United Arab Emirates Instant Coffee Market - Forecasts from 2024 to 2029

United Arab Emirates Instant Coffee Market - Forecasts from 2024 to 2029

The United Arab Emirates instant coffee market is estimated to reach US$173.703 million in 2029, with a CAGR of 12.12%, from US$98.055 million in 2024.

The market is projected to show considerable growth during the forecast period, primarily attributed to the growing health concerns and steps undertaken by health authorities and media to curb the consumption of sugary and unhealthy drinks. Moreover, the general population's preferability to consume coffee during entertainment and small gatherings is further boosting the demand for instant coffee products. For instance, in order to launch their products in the GCC region and the markets of the UAE, Filipino firms Oh So Healthy Snacks and Pacquiao Coffee have struck distribution agreements with SandBox.

Moreover, rising awareness regarding instant coffee’s benefits such as time-saving and convenience is further boosting its demand. Furthermore, growing coffee and tea centers across the country are also contributing to the expanding demand for instant coffee.

Additionally, there is a considerable demand for domestic coffee consumption among the middle class in the region as they are more prevalent among buyers because it is more convenient to drink than other types of coffee. The growth of the market is also promoted by the product's adaptability to a wide variety of consumers as well as the capacity to be provided through various diverse distribution channels also encourage the consumption of in-home choices.

MARKET DRIVERS:

The rising demand for flavoured coffee is expected to bolster the UAE market expansion.

The premiumization of the instant coffee business has been facilitated by the rising emphasis on distinctive, authentic flavors and diverse functional qualities of coffee. Designing authentic flavors for instant coffee is becoming more important to UAE artisan brands. Companies are using more flavors that cater to regional palate preferences.

There is a consistent demand for flavored coffees in the UAE. From the viewpoint of supply, businesses are giving more emphasis on acquiring coffee ingredients to enable customers to create and cook the beverage that is optimal for them. Moreover, in order to innovate and explore, the businesses are growing their portfolios through mergers and acquisitions and product launches.

Additionally, as per the report data by the Business Registration and Licensing sector of the Department of Economy and Tourism of UAE, Dubai has strengthened its reputation as a global center for dealing coffee as a commodity There has recently been a push for specialty shops in UAE. Consumers prefer to drink coffee at specialized coffee shops because they are actively looking for certified coffee goods to ensure the legitimacy of their coffee purchases.

The opening of specialty stores in the area is being aided by the availability of more coffee options and the removal of limits on choosing the best coffee. For instance, in May 2023, the café On Two started serving customers in Dubai's Mall of the Emirates. The location offers visitors convenience, privacy, comfort, and class while showcasing a distinctive luxury ambiance and an innovative variety of premium coffees. Further, the need for a complex coffee flavor profile and a rise in consumer behavior that values high-quality coffee are both contributing to the forecast period's growth in the instant coffee market in the UAE.
A growing utilization of online platforms is expected to propel the UAE instant coffee market growth.

There has been a boost in online shopping in UAE which has led to a rise in people buying instant coffee from online platforms. The number of internet users within the country is rising and this is driving an increasing number of users utilizing online platforms for coffee purchases. According to information from the World Bank in 2022, Internet users in the Middle East region accounted for about 206 million consumers.

Also, the role of the government has been significant in boosting online services in the UAE. In February 2023, the UAE government started the Emirati initiative, which incorporates a single window platform for giving services to UAE citizens through the Dubai Now application.

The government gradually made more services available online. As a result, the UAE was ranked first in the Arab region and 13th globally in the eParticipation index according to the UN’s E-Government Development Index 2022 covering 193 countries. These initiatives have led to a revolution in UAE and made people use online services more, and are expected to boost the instant coffee demand over the forecast period. The rise in literacy rate has also led to an increasing number of people using online portals for shopping. The e-commerce sector in UAE can boost the online segment customers for the Instant coffee market in the forecast period. This is due to the fact that it holds internet penetration of more than 90% throughout the country.

Furthermore, according to Visa transaction data, the UAE shopper is among the top spenders online. In the wider Middle East, North Africa, and South Asia (MENASA) region, the UAE represents the biggest annual spend per online shopper at $1,64813, with growth projected through 2020 at 29.6 percent. Also, card payments continue to grow in the UAE, by 9.4% in 2022 following the post-pandemic recovery of the economy. These factors represent favorable prospects for the growth of instant coffee markers in the UAE till the forecast period.

Market Segmentation:

The UAE Instant Coffee Market is segmented and analyzed as below:

By Type
Freeze-Dried Instant Coffee
Spray-Dried Instant Coffee
Others
By Distribution Channel
Offline
Food Services
Retail
Supermarket/ Hypermarket
Convenience Store
Others
Online
By Province
Dubai
Abu Dhabi
Sharjah
Others