Potential for Growth

Non-alcoholic beer is a commonly consumed and popular beverage in Islamic countries. According to Islamic law, the consumption of alcohol in any form is totally forbidden. Consequently there is a complete ban in Iran on the sale and production of alcoholic beer.

Worldwide, nearly 2 billion liters of non-alcoholic beer were consumed in 2012. The Middle East now accounts for almost a third of the worldwide sales by volume of non-alcoholic beer.

The market size of non-alcoholic beer in the Middle East is 680 million liters and Iran, Saudi Arabia, Egypt are the major markets of non-alcoholic beer. While the size of non-alcoholic beer market in Iran is still small compared with the carbonated drink market, it is expected to take up a bigger share of the market in the coming years.

The rapid expansion of flavored products have increased the consumption of non-alcoholic products especially among younger generations, who like the sweet flavors of these products.

The total supply and consumption of non-alcoholic beer products in recent years in Iran is depicted in the table below.

nonalcoholic beer

Iran’s per capita consumption of non-alcoholic beer is currently about 5.5 liters and it is expected to reach 10 liters per capita by 2021, considering the annual growth rate, consumption and negative publicity about carbonates. In recent years many consumers of carbonates shift to healthy non-alcoholic beer more frequently.

Almost 33 domestic companies are active in non-alcoholic beer production in Iran. With the introduction of flavored non-alcoholic beer in the country by introducing a wide range of flavors, from lemon to coffee, the companies has been able to expand their market share.

Non-alcoholic beer is a well-developed and established category in Iran. In spite of the fact that young Iranians are the main group of consumption of non-alcoholic beers, but the other demographics would become a new target group as a result of side effects by consumption of carbonated drinks.

The table below shows the major companies and their capacity of non-alcoholic beer production in Iran.

 

Capacity of non-alcoholic beer production in Iran

company Capacity (millions of liters)
Nominal practical
Behnoush Iran 560 225
Tehran Govar 115 1
Kilos Food industry 76 5
Danjeh Aria 24 6
Sirang Koohrang 120 10
Arpanoosh 300 67
Higer 38 2
Khoshgovar 5 0
Other 250 10
Total 1488 326

 

As a result, Iran has a great potential mainly due to its population’s demographic and geographic location. Median age of population is about 30 years old and 64% of Iran’s population is under 35 which is a strong demand for consuming of products.

New entrants as well as well-established market players should consider the geographic location of Iran which can facilitate the access to the neighbor countries with huge demand.