Abdulrahman Al Ansari examines new figures which suggest that the United Arab Emirates’ (UAE) chocolate market will record significant growth in the next five years.
Indian market research firm TechSci Research has previously suggested that the UAE’s chocolate sector would record a compound annual growth rate (CAGR) of 6.09% between 2014 and 2019. However in its latest report, the company has released an even more positive forecast.
Online regional news portal Gulf Business reports that TechSci now believe that the UAE’s chocolate industry will record CAGR of 8% between 2016 and 2021. The company attributed this expansion to several factors. These included rising ‘per capita expenditure’ in the UAE, the country’s expanding youth population and increasing seasonal demand for confectionary.
Also, TechSci Research determined that demand for premium chocolates is expanding rapidly in the Emirates. This has been supported by the rising practise of consumers buying chocolates as gift items for special occasions such as public holidays. The company also argued that due to health concerns, demand for anti-oxidant rich dark chocolate is booming in this part of the world.
International and domestic
TechSci Research also attributed this expansion to entry of new domestic and international companies into the Emirati chocolate market. Commenting on this, the firm’s research director, Karan Chechi, said: “The UAE’s chocolate market is becoming an attractive destination for international players [such as Nestle Middle East], especially those who are offering high-end products.”
Meanwhile, the report also looked at the domestic chocolate market. This can generally be divided into three categories; countline, moulded and boxed. ‘Countline’ chocolate bars are those which contain caramel or wafers. They’re popular with Emirati consumers under the age of 25 and dominated the sector last year. TechSci Research expects this to continue over the next five years.
But the study also noted that the growing demand for premium chocolate among high income consumers in the UAE sits more in the boxed segment of the market. Many producers of boxed chocolates are introducing innovative and attractive packaging for their products. TechSci Research argued that these two factors should allow the boxed chocolate segment of the market to record the most rapid pace of expansion between 2016 and 2021.
The fact that the premium section of the UAE’s chocolate industry is expected to record the most rapid pace of expansion in the next five years is significant. It correlates with other research which suggests that UAE citizens have a taste for luxury products. Data from consultancy Euromonitor International indicates that the UAE’s luxury goods market grew by 9%, to reach Dh15 billion, in 2014.
Euromonitor International forecasted that the UAE’s luxury goods sector growth would dip to 7.5% in 2015. Furthermore, management consultancy Bain and Company Middle East expects the sector to expand by around 8% in the next few years. Therefore, the Emirati luxury goods market won’t attain the impressive expansion figures it recorded over the previous few years, but it will keep growing. Consumers probably would not spend on luxury items such as boxed chocolates if they believed that hard times were on the horizon for the Emirati economy.
About Abdulrahman Al Ansari
Abdulrahman Al Ansari has more than 18 years of experience in the global financial services industry. He serves as the chairman of a number of reputable financial firms including AMA Investment Holding and Bid Capital Management Consultancy.
Abdulrahman’s professional portfolio encompasses a diverse range of sectors from commodities and natural resources to education, healthcare, oil & gas and investment banking. He has earned a reputation as an innovator, who consistently develops new ideas and solutions to address the complex and demanding challenges which confront his clients every day. Over the years, Abdulrahman has cultivated a special interest in the continued economic and community development of the UAE.