U.A.E. consumers relish U.S. savory snacks - United Arab Emirates

Whether you call them chips, savory snacks or extruded potato and corn products, these U.S. foods dominate the upper range of the savory snack food market in the trade-strategic United Arab Emirates (U.A.E.).

Located between Oman and Saudi Arabia on the Gulf of Oman and the Persian Gulf, this transshipment hub re-exports 60-70 percent of its agricultural imports to its Gulf region neighbors and Africa, India and the former Soviet Union.

U.S. snack food exporters currently enjoy a 15-percent share of an estimated $30 million a year export business in this duty-free market. Savory snacks make up $340,000 of the $4.5-million U.S. snack export market to U.A.E. In 1996, the U.S. share of the snack food market jumped 37 percent from the year before.

Due to increases in Western-style eating, local population and tourism, future growth in the savory snack sector is expected to continue at 15 percent for the next few years, following a twofold increase over the last five years that brought consumption up to 10,000 metric tons per year.

Domestic manufacturers also managed to double their production during this time, conquering a 75-percent market share in the process. Potato chips account for about 40 percent of this production; corn products, 35 percent; the remaining 25 percent comes from potato, corn, rice and other products. (Some of these products also come from the United States.) Tomato and chili are the most popular flavors.

Imported products from neighboring countries and Asia compete in price and quality with local production.

Craving for U.S.-Made

U.S. savory snacks, known for their high quality, offer the widest variety of snacks with an added benefit over other producers - large-sized bags (300 to 420 grams), popular with families and institutional buyers.

European snacks, mostly from Germany (Bahlsen is a popular potato chip brand), pose limited competition for U.S. products. Those from Asia, being generally lower in quality, primarily compete against locally produced snacks.

Youngsters, Tourists Munch Out

Demographics suggest that there's room for more noshing; annual per capita consumption of savory snacks is about 2 kilograms a year. Consumers below 18 account for about 60 percent of snack food consumption. Price figures significantly in their youthful buying decisions, while quality is not a major decision variable and brand loyalty is minimal.

As in other world markets, low-fat and other touted health snacks have gradually gained consumer acceptance.

Peak consumption occurs between September and June - while school is in session and the tourist season is in full swing. Over the summer, consumption declines significantly due to the tourist off-season and absent, vacationing residents.

Be Sure To Highlight U.S. Origin

Manufacturers should emphasize the U.S. origin of their products. Adult consumers appreciate the high quality, safety and convenience of U.S. foods enough to pay a higher price for these products.

Promotional events and advertising also help boost savory snack consumption. Distributors and retailers are particularly responsive to suppliers willing to help promote their product.

Distribution System Works Well

There are three principal methods of distribution:

* Directly by importers and producers to wholesalers and retailers. The large retail companies import directly and distribute to competing retailers.

* By van operators who purchase directly from producers or importers and distribute under commission, primarily to small convenience stores.

* By companies that buy in bulk from different local manufacturers, then mix and pack products under their own brand names.

Locally produced snacks packed in 10- to 50-gram packages dominate savory snack sales in small convenience stores, and are finding their way into Western-style supermarkets.

High-end snack products, in 300- to 420-gram bags and canisters of varying weights, mostly sell in Western-style supermarkets, upscale hotels and restaurants.

The retail food industry in the U.A.E. is very competitive, with 10 major companies dominating the sector. To streamline operations and reduce costs, many regional companies centralize their purchasing and distribution activities.

New-to-market U.S. suppliers are encouraged to work with an established importer capable of servicing major retail. outlets and hotels. Do expect markups of 15 percent over import price from wholesalers and of 20 percent over wholesale price from retailers.

RELATED ARTICLE: Labeling: Regional Gulf Standards

Although regulations require food labels to be printed in Arabic, English-only labels are still accepted. Bilingual labels are permitted (e.g., Arabic/English), provided one of the languages is Arabic. Bilingual labels or Arabic stickers must not contradict or cover information on the original label. No picture or recipe requiring pork or alcohol is allowed. Labels must contain:

* Product and brand names.

* Ingredients, in descending order.

* Additives, using their "E" number.

* Origin of all animal fats.

* Net content in metric units.

* Production and expiry dates.

* Country of origin.

* Manufacturer's name and address.

* Special storage and preparation instructions, if needed.

Shipping cartons must include product and brand name, number of units, unit weight per product, manufacturer's name and address, country of origin and production/expiry dates matching the product.

Shelf-life standards for food products are strictly enforced, with snacks in canisters allowed nine months and snacks in bags given six months. Production/expiry dates must be engraved, embossed, printed or stamped in indelible ink on the original label or primary packaging.

Mohamed Taha is an agricultural specialist with FAS' Agricultural Trade Office in Dubai. Tel.: (011-971-4) 314-063; Fax: (011-971-4) 314-998; E-mail: [email protected]

COPYRIGHT 1997 U.S. Department of Agriculture
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