Considering the weather, sweet taste of people and growth projections of 20 per cent in ice-cream sales by 2014, the industry seems to have a bright future. Read on to know how.
Factors such as fast demographic growth, hot weather and people preferring to buy branded ice creams are drastically transforming the Ice Cream industry in Middle East. Highlighting the growth potential of ice cream brands in Middle East Nathen Furlong, Co founder, Dessert Chill opines; “We are optimistic. The Middle East is in a melting pot that will only continue to grow for the next 30 years. We feel that the demographics, the weather and its ability to attract Global brands and Events will see it remain as a solid investment region for some time to come. Our business is a great fit for the Middle East.”
Similar are the views of Shane Lamont, Executive Director, New Zealand Natural; “We saw the Middle East as a future global hub for business, a region with great weather, a love of sweet treats and an increasing consumption level of ice cream.”
Ice cream buying trends
In Middle East and Africa, premium ice cream is mostly bought by wealthy consumers. There is a demand for low/sugar-free ice cream products from weight conscious female consumers, and diabetes prone Israelis wanting to treat their taste buds. The trend of middle/upper-class Saudi consumers liking healthy ice creams has been observed. A new range of low-sugar, vitamin-enriched, calcium or pre/pro biotic-fortified products is expected to be offered soon. Besides, the younger consumers are switching from traditional artisanal ice cream to modern packaged products. Further, the consumers now prefer more affordable indulgence products. The affordable take-home ice cream buying has also increased, boosting the penetration in region’s household formats. Therefore, ice cream brands are expected to bring in intense innovation in their product formats/flavours.
Popular Ice cream Brands
Though there is no dearth of ice cream brands in the region, some brands offering customised flavours have really grown well.
New Zealand Natural
New Zealand Natural, a 25 year old brand active in the Middle East for last three years, has over 650 outlets operating in 23 countries. The company started operations in Saudi Arabia. Later it opened its first store at The Souk in Abu Dhabi, UAE. Today it has 20 locations in Saudi Arabia with more opening soon, one outlet in the UAE with a second planned to open shortly. The company is very focused on future growth within the Middle East.
Dessert Chill
Dessert Chill was established by two British brothers Daniel and Nathen Furlong. The brand’s USP is its focus in the region’s impulse Ice Cream sector which is still in its infancy but growing rapidly. The company does not operate through stores. It has a concept of Mobile kiosk vans and has recently expanded to seven trucks. The brand is in the process of launching its franchise and looking to continue to saturate the UAE market and the wider GCC/MENA region, and emerging pockets in India.
Baskin Robbins
The USA-based Baskin Robbins, a global ice cream chain was founded by Burt Baskin and Irv Robbins. It is the market leader in Middle East, despite the growing challenges and rising commodity costs. The brand has over 500 stores in the Middle East, including135 in the UAE and is all set to open another 70 such stores this year. It has opened world's largest 5,000 sq. ft store in Jedahh. The brand has 450 ice cream parlours in Middle East with 108 stores in UAE and rest in Saudi Arabia, Bahrain, Oman etc.
Besides, there are also other ice cream brands form organsied and unorganised categories that have marked presence.
Ice Cream franchising in Middle East
The expansion model of New Zealand Natural in the Middle East is similar to which it operates in other countries except for the Riyadh based Regional Master Franchisee who looks after the region rather than just one country. This ensures more focus and timely assistance. The company can also offer its Country Master Franchisee’s multi channel opportunities such as food service products so that there are more ways to create profit for partners. According to Lamont; “We are looking for kiosk site between 18 to 22 m2. In line, high street, beach and co-branded options also work very well. Investment is normally between $40,000 and $10,000 per store depending on size and design. For Country Franchisee’s our Regional Master provides full training locally in current stores before spending time with the new Country Franchisee in their own country prior to and during opening. Single unit franchisees are trained in country. Full graphics packages are supplied with on-going support and visits from New Zealand as well.”
As for the training and support to the franchise partners is concerned Furlong informs: “We will see that the franchisee gets all the necessary training in terms of set up, operations, sales and marketing, route optimisation, social media and acquiring customers.”
Expansion strategy
Opportunity seems to be quite bright for the domestic ice cream retailers as well as the international brands in the Middle East region. But before one zero downs on expanding in the region, certain factors need to be considered. Elaborating on New Zealand Natural’s experience of expansion in Middle East Lamont, informs: “We were lucky enough to partner with International Specialised Stores (ISSCO) in Riyadh. They are professional brand builders operating numerous international and local brands within the Middle East so this really gave us a fantastic head start as well as a focused, experienced and professional Regional Master Franchisee that understood the market intimately.”
Highlighting the brand’s expansion Furlong informs: “We have gathered a tremendous amount of experience for this type of business in the region and have excellent practices and brand partners in place. We feel that we can continue our first movers’ advantage and leverage the company to the benefit of ourselves and potential investors.”
Future
The ice cream brands face several challenges while expanding in the Middle East. The biggest is to cater to varied taste requirements of the residents of different countries across the region. The demand is definitely for sweeter products. Another is to find right partners to rightly position the brand in the market. However, the future seems quite bright and optimistic for the Ice Cream companies in the Middle East. Also, franchising will help the brands to grow quickly ensuring, investment in the ice cream biz remains profitable in years to come.
