Improving Quality of Life Creates Desire for Chocolate Products in the United Arab Emirates
By: Alex Lumley
Produced & edited by: Olivia Miltner
The people of the United Arab Emirates are growing sweet teeth at alarming rates, as the chocolate market within the country is expanding at a level that might make even Willy Wonka crave something sour for a change.
Several reports by TechSci Research have shown that the company’s interest in chocolate-based goods has been rising steadily and is set to experience even higher rates of growth than previously predicted over the next half decade.
That research company published a report in August of 2014 projecting that the nation’s chocolate market would experience a compound annual growth rate, or CAGR, of roughly 6 percent between 2014 and 2019.
|A display of chocolate taken by a tourist traveling to the UAE. |
Photo courtesy Angelina Earley via Flickr.
TechSci’s report classified chocolate products into three different categories: countlines, molded bars, and boxed chocolates. Countlines, which are chocolate bars containing wafers or caramel, held UAE market dominance in 2014, and were projected to continue dominating the market between 2014 and 2019.
The report predicted that boxed chocolate sales would increase at a faster pace, as members of the more elite class preferred these more premium, expensive chocolates that were beginning to gain more prominence as international vendors gained a stronger foothold within the region.
A second follow-up report generated in February of 2016 by the same research company projected the CAGR of the UAE’s chocolate market between 2016 and 2021 had increased to eight percent, a significant leap from the report just 18 months earlier.
So what’s to blame for this sudden interest in all things chocolate? The report attributes several factors, chief among them an increasing number of young people in the country, a growing per capita income, and an improved national standard of living that makes chocolate less of a luxury good and more of a commodity available to all.
|People shop at a mall in Dubai, UAE. |
Photo courtesy Andrey Papko via Flickr.
The major chocolate companies engaged in a battle for market dominance in the UAE include Mars GCC, Ferrero SpA, and Nestlé Middle East. According to a TIME magazine piece written by Lina Khan, two of these three companies (Mars and Nestlé) along with Hershey form the “chocolate oligopoly” that controls the industry in the United States and prevents newcomers from introducing their chocolate products into the US market. TechSci’s research does not list Hershey as a player within the UAE market, thus Hershey seems to be one of the only American players that hasn’t yet penetrated the UAE market.
Chocolate's Potential Sweet and Sour Impacts on Health
Sarvy Geranpayeh wrote a report for the Gulf News last September that outlined the problem of obesity within the United Arab Emirates. Geranpayeh based the story off of a survey by Zurich International Life, which found that close to 50 percent of UAE residents were considered “overweight” based on their BMI, and 13 percent could be classified as “obese” with a BMI over 30. The average UAE citizen at the time was classified as “overweight” with a BMI of just over 25.
"Close to 50 percent of UAE residents were considered 'overweight' based on their BM."
|High rates of obesity can be found in both the U.S. and the UAE.|
Photo courtesy Tony Alter via Flickr.
Although some might think that chocolate and other luxury items could be contributing to this perceived weight issue in both countries, the reports published by TechSci seem to disagree with such a hypothesis, at least in part.
The 2016 report said the demand for dark chocolates in the nation is on the rise because of health benefits associated with the food. The research conducted by TechSci asserts that the antioxidants found in dark chocolate help to prevent cardiac diseases that could be onset by problems related to weight, which helps to explain the rise in interest within the United Arab Emirates.
"It would seem that the market for chocolate in the UAE is showing no signs of slowing down."Although dark chocolates are supposed to be helpful for those with cardiac-related health issues, TechSci’s reports still count those same issues as a challenge the growing market will face in the UAE. The research report lists other problems the UAE market continues to face as ever-changing raw material prices as well as a dependency on markets to supply materials that aren’t always reliable.
Despite these challenges, it would seem that the market for chocolate in the UAE is showing no signs of slowing down, as illustrated by the increase in the compound annual growth rate between August 2014 and February 2016. What remains to be seen is whether the market in the UAE can become as dominant and prominent as it is in the United States, and what other markets for goods previously considered “luxury items” may develop in the country as its population becomes younger, wealthier and more globalized.