Interview: Tariq Ahmed Saeed Al Wahedi
How is the food and beverage (F&B) market coping with the current economic climate, and what are the major factors driving demand?
TARIQ AHMED SAEED AL WAHEDI: The growth trajectory in the retail market has significantly slowed down over the past few years against a backdrop of wide-ranging economic reforms across the region. This trend has served as a correction period for players in the F&B industry, from manufacturers to retailers, ultimately enabling us to become more resilient. To cope with the challenges, adjustments had to be made to strengthen efficiencies across the entire value chain, from manufacturing to human capital resources, which in turn allowed companies to grow more sustainably.
Whereas growth rates have declined as a result of changing consumer behaviour, there has been a marked shift in overall market awareness about premium products and the rise of a more sophisticated health-conscious consumer profile, which has opened significant opportunities for F&B players to participate in.
How are F&B producers aligning their product portfolios to cater to local preferences?
AL WAHEDI: Within GCC countries the population mix is traditionally segmented into four major groups: the local population, Arab expatriates, Asians and others. One cannot grow within such a market without relevant differentiation, as products are becoming increasingly more commoditised. Therefore, we have to track and anticipate emerging trends resulting from changing consumer attitudes. Historically, a new cycle of trends within the region would take place every three to four years; however, due to the advent of social media and growing tourism numbers, trends are emerging every few months, and F&B companies have to step up their game and innovate. Likewise, population demographics have changed in tandem with consumer requirements, leading to the rise of consumer trends that have driven the way we develop and sell products. For example, due to greater awareness of high blood pressure and hypertension, consumers have shied away from sodium-based products, which has led us to develop new offerings like Al Ain Zero, a sodium-free bottled water product. Likewise, due to a high deficiency of vitamin D within the region, which affects up to 75% of the population across age groups, we developed a vitamin D drinking water. These trends have led us to specialise on water products as the principal platform to address our consumers’ needs, encouraging more investments into new technologies to enhance the functionality of water products. Many companies are not interested in developing added-value water products as there are more attractive categories; however, as one sees sugar-based drinks being targeted with so-called sin taxes and rapid growth in consumer preferences towards fortified foods, these new product offerings offer significant opportunities.
What impacts do other GCC markets have on the expansion of Abu Dhabi’s F&B products?
AL WAHEDI: Regulations from neighbouring countries have always influenced the investments being made by F&B companies. For instance, when Saudi Arabia decided to ban water exports, it incentivised us to build our own production capacity in this country, which is the largest market in the region as well as a major trading hub. Similarly, our series of investments have focused on geographical diversification, looking at densely populated countries where economies of scale exist, and on acquisitions of assets that give us access to a good human capital base or market share. On the other hand, the UAE market remains very mature and competitive, consistently keeping F&B players on their toes; therefore, it is a prime market for us to introduce new innovative products, which are then to be exported as part of our expansion plans.
Read More from OBG
