By Mohamed Ezz and Emma Rumney
CAIRO/LONDON (Reuters) – Egyptian Mohannad Abdelazeem, 35, would not drink alcohol. However he does devour three or 4 cans per day of Moussy and Fayrouz – alcohol-free beers.
Brewers together with Carlsberg (CSE:) and Anheuser-Busch InBev say curiosity is rising in such booze-free brews throughout the Center East and North Africa, presenting alternatives in a area with among the lowest alcohol consumption charges globally.
Reuters spoke to eight Egyptian customers, shopkeepers or cafe house owners – together with Abdelazeem – who stated they or their prospects have lately switched to non-alcoholic beers, ditching U.S. tender drinks manufacturers like Pepsi and Coca-Cola (NYSE:) as a result of they see them as supportive of Israel following its bombardment of Palestine.
PepsiCo (NASDAQ:), which acquired Israel-based SodaStream in 2018, and Coca-Cola didn’t reply to a request for remark.
There may be additionally a broader shift in shopper tastes underway, some executives say.
AB InBev has seen demand for zero-alcohol brews rising amongst locals in some Center Jap nations, together with Saudi Arabia, based on Jason Warner, its CEO for Europe and the Center East. Gross sales to vacationers and expatriates have additionally grown.
AB InBev launched its flagship alcohol-free beer Corona Cero in Saudi Arabia within the first quarter. Saying the deliberate launch in September 2023, Brian Perkins, AB InBev’s head of Western Europe, stated Corona Cero supplied “new frontiers of development and model constructing in enlargement markets”.
Abdelazeem, a genetics researcher, stated he used to drink seven or eight cans of Pepsi or Coca Cola every single day, however frightened about its well being impacts. He sees drinks like Carlsberg’s Moussy as being good for digestive well being and stopping kidney stones, including his complete household had now made the change.
“Actually, we prefer it much more given its well being advantages,” he stated.
Moussy is made by avoiding alcoholic fermentation, as a substitute of by eradicating alcohol afterwards as is widespread with many non-alcoholic beers. Carlsberg refers to Moussy as a non-alcoholic beer, although it’s marketed as a malt beverage in Egypt, the place it has been bought for 30 years.
Whereas Carlsberg stated rising curiosity in zero-alcohol brews introduced an “alternative” within the Center East and North Africa, they have been unlikely to make any substantial contribution to revenues any time quickly.
“Culturally it’s going to take time for folks to be snug with the notion that it’s a beer,” CEO Jacob Aarup-Andersen instructed Reuters in an interview earlier this 12 months.
Carlsberg’s groups have been working to develop markets within the area, however this was a long-term endeavour, he added.
AB InBev is targeted on interesting to current beer drinkers, who presently drive zero-alcohol gross sales globally, executives instructed Reuters.
It sees demand for non-alcoholic beer within the Center East principally concentrated in worldwide venues like lodges and western eating places. Whereas traits in cosmopolitan cities are likely to unfold over time, AB InBev had no plans to attempt to drive uptake, Warner stated.
Heineken (AS:)’s web income grew by upwards of 40% in Egypt within the first half of this 12 months, partially because of gross sales of Fayrouz. The corporate doesn’t break down its outcomes by nation and declined to supply additional particulars.
“PIVOTAL PERIOD”
Non-alcoholic beers stay a small a part of brewers’ revenues, however are more and more central to technique as they provide development. To date, that has principally been pushed by increasing the alternatives for current drinkers to sip on beer manufacturers, comparable to throughout working lunches.
The executives’ feedback, nonetheless, point out potential for zero-alcohol brews to recruit new prospects in nations with massive populations that brewers have barely penetrated so far.
Whereas all brewers function within the Center East and North Africa, their beer gross sales in lots of nations are targeted on a distinct segment market of travellers and expatriates – which is rising as tourism will increase.
Manufacturers like Carlsberg’s Moussy and Heineken’s Fayrouz, in contrast, have focused the native inhabitants.
Carlsberg commenced native manufacturing of Moussy in Egypt in 2023, and has additionally constructed a neighborhood sourcing hub in Jeddah, Saudi Arabia, the place it says Moussy and one other Carlsberg model Holsten maintain over 50% of the zero-alcohol beer market.
It has developed new flavours, together with lemon and mint, a well-liked style domestically.
“We’re at a pivotal interval within the Center East the place native preferences and aspirations are altering quickly,” stated Alexander Hauberg-Jensen, Carlsberg’s vp for Center East & Africa.
Carlsberg, which sells tender drinks in addition to beers, plans to broaden its portfolio to incorporate different non-alcoholic drinks, he stated.
AB InBev’s chief advertising and marketing officer Marcel Marcondes stated the corporate was not making any particular effort to develop in Center Jap markets, which aren’t a precedence and the place it doesn’t promote.
The corporate works to make sure product is on the market to satisfy demand and supply companions with instruments to serve its drinks properly, comparable to glassware, Warner added.
CULTURAL BARRIERS
Even oblique promotion of alcohol is prohibited in Gulf nations, together with the United Arab Emirates, and it’s unclear if promoting a zero-alcohol model of an in any other case alcoholic model would class as such, stated David Yates, Companion and Head of Digital & Information at company legislation agency Al Tamimi & Firm.
Corporations must seek the advice of rigorously with authorities to grasp what advertising and marketing, if any, is permitted, and even then danger offending conservative customers, he added.
Any vital cultural shift is generations away, stated Laurence Whyatt, analyst at Barclays, including the model consciousness and pursuit of moderation that drive zero-alcohol gross sales elsewhere don’t exist in areas the place most don’t drink.
“I am not holding my breath,” he stated.
In some nations, zero-alcohol brews are rising for various causes, comparable to in Egypt the place they’re perceived to be good for digestion, stated Alexandra Molokova, analysis analyst at market analysis agency Euromonitor Worldwide.
This presents a possibility for brewers however they should adapt their methods and pricing to replicate these differing motivations, added Susie Goldspink, Head of No- and Low-Alcohol Insights at beverage market analysis agency IWSR.
Most prospects within the area would in any other case be consuming a tender or sizzling drinks – far cheaper than the alcoholic beers brewers normally value consistent with, she stated, including well-known manufacturers like Moussy have the higher hand.