Ban on production and consumption of alcohol makes non/low alcohol beer the only available product
The production and consumption of alcoholic drinks is totally forbidden under Islamic law and the Iranian government enforces this by any means. Although detrimental to the interests of alcoholic drinks in general, this law does present non/low alcohol beer with significant growth opportunities as this is the only legitimate alcoholic drink available in Iran. A diverse range of non/low alcohol beer in different flavours and packaging formats has been launched in Iran over the last 10 years and these have played a major role the in the rapid development of per capita consumption. Iranian consumers are also repelled by cola carbonates due to negative publicity and this means that non/low alcohol beer is popular as an alternative.
Strong demand among Iranian youth for alcoholic drinks is met by smugglers and homemade products
In spite of the complete ban on alcohol consumption in Iran, demand for alcoholic drinks remains high among the young population, who tend to increasingly ignore religious concerns. This has given smugglers a good chance to expand the black market in alcoholic drinks. However, after the sudden devaluation of the Iranian rial against the US dollar during 2012, the unit prices charged for smuggled products rose sharply, which has had a negative effect on demand. In response, more consumers have begun producing alcoholic drinks at home using basic equipment. The most popular type of such homemade drinks is aragh sagi which is a type of distilled alcoholic beverage which contains at least 45% pure ethanol. It is usually produced at home from raisins.
Behnoush Iran Co still remains the leading supplier of non/low alcohol beer
The competitive environment in non/low alcohol beer remained very intense during 2013. State-owned leader Behnoush Iran Co—once the undisputed leader with more than 90% of value sales—faces the challenge of the entrance of numerous newcomers which offer different varieties and packaging. As such, several new players such as Arpanoosh Co and Sirang Koohrang Co have emerged to gain substantial value share in recent years, at the expense of Behnoush Iran Co. In spite of this trend, Behnoush continued to dominate non/low alcohol beer due to its long history and the strong image of its key brand Delster. The majority of Iranian consumers refer to non/low alcohol beer as Delster regardless brand and Delster had become a generic terms used to denote all non/low alcohol beer.
Complete prohibition means that no specialist on-trade outlets such as pubs and bars exist
The bulk of non/low alcohol beer sales in Iran occur through off-trade channels, although the on-trade channel recorded a more dynamic performance in 2013 due to the increasingly intense culture of eating out in Iran. In Iran, the on-trade channel consists of restaurants, coffee shops and hotels. There are no bars or pubs present in the country due to the complete ban on the consumption of alcoholic drinks. These outlets, which once served only cola carbonates with food, now offer non/low alcohol beer due to the very high demand for healthier drinks.
Positive volume growth is expected during the forecast period, albeit at a slower rate
The outlook for non/low alcohol beer remains promising in Iran. The total ban on alcoholic drinks and negative publicity about cola carbonates are set to remain the main drivers of growth during the forecast period. The impending launch of a wide range of products in different flavours and improvements in distribution are also set to make impressive growth rates possible. Finally, the new reformist government is expected to improve relations between Iran and the West and this is likely to offer multinational companies new opportunities to invest in Iran. However, the growth rates expected in the industry during 2013 are not expected to be as high as the growth rates recorded over the review period due to the approaching maturity of the category. High rates of inflation are set to compromise purchasing power among Iranian consumers and this is set to be a major factor likely to hamper growth in the category over the forecast period.
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The Alcoholic Drinks in Iran market research report includes:
- Analysis of key supply-side and demand trends
- Detailed segmentation of international and local products
- Historic volumes and values, company and brand market shares
- Five year forecasts of market trends and market growth
- Production, imports by origin, exports by destination
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Our market research reports answer questions such as:
- What is the market size of Alcoholic Drinks in Iran?
- What are the major brands in Iran?
- Have there been any alcoholic drinks legislative changes over the past 12 months?
- How is the alcoholic drinks industry affected by the recession?
- What is consumed more; beer, wine or spirits?
- What have been the key trends seen in new product developments?
- Do alcoholic drinks consumers want value for money or added value?
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This industry report originates from Passport, our Alcoholic Drinks market research database.