Hot Drinks Packaging in Saudi

Arabia
Euromonitor International
April 2023
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LIST OF CONTENTS AND TABLES

KEY DATA FINDINGS.................................................................................................................. 1
2022 DEVELOPMENTS ............................................................................................................... 1
Plastic pouches the best performing pack type ........................................................................ 1
Metal tins slip into decline in 2022 ............................................................................................ 1
Smaller pack sizes see a boom in 2022 ................................................................................... 2
PROSPECTS AND OPPORTUNITIES......................................................................................... 2
Investment of usd320 million to boost domestic coffee production ........................................... 2
Players increasingly offering environmentally-friendly packaging ............................................. 2

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HOT DRINKS PACKAGING IN SAUDI

ARABIA
KEY DATA FINDINGS
▪ Total packaging retail volumes rise by 2% in 2022 to 422 million units
▪ Metal is the best performing pack type in 2022, with total packaging retail volumes increasing
by 5% to 26 million units
▪ Total packaging retail volumes are set to grow at a CAGR of 5% over the forecast period to
542 million units

2022 DEVELOPMENTS

Plastic pouches the best performing pack type

Plastic pouches recorded the highest unit volume growth rate across hot drinks in Saudi
Arabia in 2022. It is an increasingly popular pack type for fresh coffee beans, which was
recording positive growth in 2022. Plastic pouches are popular as they are easy and
inexpensive to manufacture and are easy to stack and store. They also work as a good refill
pack type. The most sought-after factor is that plastic pouches are resealable. However, flexible
aluminium/plastic remains the main pack type in fresh coffee beans in Saudi Arabia.
Consumption of coffee pods received major impetus during lockdown, helping it to record very
strong growth in 2020, also helping to drive demand for folding cartons and other metal, the
main pack types for coffee pods. After stagnating in 2021, following the major sales spike
recorded in 2020, coffee pods recorded strong growth in 2022, with more expected over the
forecast period.
Tea is a popular product in Saudi Arabian hot drinks, with folding cartons and flexible plastic
the major pack types for this product. Major tea brands such as Al Rabea, Lipton and Twinings
offer all their variants of tea in folding cartons. These brands also offer multiple sachets of tea
bags, which are only available in folding cartons. Black tea and green tea are the main types of
tea sold in Saudi Arabia, with both having recorded positive growth over the review period, with
further growth expected for the forecast period, thereby helping folding cartons to grow over
these timeframes.

Metal tins slip into decline in 2022

Metal tins are popular as they are seen as preserving the product better. Premium products
also adopt this pack type as it is seen as giving a sense of luxury. However, metal tins, which
are mainly used in flavoured powder drinks, black tea and standard fresh ground coffee in Saudi
Arabian hot drinks, were declining in 2022. This could be attributed to the higher cost of
manufacturing metal tins, particularly in the prevailing inflationary environment. In addition,
metal tins cannot be easily customised into different pack sizes in the same way as flexible
packaging.
Glass jars are most extensively used in instant coffee, in which they are still the main pack
type. However, glass jars are losing share to other pack types like folding cartons and flexible
aluminium/plastic. While instant coffee as a whole as well as glass jars are expected to record
positive growth in the coming years, glass jars will continue losing share to folding cartons and
flexible aluminium/plastic within instant coffee over the forecast period.

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Smaller pack sizes see a boom in 2022

In the post-pandemic period, people are going back to offices and educational institutions,
with on-the-go or in-the-office consumption becoming more popular again, requiring smaller
pack sizes for easy consumption. In 2020, when COVID-19 arrived in Saudi Arabia, large pack
sizes in composite containers, metal tins and rigid containers were growing in importance as
these pack types offered a longer shelf life and resealability. Consumers were buying these
pack types to reduce the frequency of their shopping trips to physical stores to try and avoid
contact with COVID-19 when out in public. Flexible packaging in large pack sizes also increased
its share. However, this trend towards larger pack sizes proved to be relatively short-lived, with
consumers’ purchasing behaviour returning to normal relatively quickly, with the trend towards
small pack sizes back in force by the end of the review period.

PROSPECTS AND OPPORTUNITIES

Investment of usd320 million to boost domestic coffee production

Saudi Arabia’s Public Investment Fund (PIF) has launched the Saudi Coffee Company as part
of a SAR1.2 billion (USD320 million) investment to develop its national coffee industry. The
main goal is to increase the local production of coffee from 300 to 2,500 tonnes annually. PIF
said that the Saudi Coffee Company will have a strong focus on achieving sustainability in
production, distribution and marketing across the coffee supply chain. It will also work to develop
Saudi Arabia’s capabilities to export high-quality coffee beans to markets around the world.
In early 2022, “Arabic coffee” was officially changed to “Saudi coffee” in the Kingdom’s
restaurants, cafés, stores and roasteries. The Culture Ministry also named 2022 as the “Year of
Saudi Coffee”. In Saudi Arabian culture, coffee plays an important role not only as a drink but
also as a way of showing hospitality. As the Kingdom attracts more tourists, “Saudi coffee” has
become an increasing attraction. The new generation of baristas are making their recipes from
the scratch with different blends and roasts, which are reflective of Saudi Arabian culture and
tradition. This includes adding cardamom, saffron and cloves to the recipe to enhance the
flavour. Through partnerships with authorities associated with “Saudi coffee”, the endeavour
aims to develop the sector, improve the quality of coffee products, empower those working and
investing in coffee, and share the Kingdom’s coffee heritage with the world.

Players increasingly offering environmentally-friendly packaging

Sustainability initiatives are expected to reshape the packaging industry for hot drinks. Tea
companies are increasingly using biodegradable materials and atypical shapes like pyramid tea
bags. Companies such as Nestlé have officially pledged to align their packaging operations in
the Kingdom with Saudi Arabia’s Vision 2030.
Hot drinks players are expected to continue switching to more environmentally-friendly
packaging, such as folding cartons made from recycled materials, as they seek to reduce their
carbon footprint, with Saudi Arabia’s Vision 2030 also supporting the sustainability drive.

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