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Expats Drive UAE Packaged Wheat Flour Market
As a being staple food, demand of wheat flour has always remained constant in theworld, most particularly in the Asian region. However, in the country like UAE, where 88% population is of expatriates and among them 70% are Asians for whom the wheat flour remained one of the prime staple food, has created a lucrative market for packaged wheat flour not only for the local players but for foreign entrants as well.
According to IKON’s estimates, during last fiscal the retail market of packaged whole-wheat flour in UAE valued at around AED 650 Million, growing at 2-3%. Apart from liberal trade policy and rising disposable income, the key driver of rising packaged wheat flour consumption is lack of trend of grinding wheat at home or at traditional Chakkis (flourmills) as like in India, consumers in the UAE has to rely on the packaged products and flour products are not exceptions.
The market is flooded with a mix of local and imported brands and there are more than 20 brands in packaged flour segment among which AL Baker, Datar, Grand Mills, Emirates wheat, etc. are major local UAE brands where are Aashirvaad, Shakti Bhog, Elite, Samrat, Rk’s, Brahmins etc. are major imported Indian brands. There are a couple of brands available from Pakistan and Bangladesh as well. For wheat flour, it's IFFCO’s ‘Al Baker’ presumed to be the market leader with one of the highest occupied shelf space, having almost 70% market share and rest 30% occupied by other local and imported brands together.
In UAE, the retail distribution remains one of the biggest challenges for marketers though the retail landscape has changed drastically from a very old culture of traditional souks to modern retailing. The retail market consists of big hypermarkets, the self service stores or mid size supermarkets and the small groceries (bakalas), mostly cater to consumers living in the vicinity of their areas. The packaged wheat flour generally distributed via all the types of outlets, though the brand listing fees and annual rebate charged by the types of outlets and pricing differs significantly. However, the bakalas, which are approx 4500 in numbers play a significant role in brand success in the UAE as the majority of the consuming class prefer to buy from nearby bakalas.
Among the consuming class, Indian, Pakistani and Bangladeshi that are more than 50% of expat population remain the major consumer of packaged wheat flour. Apart from wheat origin, price and store location, freshness of the product is the main factor affecting choice of brand for the consumers in UAE. This is one of the main reasons; irrespective of higher price, the local brands who are having own flour mills are more successful than imported brands from India. However, establishment of packaging units locally has helped few foreign brands in penetrating the market successfully.
Apart from product benefits, particularly health benefits, availability, packaging design and marketing communication play a significant role in marketing success of new brands in the UAE market. The majority of brands communicating wheat flour as ‘Chakki Fresh Atta’ and now that itself became a brand name in the market. Softness and Puffiness of the rotis (Indian flat bread) are the key results major consumer segments expecting from the wheat flour brand, which become common positioning tagline of the majority of the brands. New brand need to workout smartly on the positioning of their brand in this crowded market and focus more on occupying a maximum share of shelf with an optimal pricing strategy to gain remarkable share of stomach.
The recent trend of marketing fortified wheat flour (added extra nutrition) and HALAL certified food products helped international marketers to gain the faster market acceptance. The fortified wheat flour is becoming value added and differentiating factor for the brands. Also, as a being, Islamic country, the trend of HALAL food is increasing and consumers are becoming more conscious of the HALAL mark on food products.
Due to ever changing expat population, the demographics in UAE keep on changing. As a result, the varied ethnicity of the population makes the market of packaged wheat flour flourishing in UAE. The affordability, acceptability and accessibility of product are the keys to success for making remarkable presence and sustainable growth in highly competitive wheat flour market in UAE.
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