Big Soda is in big trouble. Big Soda has also earned the wrath of many, not just for being linked to various health issues, but also for their significant to contribution to plastic waste - and being rather callous about both.

For decades, Coca-Cola and Pepsi dominated the market so thoroughly that their names became synonymous with soda. However, shifting consumer preferences reshaping the industry. Folks have also figured out the secret of their success – adding a bit of fizz to any concoction can pretty much make it a carbonated soft drink. And it doesn’t need to be drowning in sugar.

So you now have - around the world - a bubbling up of contemporary (and local) startups selling carbonated drinks in different forms, from sparkling to functional. 

Launch of the first dates-based soda

Among these new-age players is Thurath Al-Madina. In late 2024, this Saudi Arabian company introduced Milaf Cola, calling it the world’s first soft drink made exclusively from dates. Thurath Al-Madina is a subsidiary of the Saudi Public Investment Fund, the sovereign wealth fund of Saudi Arabia.

Milaf Cola is positioned as a better-for-you alternative to traditional sugary sodas. It is made without added sugar and contains natural fiber, antioxidants, magnesium, and potassium from its star ingredient.

Milaf Cola’s launch is in line with Saudi Arabia’s Vision 2030, an initiative focused on economic diversification and bolstering local industries to reduce the country’s dependence on imports. Food security is a major part of this initiative, and the country has earmarked US$10 billion to boost domestic food production and stabilize the supply chain. 

It also includes expanding the global market for date farmers in Saudi Arabia. Thurath Al-Madina has hinted at plans to expand with energy drinks and other innovative products. These efforts aim to showcase the versatility of dates and solidify Saudi Arabia’s reputation as a global leader in date production and innovation.

Like what you’re reading?

Tax the sweet

Milaf Cola’s launch is kind of also linked with the category’s not-so-great rep.

Sugar has become a dirty word for many consumers right now, so finding ways to avoid white refined sugar is a bit of a universal past time. Links between the consumption of sugary drinks and chronic issues are undeniable, and its making our parents, err… governments, nervous about hospital bills.

Saudi Arabia is the fifth largest consumer of calories from sugary beverages in the world and this is reflecting in the population. Obesity rates are 35.4% among adults and 36.2% in children. Type 2 diabetes prevalence is among the highest globally. Even the prevalence of dental caries among 6-7-year-olds is pretty high at 53%.

And so, the Kingdom levied a 50% excise tax on any beverage containing any type of sugar or sweetener. Exempt to this rule are 100% natural juices from fruit or veg sans the added sugar/sweetener. (Many thanks to GourmetPro expert Veronika Stabinger for pointing this out to me!)

The evidence that sugar taxes work is mixed and one study of its impact in Saudi Arabia actually found an increase among schoolchildren. But products like Milaf Cola could offer an alternative that might moderate consumption.

The rise of boycott brands

Geopolitical dynamics are also now involved in reshaping the soft drinks market in the Middle East. Coca-Cola and Pepsi and their flagship brands are being boycotted in several Muslim-majority countries over the ongoing war in Gaza. According to NielsenIQ, western beverage brands saw an estimated 7% sales decline in the first half of 2024 across the Middle East. And many regional players have gained ground by highlighting their homegrown credentials. There is some suggestion that Milaf Cola could be a reaction to the war.

Pakistani delivery app Krave Mart said that regional brands like Cola Next and Pakola have grown in popularity after the boycott and now account for 12% of their soft drinks category, up from 2.5% before.

’Tis the season for localization

There’s also a broader trend toward localization in the food and beverage industry at play here with growing appreciation of local heritage. Consumers are increasingly gravitating towards hyperlocal or indigenous dishes, ingredients, and flavors from brands that understand their cultural and health priorities. This doesn't mean that consumers will eschew big global brands completely, just that they will have more choice for different moods and occasions.

Even if Milaf Cola doesn’t pan out in the long run, it does show that there is a place for homegrown CSD brands. I wouldn’t be surprised to see more homegrown soda brands featuring local ingredients catering to local populations. There’s a sense of pride in seeing such ingredients among consumers, which will at least encourage them to give it a try.

It also means new avenues for governments to support local farmers, businesses, and products, potentially creating vertically integrated – perhaps even sustainable – revenue streams along the supply/value chains.

Want to explore opportunities in carbonated soft drinks within your region?

🔊 We want to hear from you! 🔊

Tell us what you thought about today’s topic, if there’s any topic you’d like us to cover, or just drop a line to say ‘hey’!

Just hit “reply” to this email. We read and answer all messages. 💌

About Us: GourmetPro is a global network of elite food and beverage industry talents. We provide fractional hiring solutions, allowing international managing directors to scale and transform their local resources and teams with high flexibility and expertise in more than 30 countries. Explore our services.

Made with ❤️ by GourmetPro - your network of Food & Beverage experts, on demand.

💖 And if you think someone you know might be interested in this edition of Market Shake, feel free to simply forward this email or click the button below. 💖

👉 P.S.: GourmetPro is also on LinkedIn!