UAE Reduced Sugar Food Beverages Market Report: Size, Share, Growth Drivers, Trends, Opportunities & Forecast 2025-2030

UAE Reduced Sugar Food Beverages Market valued at USD 1.1 billion, driven by health consciousness, diabetes prevalence, and government tax initiatives for low-sugar options.

The UAE Reduced Sugar Food Beverages Market is valued at USD 1.1 billion, based on a five-year historical analysis. This growth is primarily driven by increasing health consciousness among consumers, a rising prevalence of lifestyle-related diseases such as diabetes and obesity, and robust government initiatives promoting healthier dietary choices. The surge in demand for reduced sugar beverages is further supported by product innovation, reformulation efforts by major brands, and the introduction of new low- and zero-sugar options to meet evolving consumer preferences.

Key cities dominating this market include Dubai and Abu Dhabi, which are recognized for their affluent populations and diverse consumer bases. The urban lifestyle in these cities, combined with a strong trend toward health and wellness, has led to substantial demand for reduced sugar beverages. The presence of major international brands and local manufacturers in these cities, along with aggressive marketing and distribution strategies, further accelerates market growth.

The UAE government first introduced an excise tax on sweetened beverages in 2017, and in 2025 announced a transition to a tiered sugar-content-based excise tax, set to take effect in 2026. Under this regulation, beverages are taxed according to their sugar content per 100ml, incentivizing manufacturers to reformulate products with lower sugar levels. The initiative, formalized by the Ministry of Finance and Federal Tax Authority through the UAE Excise Tax Law (Federal Decree-Law No. 7 of 2017, amended 2025), is a cornerstone of the national health strategy to combat obesity, diabetes, and related health issues. Companies are actively reformulating products and investing in R&D to comply with the new tax structure and to meet consumer demand for healthier options.

UAE Reduced Sugar Food Beverages Market Segmentation

By Type:

The market is segmented into Carbonated Beverages, Non-Carbonated Beverages, Juice-Based Beverages, Tea and Coffee Beverages, Sports and Energy Drinks, Functional Beverages, and Others. These segments reflect a diverse range of consumer preferences, with carbonated and juice-based beverages leading due to strong brand presence and frequent product launches. Functional beverages, including fortified drinks and those with added health benefits, are gaining traction among health-conscious consumers. Non-carbonated beverages and tea/coffee drinks are preferred for their perceived naturalness and lower sugar profiles, while sports and energy drinks continue to attract younger demographics seeking performance and hydration benefits.

By End-User:

The market is segmented by end-user into Retail Consumers, Food Service Industry, Health and Wellness Sector, and Corporate Sector. Retail consumers represent the largest segment, driven by increased awareness and accessibility of reduced sugar products in supermarkets and convenience stores. The food service industry, including restaurants and cafes, is rapidly adopting reduced sugar options to cater to changing customer preferences. The health and wellness sector, encompassing gyms, clinics, and wellness centers, is a growing channel for functional and low-sugar beverages. The corporate sector, including workplace catering and vending, is increasingly offering healthier beverage choices as part of employee wellness initiatives.

UAE Reduced Sugar Food Beverages Market Competitive Landscape

The UAE Reduced Sugar Food Beverages Market is characterized by a dynamic mix of regional and international players. Leading participants such as The Coca-Cola Company (Middle East Division), PepsiCo, Inc., Nestlé S.A., Danone S.A., Unilever PLC, Dr Pepper Snapple Group, Monster Beverage Corporation, Red Bull GmbH, Suntory Beverage & Food Limited, FrieslandCampina, Kirin Holdings Company, Limited, Al Ain Water, Almarai Company, Al Safi Danone, Agthia Group PJSC contribute to innovation, geographic expansion, and service delivery in this space.

UAE Reduced Sugar Food Beverages Market Industry Analysis

Growth Drivers

Increasing Health Consciousness:

The UAE has witnessed a significant rise in health consciousness, with 66% of the population actively seeking healthier food and beverage options. This trend is supported by the World Health Organization's report indicating that 66% of adults in the UAE are overweight or obese. As consumers prioritize health, the demand for reduced sugar beverages is expected to grow, with the market projected to reach AED 1.5 billion, driven by this health-focused shift.

Government Initiatives for Healthier Options:

The UAE government has implemented various initiatives to promote healthier lifestyles, including the National Nutrition Strategy. This strategy aims to reduce sugar consumption by 10% as part of the UAE’s national health targets. As part of this initiative, the government has introduced educational campaigns and subsidies for healthier food products, which are expected to boost the reduced sugar beverage market significantly, contributing to an anticipated growth of AED 300 million.

Rising Demand for Low-Calorie Products:

The demand for low-calorie beverages in the UAE is surging, with a reported increase of 25% in sales of such products over the past year. This trend is driven by a growing awareness of the health risks associated with high sugar intake, as highlighted by the UAE's Ministry of Health, which reported that approximately 19% of adults in the UAE have diabetes. Consequently, manufacturers are innovating to meet this demand, leading to a projected increase in the reduced sugar beverage market by AED 200 million.

Market Challenges

High Competition in Beverage Sector:

The UAE beverage market is highly competitive, with over 150 brands vying for consumer attention. This saturation leads to price wars and reduced profit margins, making it challenging for new entrants to establish themselves. According to industry reports, the top five brands control 60% of the market share, leaving limited room for smaller players. This competitive landscape poses a significant challenge for reduced sugar beverage brands aiming to differentiate themselves and capture market share.

Consumer Skepticism Towards Artificial Sweeteners:

Despite the growing market for reduced sugar beverages, consumer skepticism regarding artificial sweeteners remains a significant challenge. A survey conducted by the UAE Food Safety Authority revealed that 45% of consumers are concerned about the health effects of these sweeteners. This skepticism can hinder the adoption of reduced sugar products, as consumers may prefer natural alternatives, impacting sales and market growth for brands relying on artificial sweeteners.

UAE Reduced Sugar Food Beverages Market Future Outlook

The future of the UAE reduced sugar food beverages market appears promising, driven by increasing health awareness and government support for healthier options. As consumers continue to prioritize wellness, the market is expected to see a shift towards natural sweeteners and functional beverages. Additionally, the rise of e-commerce platforms will facilitate greater access to reduced sugar products, allowing brands to reach a broader audience. This evolving landscape presents opportunities for innovation and growth in the sector, particularly in flavor development and sustainable practices.

Market Opportunities

Expansion of Distribution Channels:

Expanding distribution channels, particularly through online platforms, presents a significant opportunity for reduced sugar beverage brands. With e-commerce sales in the UAE projected to reach AED 20 billion, brands can leverage this growth to enhance visibility and accessibility, catering to the increasing demand for healthier options among consumers.

Collaborations with Health Organizations:

Collaborating with health organizations can enhance brand credibility and consumer trust. Partnerships with local health authorities and nutritionists can facilitate educational campaigns promoting reduced sugar beverages, potentially increasing market penetration. Such collaborations can lead to a projected increase in sales by AED 150 million, as consumers become more informed about healthier choices.