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Food and beverage market in the United Arab Emirates 2011

In 2010, the United Arab Emirates was New Zealand’s 18th largest export destination for food and beverage products. New Zealand’s food and beverage exports to the United Arab Emirates totalled US$237 million in 2010.

In 2011, the packaged food market was valued at US$2.5 billion. Top categories were bakery, with over 23 percent of market share, dairy (23 percent), dried processed food (20 percent) and confectionery (12 percent).
Supermarkets and hypermarkets dominate the distribution of packaged food, accounting for 81 percent of packaged food sales, followed by small grocery retailers (10 percent).

The United Arab Emirates has a high demand for fresh foods and through local production the market meets over 80 percent of the demand for milk, almost 40 percent for eggs, 30 percent for red meat and 18 percent for white meat.

In the year ended September 2011, the United Arab Emirates was New Zealand’s 16th largest wine export destination and wine exports totalled US$4 million. In 2010 the United Arab Emirates’ wine market was valued at US$29 million with sparkling wine leading the market with 48 percent market share, followed by still light grape wine (46 percent).

Still light grape wine reported the highest volume sale of 27 million litres followed by Sparkling wine (4 million litres) and fortified wine (3 million litres).

In 2010, sales through grocery retail totalled US$8.1 billion. Hypermarkets had the largest market share of 51 percent, followed by supermarkets (21 percent), small grocery retailers (16 percent) and food/drink/tobacco specialists (12 percent). Over 70 percent of small grocery retailers are independent small grocers.

Getting your product into market

New Zealand exporters are advised to research the market thoroughly to enter the market with a firm value proposition. It is highly recommended that New Zealand firms undertake market research to gain an understanding of the product category, its competition and pricing structure.

New Zealand exporters should be aware that the United Arab Emirates is a very competitive market. The market is relatively close to the European, African and Asian suppliers.

The cost of freight added to New Zealand product makes market penetration for products without unique selling points very difficult. Unique selling factors include innovation, uniqueness in ingredients, packaging, substantiated superior quality and product customisation.

Any firms using premium pricing must have a unique selling point coupled with a firm value proposition to secure market interest.

Regulation

As a member of the Gulf Cooperation Council (GCC), most goods imported into the United Arab Emirates are subject to a standard 5 percent duty on the cost, insurance and freight (CIF) value. Alcoholic beverages, including wine are subject to special duties of 50 percent.

Opportunities

There is rising demand for high quality products as the economy recovers and more high income earners purchase premium brands. Demand for niche segments, such as organic and biodynamic wine, is expected to grow as the economy recovers.