Many hot drinks in the United Arab Emirates are considered to be less essential compared to food categories and some soft drinks categories, such as bottled water and juice. This makes them vulnerable in the face of inflation, economic instability or population shift.
Due to a shift in local consumers’ purchasing power, a polarisation trend is emerging across hot drinks, although this is mostly visible within coffee and tea. On the one hand, hot drinks has demonstrated limited price growth compared to soft drinks and many food categories.
A strong entry of several private label lines within coffee, tea and flavoured powdered drinks has marked the change in the hot drinks landscape in the United Arab Emirates. More affordable private label products are attracting consumers with low purchasing power, creating competition for existing brands.
The share of retail e-commerce remains considerably higher than pre-pandemic levels, offering consumers regular or quick delivery. The top players in this channel are Carrefour, Lulu and Amazon.
In line with greater mobility outside of the home, foodservice volume growth of hot drinks continues to outperform retail. One of the success factors is a surge in tourist arrivals in 2022 and 2023, thereby boosting demand through consumer foodservice in the United Arab Emirates, especially in Dubai.
Retail volume and value sales (at constant 2023 prices) of hot drinks are expected to demonstrate consistent, but moderate growth over the forecast period. The organic growth in volume terms will be fuelled by the consistent growth of the local population and enhanced inbound tourism.
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Hot Drinks
This report originates from Passport, our Hot Drinks research and analysis database.
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