Saudis getting a taste for non-alcoholic drinks

Unsplash/Kelly Sikkema

• Saudi ‘key’ for non-alcoholic growth
• Religious and health motivations
• Vital to be truly zero-alcohol

The Saudi government’s drive to improve the nation’s health is boosting the food and beverage market in the most unlikely of places – zero-alcohol beer. 

A report by MarkNtel Advisors shows the Gulf market is growing by 7.7 percent a year. The local and international brands vying for share include Aujan Group Holding, Anheuser-Busch InBev, Heineken NV, Clausthaler, Erdinger Weißbräu, Mahmood Saeed, Moussy, 3 Horses Malt, Nirvana Brewery and Bière Des Amis. 

Recent Gulf entrants include Diageo, the producer of Guinness, and non-alcoholic spirit brand Lyre’s, whose zero-alcohol cocktails now take up nearly 10 percent of its global business. 

One of the main drivers for sales is the branding pitch that low-calorie non-alcoholic drinks are an alternative not only to alcohol but also popular flavoured malt drinks that are high in sugar content. That message is working in the UAE and now spreading around the region. 

“Trends come from the West, hit Dubai and then move on. The premium beers certainly worked here,” says Erika Blazeviciute Doyle, founder of the Drink Dry store in Dubai. 

“The Saudi consumer will become more conscious and aware of ingredients, sugar and calories. But the country developed a sweet palate, so I don’t see it happening overnight.” 

The low-calorie element is attractive to governments as they promote healthier lifestyles. Better health is a key goal of Saudi Arabia’s Vision 2030 social and economic reform plan. 

“Saudi Arabia is a key growth market for Diageo, particularly in the non-alcoholic category,” says Samer Nassar, premium core marketing manager​ for Diageo in the Middle East.

“The nation’s ongoing transformation, driven by Vision 2030, is opening up a wealth of opportunities across various sectors, including hospitality and tourism.” 

Clarity on the removal of all traces of alcohol is important in the Gulf because of Muslims who do not drink for religious reasons. European brands consider drinks with up to 0.5 percent alcohol as non-alcoholic. 

Global brands have shifted to naming their products with zero or 0.0 in their names to reassure consumers – which also avoids the risk of customs officers removing entire consignments. 

Heineken 0.0 claims to be the global leader in a burgeoning global market in non-alcoholic beers, according to its 2023 report, and rolled out the brand in the Gulf in 2020.  

“The number one driver in South Africa is drink-driving, in Europe and America it’s health, in the Middle East it’s religion,” says Karl Fielding, Lyre’s Middle East vice president.

“The region does need to be seen differently. It’s abstainers here who drink non-alcohol, so it’s a different mindset required.”

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One of Lyre’s most successful regional initiatives is a bar in the Kingdom Tower shopping mall in Riyadh where Saudis come daily for drinks with all the flavour of regular cocktails but none of the inflated sugariness of mocktails. 

Bars serving zero-alcohol beer on draught have opened in Riyadh, part of the government’s plans to open up the economy and bring in millions of foreign tourists. 

There is also speculation that Saudi authorities will allow alcohol to non-Muslims inside some hotels and special zones in the coming years, after the rules were eased for diplomats. 

Fielding said venues offering draught and craft beers would likely develop in the coming years. 

“There’s going to be more types of venues that are a bit more appealing to the younger audience,” he said, citing sports and entertainment centres.