UAE: Demand for non-alcoholic beverages sees more companies launch dry drinks
Over the last two years there has been a minor decrease in worldwide alcoholic beverage demand. Non-alcoholic beverages experience rapid growth especially with Millennials and Generation Z.
A combination of religious convictions along with worries about alcohol dependency, economic inflation and health problems leads consumers to choose "dry" beverage options.
2024 saw liquor manufacturers experiencing reduced income from sales of alcoholic beverages. Total spirits revenue experienced a 1.1 per cent decrease according to the US Distilled Spirits Council. The alcoholic drinks market experienced a slight overall decrease of 0.2 per cent in 2023 according to Euromonitor International.
One of the biggest alcoholic beverage manufacturers, Diageo, achieved a 56 per cent expansion in their non-alcoholic drinks portfolio.
The UAE's Drink Dry company launched to fill the small dry drinks market with limited options. During the preparation of shipments for non-alcoholic beer and sparkling wine Erika Doyle, the founder and CEO of the company, held no optimistic expectations.
In a worst-case situation where no one purchases the drink she will need to consume it herself or give it to friends while organizing numerous parties that could lead to financial losses due to product expiration.
The products became an instant success which forced Doyle to arrange more shipments through air transport due to the skyrocketing demand. Starting in 2021 and accelerating to the present moment the market continues its expansion. Statista Market Insights predicts that the UAE non-alcoholic beer market will expand by 3.80 percent each year for the next four years and will generate $94.6 million in sales by 2025.
The creation of Doyle's online store was driven by her personal choice not to drink alcohol and the limited selection of beverages which mainly consisted of sweet soft drinks. During her initial years in the country six years ago she found herself in a situation that felt like she had travelled back in time because the market lacked options for health-conscious adults who also liked social interaction.
Accidental brewing
Majlis Craft Arabian Ale used ancient regional history as inspiration while growing as a business in the UAE. Around 10,000 years ago on the Arabian Peninsula people discovered ale during bread preparation when they unintentionally brewed it with leftover liquid.
The hot climate caused bread to ferment but people preserved the resulting liquid because resources were limited. They preserved the liquid and added water before drinking it.
The company founder Igor Sergunin explained that although people who drank the ale were unaware of its benefits at the time, the fermented drink provided digestion and gut health advantages.
Sergunin aimed to make his product stand out from similar products available in the market. Majlis employs a more complex and expensive brewing method which avoids alcohol throughout the entire process instead of producing it first and then eliminating it later. “It’s all about the math,” Sergunin said.
The alcoholic brewing process typically follows a specified recipe yet substantial elements rely on taste. Our process primarily focuses on the malt.
‘Perfect market’
Homegrown brands share the market with international alcoholic companies that are now finding the UAE a desirable market for their non-alcoholic beverages. The United Dutch Brewery introduced their ‘3 Horses’ non-alcoholic malt beverage to the UAE market more than three decades ago.
Elkske Den Besten, trade marketing manager, identified the opportunity.
The European brewing company TCB Beverages is making efforts to establish itself within the UAE market. TCB Beverages' managing director Alex Kleon declared that they view this initiative as their chance to start a new business niche in soft drinks and alcohol-free malt beverages. We currently operate in Germany but this market represents the ideal environment for expansion.
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