Retail volume sales of hot drinks are set to continue their growth in 2022, albeit marginal, with retail current value growth seeing a slightly better performance due to price rises. Part of the reason for the slowdown in retail growth has been more time spent outside the home as the pandemic eases.
Due to the integration of an expanding international consumer base in the United Arab Emirates, with a diversity of backgrounds other than the local Arabic coffee and tea culture, hot drinks is increasingly diversifying, mainly in terms of flavours and functionality. To capture a wider audience that is ready to explore different products, the main players in hot drinks are ramping up their innovation and sustainability agendas to meet the consumer demand for healthier, functional and more sustainable products in a wider variety of flavours.
Nestlé Middle East FZE and Unilever Gulf FZE are expected to maintain their strong leading positions in retail value terms in 2022, and will remain the only players to hold double-digit shares. Nestlé’s main strength is in coffee, and Unilever’s in tea, whilst both also have a presence in other hot drinks, with Nestlé leading this category.
There were no distribution problems or product shortages affecting hot drinks during the pandemic in the United Arab Emirates, and this has remained the situation in 2022. In addition, the recent supply chain pressures affecting manufacturers globally due to geopolitical problems and inflationary pressures were not felt too intensely, due to strong supply structures and the economic position of the United Arab Emirates.
After seeing an exceptionally strong decline in 2020 due to the pandemic, the volume consumption of hot drinks through the foodservice channel has been experiencing a rebound since the beginning of 2021. 2021 saw a particularly strong increase, but growth is set to continue in 2022.
In the forecast period, hot drinks is anticipated to continue to see volume growth in the foodservice channel, which will outpace that in the retail channel. Volume sales to foodservice are expected to return to the pre-pandemic level in 2024.
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Hot Drinks
This report originates from Passport, our Hot Drinks research and analysis database.
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