The United Arab Emirates
A Brief Market Analysis for Italian Dairy Products
When it comes to the food and beverage industry, the United Arab Emirates is, in general, a market and not a competitor. The UAE imports around 90% of all its food products consumed; a point which can be considered self-fulfilling when only 0.6% of its GDP is made up of agricultural activity. With such a small share of its own food supply consisting of domestic production, the Arab nation represents a strong potential market for European exporters. The relatively young country has made substantial efforts in the recent decade to diversify its economy and reduce its dependence on the oil and gas industry; of which it currently holds the seventh-largest proven reserves in the world. This diversification has inevitably lead to the internationalisation of the Emirate population, and the palates of the average residents of this small, dense Arab Kingdom have grown to accommodate food items from all around the world. Italian food products, or products that bear the Made In Italy brand, are resistant to short term market volatility due to public awareness of their quality and, according to the Fondazione Nazionale dei Commercialisti – an Italian trade promotion body – its ability to intercept the demands of distant markets.
Milk products – which include Ice Cream related products – place a respectable 7th place on a list of Italian staple exports (pasta, vegetables etc). Whilst not at the forefront of Italian agri-food exports to the UAE, they do supply a rising consumer demand in the country for authentic, Italian produce. Ice cream consumption in the UAE is large; with sales expected to have exceeded AED361 million (EUR 87,543,000) in 2019. Italian contributions to this sector saw an upward trend during the 2010’s, with ice cream imported from Italy reporting a 250% increment in 2014. A special focus has been placed on the artisan ‘gelato’ – the Italian word for ‘Ice Cream’ – with several case studies showing a growing Emirate interest in this authentic Italian product.
One such case study rapidly expanded profitably across the United Arab Emirates, providing authentic Italian ‘gelato’ ice cream to satisfy the changing palates of Emirate residents. Gelato Divino, originally a small family-owned ice-cream shop in the small town of Alba; in the Piemonte region of Italy, saw its first international expansion in the UAE. Nicolas Reincke, German founder and managing director based in the Middle East, was confident of a successful expansion. From the first expansion in Dubai, Gelato Divino would be set on the global retail stage after opening over forty locations in the United Arab Emirates in just six years from 2009 to 2015. Such success can be attributed to what Dubai-based Italian chef Marco Legittimo describes as an acute effort to “tailor [Italian] offerings to suit the local palate while still offering a truly Italian experience.”. A major component of this company’s marketing strategy was highlighting that product on offer was both 100% Halal and 100% vegetarian. Indeed, the recognition on the part of the UAE authorities of the Italian Islamic Halal certification has been hailed by various trade bodies as ‘particularly positive’. Aside from specific ice cream focused establishments like Gelato Divino, Italian ice cream can be found on the menus of significantly higher-end establishments, with 33 Restaurants in Dubai and 5 in Abu Dhabi awarded Ospitalita Italiana certificates of excellence; a governmental award scheme assigned to those adhering to the highest standards of Italian culinary quality.
Made In Italy exporters also benefit from extensive supporting infrastructure when seeking to market the products in the UAE. The Italian Ambassador to the United Arab Emirates, Nicola Lener, promoted a consort of over 200 Italian food and beverage producers at the Gulfood 2020 exhibition in Dubai. At the same time, it was revealed that Italian food exports to the United Arab Emirates increased in 2019 by 11%, with dairy products seeing a 16% increase on 2018. Amedeo Scarpa, Italian Trade Commissioner to the UAE and director of the ITA Dubai Office, stated during this conference that “the United Arab Emirates is an important market for the Italian food sector”. Aside from these official channels, there are many organisations set up by the over 10,000 Italian expatriates settled in the UAE, such as the Circolo Italiano Culturale E Ricreativo (Cicer), which promote the Italian lifestyle, culture and way of life in the UAE. Exporters hoping to gain a foothold in the United Arab Emirates can expect a large array of logistical support from governmental and non-governmental organisations.
A more than 300% increase in export volume over the course of a decade is a significant logistical achievement and shows the potential of the UAE market for Italian dairy producers. However, with all the opportunities presented in this growing market there are challenges which may make the exporting of Italian dairy and ice cream products to the United Arab Emirates slightly more risky. Whilst the UAE has developed a taste for Made In Italy branded products, their citizens have yet to recognise any special nature in Italian produce (seed oil is a more popular and widely traded condiment than olive oil). A SWOT Analysis conducted for the EU handbook on the UAE food and beverage market concluded that, in the case of yoghurt, milk and other dairy products, UAE consumers, in particular Emirati citizens, tend to be loyal and have a strong preference for domestic brands.
Italian ice cream exports to the UAE amount to a relatively small share of the UAE market. Whilst on the upwards trajectory, as explained in previous statistics, Italy falls behind other nations such as France or the United Kingdom. Indeed, the total amount of milk and cream products exported from Italy to the UAE in 2019 amounted to a mere $1.22m. To put that in context, the total amount of cheese and curd exported to the United Arab Emirates, a staple and international known authentic Italian product, amounted to $13.99m; more than all other dairy items exported in 2019 combined. The difficulty in gaining a foothold in the UAE market is exacerbated somewhat by the hurdles one has to jump through before infant formulas are approved for import. For example, each food label is subjected to rigorous appraisal by the UAE Food Control Department and, should certain domestic standards not be met, additional laboratory testing may be required before the product can be approved for import. Market entry and requirements also vary from Emirate to Emirate, adding a further layer of bureaucracy to overcome if a nation-wide market share is to be attempted.
while the Italian share of the ice cream market may be lacking compared to other nations, there is a great appeal that the Italian gastronomic tradition is able to exercise in the UAE. The substantial logistical and technical support offered by various Italian trade bodies over the past decade has seen a steady rise in sales that lasted until Covid-19 put the world into hibernation. With the majority of European dairy products distributed through major hypermarkets and strong domestic industry in ice cream and other dairy production, catering would be the easiest market to capture. As regarded UAE-based Italian chef of the Stella di Mare has noted;
A dedicated business plan could successfully utilise the strengths of Italy’s brand power whilst overcoming the various trade barriers erected by such a distant, yet vibrant market.
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