Shifts in buying and consumption habits in the Middle East are providing Flahavan’s with both challenge and opportunity

Article appeared in issue 1, 2021

 

The Flahavan family has been milling locally grown oats in Kilmacthomas, Co.  Waterford for over 200 years and turning them into a range of porridge oats, ready-to-eat cereals, biscuits, snacks and even oat drinks. The company is the market leader in its category in Ireland and is the number-one organic oats brand in the UK. Now selling over 40 oat-based products in 21 countries, James Flahavan, business development manager, export markets, tells us what prompted Flahavan’s to enter the Middle East. 

“We had looked at the market and identified the need for a premium offering in the hot cereal category. The market was also starting to become more aware of the importance of eating good quality food that is wholesome and nourishing.” 

Flahavan’s first started selling in the Middle East in 2013 and most of the company’s sales come from the UAE, in particular Dubai and Abu Dhabi. “Our products are in distribution largely through retail outlets in the region, we have listings in the major supermarket chains in the UAE: Carrefour, Spinneys, Waitrose and online with Kibsons. 

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“We have seen some good growth coming from the UAE, with sales increasing year-on-year. We are forecasting this to continue and plan to keep investing in growing the market. We plan on gaining additional listings in our current retailers and improve distribution in these and additional retailers. In terms of marketing strategy, we have piloted a digital marketing programme this year with the support of Bord Bia (the Irish Food Board) and plan to continue our efforts in this area. When we started in the market, we saw a large increase in purchasing around Ramadan but as the market has grown, we are seeing more consistent year-round purchasing habits and volumes.”

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Flahavan’s exports nine of its hot oats products to the UAE in bag, drum or pot format, with an over-sticker label to comply with food import legislation. “We have a project currently underway which is tailoring our packaging to the needs of the Middle Eastern consumer. The project has started with several of our bestselling SKUs in the market; these packs will be more durable and suitable to hotter climates, and have Arabic labelling included on the packaging. The appeal of our products can be attributed to various factors – mainly owed to the unrivalled and unique taste of our porridge oats and our brand heritage, a company established in 1785 that has a trusted reputation for delivering a premium offering.”

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The rise of e-commerce and the shift in eating habits are among the consumer trends that Flahavan’s is monitoring. “E-commerce only accounts for 4.2% of the retail sector in the UAE currently, which is quite low compared to other countries we export to. E-commerce is estimated to grow by an average of 23% by 2022 in the region and, almost certainly, Covid-19 and the implications of lockdowns have accelerated e-commerce transactions by UAE residents. This is a trend we need to be mindful of and ensure Flahavan’s is best placed for selling online. 

“Other consumer trends predicted in the region over the next five years are the rise in vegan lifestyles, organic and free-from sectors. In the UAE, the value of meat substitute products has risen from $8.2m to almost $12m in 2019. This figure is forecasted to grow to $15.1m by 2023.

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Organic food is the largest and fastest growing food market in the UAE region, driven by high disposable incomes and an increased awareness of health issues and the benefits of organic produce. A recent study in the UAE found that 80% of the respondents agree with recommendations to improve availability, pricing and education in relation to organic produce.” 

The diversity of the region and the climate also bring challenges. “One of the difficulties is the diverse nature of the UAE population with 9.8m people, 90% of whom are immigrants. Because of this, it is slightly more difficult to understand the needs of the UAE consumer. 

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“The extremely hot climate has been challenging to the pack format currently used for some of our range, so we have had to adapt and identify packaging formats widely used in retail to counteract this. We have moved to a more robust pack format to resolve this and have simultaneously included a multilingual section to the pack.”

Know the marketplace is the key message for brands considering a move to the Middle East, he says. “Our advice would be to do a piece of consumer research, or research the market extensively through Bord Bia and other resources before considering launching in market. How your product is formatted and packaged, what marketing channels are used, what the brand’s USPs and attributes are may not necessarily be exactly replicated in the Middle East as they are in Ireland. Doing this body of research before entering the market will give you a clearer path for success. 

“We would advise attending Gulfood to have meetings with distributors and retailers, to see the current offerings in the market and to see what competitors are doing. Find a good distributor partner for your route to market. We work with Hunter Foods and Premier Brands International. Both have been instrumental in getting traction in the market and opening up the brand to multiple customers in the region.”