UAE Hot Beverages Market Report, Market Size, Market Share, Market Revenue, Market Trends & Market Future Outlook to 2029

The UAE hot beverage market is rapidly expanding, driven by premiumization, evolving consumer preferences, and digitization. The market is dominated by coffee segment which contributes to 60% of total hot beverage sales in 2024. The hospitality and food service sector play a crucial role in market, with coffee shops generating more than USD 3 million revenue aa of early 2025. E-commerce and online platforms are reshaping the hot beverage sales in the country. Online sales of hot beverages surpassed USD 50 million in 2024 owing to the rising popularity of online delivery. In addition, sustainability is becoming the key driver as more than 70% of consumers in 2024 trend towards brands that supply ethically sourced traditional ingredients with eco-friendly packaging.

Factors Affecting Growth
• UAE has one of the highest coffee consumptions per capita in the Middle East with 3.5 kg per capita in 2024. Single origin, organic and artisanal coffee is on the rise, driving the expansion of speciality coffee chains. Moreover, premium, and Gourmet coffee is also encouraging global brands to enter the market.

• Consumers are becoming health conscious and shifting towards functional, organic and herbal teas. In 2024 herbal tea grew by 9.1% driven by immunity-boosting, detox and caffeine free alternatives. Moreover, plant-based milk alternatives like almond and oat milk is reshaping the premium coffee and tea market as consumers are looking for dairy free alternatives.

• The hospitality and food service industry are a major driver for hot beverages in UAE. The rising trend of on-the-go and experience-driven consumption is increasing demand for café and local coffee shops. The popular global chains and local coffee shops are expanding their operations and proving consumers unique and regionally inspired offerings.

• Digital transformation and e-commerce is becoming the major growth driver, 35% of hot beverage sales in 2024 happened through online channels. Brands are focusing on strengthening their online presence by partnering with e-commerce platforms to meet the online demand for hot beverages. Subscription based coffee services are becoming popular providing consumers with personalized at-home brewing solutions.

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Rising Raw Material Costs and Supply Chain Disruptions
The UAE hot beverages market is facing major challenge of rising raw material costs due to global supply chain disruptions and inflationary pressures. The Arabica coffee bean prices grew by 15% in 2024 due to drought conditions in Brazil and supply constraints from Colombia and Ethiopia which are the two major suppliers of the UAE market. In addition, increased import duties and logistics costs are shrinking profit margins for retailers. The brands are changing how they price by passing the extra expense to consumers, making them less affordable, and impacting demand.

Competitive Landscape
The UAE hot beverage market is moderately fragmented, with few major players including Nestlé's Nescafé, Starbucks, and Unilever dominating the space. The market is further witnessing competition with new entrance and expansion of online retail providing consumers wide range of choices. Nestlé's Nescafé is a leading player in instant coffee segment and is leveraging its strong retail presence with over 80% brand recall rate in 2024 among consumers in UAE. Unilever's Lipton offers wide range of flavoured and herbal teas. The brand contributes to over 50% of tea sales in 2024, driven by UAE's deep-rooted tea-drinking culture. Starbucks cater premium coffee segment and operates more than 250 stores across region.

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Future Outlook
The UAE hot beverages market is set to undergo rapid transformation through 2029. The market will be driven by online retailing, with online sales expected to reach 50% of the total hot beverage sales by 2029. The brands will adopt direct-to-consumer model and subscription-based coffee services to cater the evolving consumer preferences. The trend of out-of-home consumption will accelerate the market, with coffee shop revenues expected to exceed USD 4 billion by 2029. The brands will expand their offering and provide specialty, organic, and customizable beverages to attract consumers. Sustainability will be key differentiator as green-certified beverage brands expected to grow by 20%, reflecting growing environmental concern among consumers. However, supply chain challenge will remain hindrance and brands have to diversify their sourcing strategies and explore local roasting and production options.

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Consultant at TraceData Research In their latest publication "UAE Hot Beverages Market Outlook to 2029: By Product Type (Tea, Coffee, Other Hot Drinks), By Distribution Channel (Traditional Retail (Kirana Stores, Local Markets), Modern Retail (Supermarkets, Hypermarkets), E-commerce Platforms, Cafés and Specialty Stores), and By Age Group (18-24, 25-34, 35-54, 55+)" believe that companies should integrate smart vending and offer functional wellness beverages to gain competitive edge in UAE hot beverages market.

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India Hot Beverages Market - https://www.tracedataresearch.com/industry-report/india-hot-beverages-market

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