabia to comprehensively track the beverage market. TNS Liquids monitors daily consumption across 20 beverage categories, along with consumption within category by different occasions and brands.

For comparison of beverage consumption behaviour, we will use 2003 as the base reference year.

Which Beverages Are Consumed?

In 2003, hot tea had an 81% incidence of consumption and more than a third (37%) of the share of beverage consumption occasions (excluding water). By comparison, 2005 data indicates that the incidence of hot tea consumption has reduced by 4% (78%), while the share of consumption occasions has decreased to 30%.





The stability of the beverage market, with hot tea ruling the roost, has been disturbed. What exactly has contributed to this disturbance may be debatable, but it seems that a shift in consumers' choice preference to a 'healthier' lifestyle, answered by the launch of fruit juices & juice milk, amongst others, has lead to this.

The other indicators of shift in consumers' preference to a healthier lifestyle are - increase in incidence of consumption of plain milk from 16% (2003) to 33% (2005 ; and flavoured milk from 3% (2003) to 10% (2005). The incidence of consumption of plain milk has increased amongst both children (56%) and adults (24%) in 2005.

Does this mean that tea, or for that matter coffee, are not seen as so 'healthy' drinks ?

Tea & Coffee

Table 2 suggests that the incidences of tea and coffee consumption have decreased in metros (Jeddah, Riyadh & Dammam) while the incidences of consumption of tea and coffee have actually increased in the provincial towns (Tabuk/ Medina, Buraidha/Onaiza, Qatif, Abha/Khamis, Uhudrfaida).

And, incidence of coffee consumption amongst females is still marginally higher than males.

Are consumers in metros then more 'health conscious'? Was tea ever perceived as a 'health beverage'? If yes, then why has this perception changed? These are the type of questions that need to be asked by tea and coffee marketers. Many such questions/hypotheses arise when investigating TNS Liquids and for some of these questions/ hypotheses it may not be possible for this monitor to answer, but TNS Liquids does provides guidance on the right direction for future action.

Main Reasons For Drinking Tea/Coffee?

The top 10 reasons for drinking each are:

Tea

1. Feel energetic/active/awake (24%)
2. Feel alert/focussed (22%)
3. Feel cool (21%)
4. Wash down the food (19%)
5. Habit (17%)
6. Aid in digestion (15%)
7. Feel close to family/entertain guests (13%)
8. Have a good time/fun (7%)
9. Feel refreshed/quench thirst (5%)
10. Feel soothed/relaxed/get sleep (5%)

(1. - 7. Top reasons for drinking tea)

Coffee

1. Feel alert, focussed (30%)
2. Feel cool (22%)
3. Feel close to family/entertain guests (18%)
4. Feel energetic/active/awake (18%)
5. Habit (16%)
6. Have a good time/fun (8%)
7. Feel soothed/relaxed/get sleep (4%)
8. Aid in digestion (3%)
9. Wash down the food (1%)
10. Feel refreshed/quench thirst (1%)

(1. - 5. Top reasons for drinking coffee)

It is clear from these lists 'health' is not amongst the top 10 reasons for consumption of either tea or coffee.

In fact the main reasons for drinking tea and coffee are very nearly the same i.e. 'feel energetic/active/awake' (tea) and 'feel alert/ focussed' (coffee).

Types Of Tea And Coffee Consumed?

The share of consumption occasions for tea bags does not show any dramatic shifts over the study period (73% - 2003 to 74% - 2005); while shares of consumption occasions for traditional coffees like Arabic/Turkish have declined from 61% (2003) to 57% (2005), with corresponding increases in modern/ branded coffees like instant coffee (19% to 25%) and exotic coffees (Cappuccino, Mocha, etc.) from 1% to 7%.

This suggests that Saudi lifestyles are undergoing a change - from traditional to modern or contemporary.

The average no. of occasions of tea consumption is more than two occasions per day, while the average no. of occasions of coffee consumption is less than 2 occasions per day. Tea is mostly consumed at breakfast and anytime between lunch & dinner - while coffee is mostly consumed anytime between breakfast & lunch and at lunch/dinner times.

Given these differences in consumption occasions, the reasons for consumption of each may not be so similar after all. 'Feel active/energetic/awake' may be more of a mental state and 'feel alert/focussed' may be more of a physical state. Such a hypothesis warrants a more in-depth investigation, but if this is true then this would help marketers to develop appropriate and distinctive marketing plans for tea and coffee respectively.

TNS Liquids serves as a useful monitoring tool to comprehensively track the entire beverage market in Saudi Arabia. 2,400 consumers are tracked in Saudi annually on their 'yesterday beverage consumption'. TNS Liquids covers all key nationalities (Local Arabs, Expat Arabs, Asians), children & adults (7 - 49yrs), both males and females. It is also representative of both urban and provincial Saudi Arabia.