UAE Alcoholic Drinks Market Size Likely to Grow at a CAGR of 7.5% By 2033

As per the current market research conducted by the CMI Team, the UAE Alcoholic Drinks Market size is expected to record a CAGR of 7.5% from 2024 to 2033. In 2024, the market size is projected to reach a valuation of USD 3,495.7 Million. By 2033, the valuation is anticipated to reach USD 6,702.1 Million.

UAE Alcoholic Drinks Market: Growth Factors and Dynamics

• Economic Growth and Expat Population: The UAE’s steady economic growth and significant expatriate population contribute to the expansion of the alcoholic drinks market. With a diverse population comprising both locals and expatriates from various countries, there is a demand for a wide range of alcoholic beverages to cater to different cultural preferences and drinking habits.

• Tourism and Hospitality Industry: The UAE’s thriving tourism and hospitality industry, characterized by luxury hotels, vibrant nightlife, and entertainment venues, drives the demand for alcoholic drinks. Tourists and residents alike seek diverse drinking experiences, ranging from beachside lounges to upscale bars and nightclubs, fueling the growth of the market.

• Rising Disposable Income and Lifestyle Changes: As disposable incomes rise among UAE residents, there is an increased willingness to spend on leisure activities, including dining out and socializing. This trend, coupled with changing lifestyle preferences, contributes to the growing consumption of alcoholic beverages, particularly premium and craft offerings.

• Government Regulations and Taxation: Government regulations and taxation policies significantly influence the alcoholic drinks market in the UAE. While alcohol consumption is permitted for non-Muslim residents and visitors, strict regulations govern its sale, distribution, and consumption. Changes in taxation, licensing requirements, and alcohol purchasing limits can impact market dynamics and consumer behavior.

• Diversification of Retail Channels and Marketing Strategies: The alcoholic drinks market in the UAE is witnessing diversification in retail channels, with the emergence of specialty liquor stores, online platforms, and exclusive events catered to alcohol enthusiasts. Additionally, brands are investing in innovative marketing strategies, including influencer collaborations, experiential events, and digital campaigns, to engage consumers and drive sales.

• Cultural Shifts and Changing Lifestyles: There’s a noticeable shift in cultural attitudes towards alcohol consumption in the UAE, with a younger demographic embracing social drinking and leisure activities. This changing lifestyle, coupled with a growing preference for dining out and socializing, drives demand for alcoholic beverages across various segments.

• Growing Demand for Premium and Craft Products: As consumers become more discerning and sophisticated in their tastes, there is a rising demand for premium and craft alcoholic beverages. This trend is evident in segments such as craft beer, artisanal spirits, and boutique wines, driven by a desire for unique flavors, quality, and exclusivity.

UAE Alcoholic Drinks Market: Partnership and Acquisitions

• In 2022, Diageo introduced “Godawan Single Malt,” its first locally crafted artisanal whisky, available in Dubai. This debut marks a significant milestone in the UAE’s whisky scene, offering connoisseurs a taste of premium, locally produced spirits.

• In 2022, Amstel unveils new 0.0% alcohol beers infused with pomegranate-flavored malts in the United Arab Emirates, catering to health-conscious consumers seeking flavorful and alcohol-free alternatives.

Report Scope

UAE Alcoholic Drinks Market: COVID-19 Analysis

The COVID-19 pandemic has significantly impacted the UAE Alcoholic Drinks Market, with the industry experiencing both positive and negative effects. Here are some of the key impacts:

• Disruption in On-Trade Channels: The closure of bars, restaurants, and hotels during lockdowns significantly disrupted the on-trade channels, leading to a sharp decline in sales of alcoholic beverages. Restrictions on social gatherings and events further exacerbated the impact on this segment.

• Shift in Consumer Behavior: COVID-19 prompted changes in consumer behavior, including a preference for at-home consumption and a shift towards online purchasing. While off-trade channels experienced increased sales during the pandemic, on-trade channels faced prolonged closures and reduced foot traffic, impacting overall market dynamics.

• Adaptation of Online Sales Channels: To capitalize on the growing trend of online shopping, alcoholic beverage retailers and distributors have expanded their online presence and e-commerce capabilities. This includes offering a wide range of products online, providing delivery services, and implementing contactless payment options to cater to changing consumer preferences.

• Focus on Premiumization and Innovation: To stimulate demand and differentiate from competitors, brands are focusing on premiumization and innovation. This involves introducing new product variants, limited editions, and innovative packaging formats to attract consumers seeking unique and high-quality drinking experiences.

• Strategic Marketing and Promotion: Brands are investing in strategic marketing and promotional activities to reconnect with consumers and drive sales. This includes advertising campaigns, social media engagement, and partnerships with influencers or celebrities to create buzz and generate interest in their products.

• Partnerships with Hospitality Industry: As the hospitality sector gradually reopens, alcoholic beverage companies are forming strategic partnerships with bars, restaurants, and hotels to revitalize on-trade sales. Collaborative initiatives such as special promotions, events, and exclusive offers aim to reignite consumer interest and drive foot traffic to these establishments.

• Emphasis on Health and Wellness: With growing health consciousness among consumers, there’s a focus on introducing healthier alcoholic beverage options, such as low-calorie drinks, organic ingredients, and functional beverages. Brands are aligning their offerings with health and wellness trends to appeal to health-conscious consumers and diversify their product portfolios.

In conclusion, the COVID-19 pandemic has had a mixed impact on the UAE Alcoholic Drinks Market, with some challenges and opportunities arising from the pandemic.

List of the prominent players in the UAE Alcoholic Drinks Market:

• Emirates National Alcohol Company (ENAC)
• African & Eastern (A&E)
• MMI (MMI Dubai)
• Maritime and Mercantile International (MMI)
• Spinneys Dubai LLC
• United Cellars
• African & Eastern Gulf LLC
• African + Eastern
• Grand Stores LLC
• Intercontinental Beverage Capital (IBC)
• Le Clos
• Emirates Hospitality Centre (EHC)
• Aujan Industries Co.
• Raffles Wines & Spirits
• Alpha Fine Foods Limited
• Others

The UAE Alcoholic Drinks Market is segmented as follows:

By Type

• Beer
• Wine
• Spirits
• Ciders and Flavoured Alcoholic Beverages (FABs)
• Others

By Alcohol Content

• High
• Medium
• Low

By Packaging

• Aluminium Cans/Tins
• Glass Bottles
• Others

By Category

• Mass
• Premium

By Distribution Channel

• On Premises
• Liquor Stores
• Internet Retailing
• Supermarkets
• Others