By Mohamed Ezz and Emma Rumney
CAIRO/LONDON (Reuters) – Egyptian Mohannad Abdelazeem, 35, would not drink alcohol. However he does eat 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 a number of the lowest alcohol consumption charges globally.
Reuters spoke to eight Egyptian customers, shopkeepers or cafe house owners – together with Abdelazeem – who mentioned they or their prospects have not too long ago switched to non-alcoholic beers, ditching U.S. comfortable 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 international locations, together with Saudi Arabia, in keeping with 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. Asserting the deliberate launch in September 2023, Brian Perkins, AB InBev’s head of Western Europe, mentioned Corona Cero provided “new frontiers of growth and brand building in expansion markets”.
Abdelazeem, a genetics researcher, mentioned he used to drink seven or eight cans of Pepsi or Coca Cola every single day, however fearful 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 entire household had now made the change.
“Honestly, we like it even more given its health benefits,” he mentioned.
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 mentioned rising curiosity in zero-alcohol brews introduced an “opportunity” within the Center East and North Africa, they have been unlikely to make any substantial contribution to revenues any time quickly.
“Culturally it is going to take time for people to be comfortable with the notion that it is a beer,” CEO Jacob Aarup-Andersen advised 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 concentrated on interesting to present beer drinkers, who at present drive zero-alcohol gross sales globally, executives advised Reuters.
It sees demand for non-alcoholic beer within the Center East largely concentrated in worldwide venues like motels and western eating places. Whereas tendencies in cosmopolitan cities are inclined to unfold over time, AB InBev had no plans to attempt to drive uptake, Warner mentioned.
Heineken (AS:)’s web income grew by upwards of 40% in Egypt within the first half of this 12 months, partially due to 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 largely been pushed by increasing the alternatives for present drinkers to sip on beer manufacturers, reminiscent of throughout working lunches.
The executives’ feedback, nonetheless, point out potential for zero-alcohol brews to recruit new prospects in nations with giant populations that brewers have barely penetrated to this point.
Whereas all brewers function within the Center East and North Africa, their beer gross sales in lots of international locations are centered 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, against this, 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 preferred style regionally.
“We are at a pivotal period in the Middle East where local preferences and aspirations are changing rapidly,” mentioned Alexander Hauberg-Jensen, Carlsberg’s vice chairman for Center East & Africa.
Carlsberg, which sells comfortable drinks in addition to beers, plans to increase its portfolio to incorporate different non-alcoholic drinks, he mentioned.
AB InBev’s chief advertising and marketing officer Marcel Marcondes mentioned 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 obtainable to fulfill demand and supply companions with instruments to serve its drinks effectively, reminiscent of 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, mentioned David Yates, Accomplice and Head of Digital & Information at company regulation agency Al Tamimi & Firm.
Corporations must seek the advice of rigorously with authorities to know what advertising and marketing, if any, is permitted, and even then danger offending conservative customers, he added.
Any important cultural shift is generations away, mentioned 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’m not holding my breath,” he mentioned.
In some international locations, zero-alcohol brews are rising for various causes, reminiscent of in Egypt the place they’re perceived to be good for digestion, mentioned 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 ingesting a comfortable or scorching drinks – far cheaper than the alcoholic beers brewers often value consistent with, she mentioned, including well-known manufacturers like Moussy have the higher hand.
