The 2008 Egyptian market for soft and alcoholic drinks is expected to increase by an average 29% in the next five years. During 2007, Egypt consumed approximately $219 million of alcoholic drinks and $683.6 million in soft drinks. In spite of foreign investment and local production the market is still young and unsaturated. With a population of 77 million, Egypt is the largest market in the Arab world. This in addition to a free trade zone between all littoral Mediterranean states and the EU is expected to be in place by 2010. The tourism sector is also growing and restaurants and hotels sector grew by 13.3% in FY 06/07 and number of visitors rose by 18.4% from last year to date.
Alcoholic Drinks: This sector is expected to grow by 20.2% in the coming five years. Growth will be fuelled by tourism, since tourists and expatriates are considered the major consumers of alcohol in the country. Egypt produces approximately 35% of its alcoholic beverages for usage in duty free shops and for the tourism industry, while 65% is produced locally. The arrival of the Egyptian International Beverage Company (EIBCO) increased competition in this sector, which could help boost value and volume sales in the future. However, Al-Ahram Beverages Company still dominates the market. Henieken became the leading company in the beverages sector in 2003 following its purchase of 97.8% stake in Egypt’s leading brewery, the Al-Ahram Beverages Company, which had a monopoly on the alcoholic beverages market of Egypt. Since the company’s privatization in 1997, the sector has undergone constant growth and is still considered to have great potential for expansion. In spite of Egypt large Muslim population, which generally avoids alcohol, sales are fuelled by the country’s tourism and entertainment industries. However, they plan to penetrate as Islamic foreign markets via their non-alcoholic malt beverage product Fairouz.
EIBCO however has set itself an ambitious market share and is planning rapid product development and more opportunities.
Soft Drinks: the outlook for this sector is more positive then the alcoholic drinks sector as it doesn’t depend mainly on tourism. The soft drinks sector is expected to grow by 38.3% in the coming five years. Bottled water sub-sector will have the lion’s share in growth, since it will benefit from a heightened awareness of hygiene and health concerns among consumers. Nestle’ has been expanding in the bottled water industry, launching Pure Life brand in Egypt in 2002 and has a market share of around 15%. Major multinationals Coca-Cola and PepsiCo dominate the country’s soft drinks sector. Sales of carbonates are high in the country, particularly among younger consumers. However, competitor’s likes Mecca-Cola managed to enter the market and increase their market share. The Beverage sector of Egypt is not yet saturated and is still open for new products and expansions.