While chocolate sales have fallen in traditionally successful Western markets, the Gulf is demonstrating a collective “sweet tooth”
While the Arab world is no stranger to syrup-soaked pastries, over the past few years a new, non-traditional dessert of choice—that with which to satisfy one’s “sweet tooth”—has emerged in the Gulf: namely, chocolate.
As countries like the Saudi Arabia and the United Arab Emirates continue to experience economic growth and are increasingly exposed to Western culture, the markets for chocolate therein have boomed.
In the UAE alone, chocolate sales are expected to grow a full 8 percent by 2021, according to a March 2016 report released by TechSci Research, a global management consulting firm. The report attributes the rise to growing youth populations, enhanced distribution channels and escalating consumer spending power.
As a result, European and American companies are taking notice—and action—with many having opened regional factories to facilitate the distribution of larger quantities of product.
Mars, the American-based producer of the popular chocolate bars Snickers and Milky Way, is the global leader in chocolate confectionery sales. The company inaugurated a manufacturing facility in Saudi Arabia in 2014 and according to the market-research company EuroMonitor International, Mars accounts for more than 40 percent of retail sales both there and in the UAE.
Other corporations, such as Switzerland-based Lindt & Sprungli, have likewise experienced an increase in demand for their goods. Spokesperson Sara Thallner confirmed to The Media Line in an email that the company’s regional office in Dubai reported double-digit sales growth in its most recent financial statements, largely attributable to growing demand for luxury brands.
For his part, Angus Kennedy, a chocolate expert and editor of the business trade journal Kennedy’s Confection, explained that while the Gulf is not the top up-and-coming market for chocolate, continued growth is expected in many countries. “[People in the region] are able to afford luxury items and so therefore if you’re making chocolate you can make a much more luxurious item to sell in Dubai and you make more profit,” he explained to The Media Line.
Kennedy emphasized that with greater disposable income, individuals are able to travel to chocolate-rich markets in Europe where they are exposed to new items. “People are waking up to new products and Westernization makes them move away from their standard ones,” he noted, adding that social media has also served to increase exposure.
Nevertheless, chocolate is by no means new to the region, Alan Burnett, Export Fields Manager for the Scotland-based company Tunnock’s, told The Media Line. The business started selling its products in Saudi Arabia in the 1970s and underwent an expansion in the Gulf in the 1990s, including entry into the UAE and Qatar. Saudi Arabia currently is responsible for the majority of Tunnock’s growing exports, followed by Kuwait.
“I’m well aware that what we make and sell is not one of life’s necessities,” Burnett conceded, “and I suspect that the reason for the growth is that a lot of regions in the world, their economy is improving.”
Kennedy said that while chocolate sales continue to increase in the Gulf, traditional markets in Europe and the United States have suffered as consumers have become more health-conscious. Perhaps to compensate, more businesses are considering the Middle East, as evidenced by the targeting of the region both through trade fairs and marketing.
(Dina Berliner is a Student Intern in The Media Line’s Press and Policy Student Program)