Emirates Food and Beverage Business Group and Nielsen IQ Insights detailed their success in the recent Emirates Food and Beverage Annual Report.
“The beverage category in particular has shown significant growth post-COVID-19 from Q4 2021,”Speaking at a live event, NielsenIQ Director SMB Adeel Durrani highlighted the report’s findings.
“This can be attributed to increased tourism from Expo 2020 Dubai and other social events that help stimulate demand, [in addition to] The performance of smaller local players in the sector.
“We found that the industry is now effectively dominated by these smaller players, with the top 31 to 100 manufacturers growing at twice the rate (14.7%) as the overall category average (7.8%).”
These smaller brands included drinking water brands Lago and Abant, which led the premium water category, up about 17 percent; and Freez and Rita, which led the premium soft drinks category, up 134 percent overall.
“The main drivers of growth in the category are premiumisation, innovation and increased reach — [but when looking] In the water sector, it is clear that local players are dominating. “he added.
“That said, in the sports drink segment, which is growing at 15%, the global giants remain dominant, notably Red Bull – resulting in the brand being the only one in the market to raise prices (2%), while all others Both are increasing prices. Offer about 4% price discount.”
Prices for the entire sports drinks segment fell by an average of 3.8%, but prices increased in most other segments, such as juice (up 10.3%) and coffee (up 12.7%), resulting in a category average price increase of 2.4%. two years ago.
Another key performance in the UAE market is the snacks category, which recorded an overall average growth rate of 15.9% last year, second only to the baked goods category.
“Snacks have become the second most prosperous basket in the market, led by chocolate and biscuits, driven by rising consumption and prices.”Durrani said.
“Chocolate in particular grew at 20% as consumption increased by 11%; top performing brands included M&Ms and Best of Minis.
“The performance of private label products is also interesting in the snacks category, where we saw private label outperform the category average with growth of 17.8%, particularly in nuts and biscuits.
“Overall, it’s clear that consumers are still buying snacks (whether sweet or salty) on a regular basis, despite significant price increases in the category such as 10.8 per cent for salty snacks and 15 per cent for biscuits. to two years ago.
“This has also led to an increased preference for premium and ultra-premium products, as mass products have also been hit by price increases – meaning brands such as Rocher, Loacker and Barcel [doing well] in each respective market segment. “
Bakery – growth trend uncertain
The bakery category emerged as the best-performing category in the UAE in terms of growth, but this is largely attributable to higher prices and other economic reasons, making the underlying growth trend less clear than it was before the pandemic.
“Bakeries are the fastest growing category in the food industry, driven by strong consumption and rising food prices – with significant growth due to factors such as inflation and rising input costs.”he added.
“The growth here can also be attributed to changes in consumer preferences [but once again this can be linked back to economic concerns] As consumers increasingly choose baked goods as an economical alternative to more expensive foods. “
For example, one of the best-performing bakery products in the market is the croissant, which is seeing increasing demand, not only as a snack, but as a cheaper breakfast food than cereals, whose prices have skyrocketed.
“The high-end segment is the only segment in the bakery industry that is growing [with consumers adjusting] new bread prices and to associate this segment with higher quality and therefore be willing to pay a premium,”he said.
“Quality bread brands like Yaumi and Lusine [have seen growth] Croissants are up 19.3% overall, although overall category prices are up 8.5% compared to two years ago.
“The health factor plays a big role here, with consumers increasingly looking for baked goods made with natural ingredients and free from additives and preservatives.
“[But it should be noted that] Larger players have thrived so far due to their ability to adapt to changing market conditions, with top five market players such as Almarai contributing 23.7% growth, while smaller players not in the top 100 With a -47.6% decline and private label bakery growing by just 1%, it is clear that agility is critical to driving growth in this market. “