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Jul, 12 2011

GROWING APPETITE OF F&B BRANDS

From kababs to kathi rolls and gulab jamuns, and now to premium frozen yogurt, the Indian platter is rapidly growing in the Gulf. Brands like Colonel’s Kababz, Cocoberry and Khyber to name a few are set to spread the Indian flavour there. What is it that

THE Middle East F&B sector, a commercial hub for global trade, has been offering wholesome opportunities to global as well as Indian food chains to invest in the delectable space. Experts feel that the huge influx of visitors in the region for business and leisure activities along with a consistent local demand has led to the global growth of F&B brands.

Phil Broad, Managing Director at Jumeirah Restaurants LLC, UAE, says, “Dubai and the Middle East are both business and tourist hubs and have been evolving as a culinary hot spot over the past few years. So, it is only natural that franchise formats target the region. It is also a very diverse region with over 150+ nationalities and so the demand for various brands is ongoing.”

Interestingly, the F&B market of Middle East, which is predominated by European and American brands, is now witnessing a distinct change as Indian brands are taking on the coterie.

Brands that tasted success

Given the growing globalisation and substantial potential of the Middle East market, the obvious choice for Indian brands is to peddle their way to the Gulf. Take for instance the 'local halwai'-Bikanervala. The Delhi-based brand has set up a massive production base with a manufacturing unit in Dubai. Living up to its tagline, 'Pardes mein des ka swad', Bikanervala has been in the UAE market for the past several years. States Deepta Gupta, General Manager, Bikanervala Foods Pvt. Ltd, “Majority of the Indian population in the UAE encouraged us to expand in the UAE. The F&B is a growing industry and being in Dubai since the past several years, our experience with the Indian community residing in UAE has been promising. People love to have Indian food and want to explore the taste of India.”

For premium frozen yogurt Cocoberry, opting for the Middle East market was a unanimous pick, given the weather conditions and its similarity with the Indian conditions. Explains G.S. Bhalla, CEO and Founder, Cocoberry, “There are many reasons for Gulf entry. First, proximity to India and secondly, the similar customer profile. Also, the climate is hot too.”

Tempting trade prospects

Tempted to grab a quick bite of the market having diverse diaspora, a vast majority of the Indian brands like Colonel’s Kababz, Cocoberry, Khazana, Bikanervala and Khyber are eyeing a fair share of the Middle East market. Going by reports, UAE is a diverse and rapidly growing market for food and beverage products. It has a resident population of around four million and largely expatriates. UAE nationals comprise about 20 per cent of the total. A weighty presence of South Asians, comprising expatriates from India, Pakistan, Bangladesh and Sri Lanka, make up a sizeable chunk as patrons for the Indian brands. Besides, Indian brands are also gaining loyalty from western expatriates who are around 15 per cent of the population, mostly from the United Kingdom. If reports are to be believed, the UAE food market, which is currently valued at about $6.78 billion, could expect an yearly average growth of 4-5 per cent between 2011 and 2014.

Bonny Kochchar, owner of Delhi-based food joint Colonel’s Kababz, which is all set to make a move in the Middle East, says, “The expat population is predominantly Indian and majorly Asian, so it complements the food and other stuff. The food, the colour and tastes are slightly different, however, the origin of kebabs lies in the Middle East. So it's a big potential for Colonel’s Kababz there.”

Do remember, making an overseas move entails brand standardisation as well as customisation. Since most of the Indian cuisine demands a lot of home-grown ingredients like spices and raw materials, procurement predicament cannot be overruled. Along with this, localisation of food items is considered one of the vital yardsticks for success. Opines Bhalla, “Yes, we do plan to customise. We will be looking at certain amount of localisation of the product toppings and menu. In terms of décor,as our priority is on the product that we serve.” A few brand owners, however, negate this aspect. States Kochchar, “There is no need for customisation. I think it should be authentic. What you are known for selling shouldn't be diluted. The moment you do that you lose your identity.”

Satya Mukherjee, Head-Marketing, Khana Khazana Pvt. Ltd, says, “Even though there is a little bit of tweaking in the food to make it appeal to the local taste, but that apart, we clearly follow the standards of our brand. Our patronage mainly stems from the loyal fans of Master Chef Sanjeev Kapoor and all those people who love good Indian food.”

Regarding the procurement of raw materials, most of the brands plan to ship it from India. Bikanervala has already gone a step ahead and set up its own manufacturing unit in Dubai and the raw materials are sourced locally while specific items are arranged from India. For Colonel’s Kababz, it's all about the marination and mix of exotic spices. Confides Kochchar, “Basically, we have barbeques and curries. We have done our R&D and are working upon the marinating aspects. All the marinades will be ready to be used. All you need to do is to put your raw material and serve it to your customer. The marinades are packed in the best of the machines and we will pre-marinate the items from Delhi. We will simplify the operation.”

Hungry for expansion

With Indian brands already in the Middle East market and several others following suit, the hyperbole of success is resonant. While Bikanervala has expansion plans in Qatar, Oman, Bahrain and Kuwait, brands like Colonel’s Kababz and Cocoberry are hugely optimistic for success and expansion. Bhalla is sighting Dubai, Abu Dhabi and Saudi Arabia, Qatar, Bahrain, Kuwait, Oman. Informs Mukherjee, “We will soon bring in our casual dining brand, The Yellow Chilli, beginning with Bahrain. And then we have expansion plans in the Kingdom of Saudi Arabia, Kuwait and Jordan.”

The Middle East F&B industry continues to deliver double digit growth despite the downturn. All these brands with enthusiastic expansion plans are banking on the franchise format for their success. Kochchar confides, “Well, I think this is the right way of increasing your business potential. I have already been running company-owned units. It's a tough job. Manpower is the main problem while procuring capital is also one of the main issues. Franchising, whether in India or the Middle East, has its own advantages.”

Future course

No business is without failures, so a word of caution. Says Mukherjee, “Indian F&B brands should gear up to enter the Middle East market and expand the categories, which will eventually favour all Indian F&B brands. However, the focus has to be clear. Specialty always work over a generalised offering of cuisine.”

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No free flow for alcohol

Liquor business is still a distant reality, courtesy the stringent restrictions imposed. It is illegal to serve or sell alcohol to Muslims in Dubai. Restaurants, bars and nightclubs attached to the hotels serve alcohol, although on certain religious holidays, its sale is not allowed. Besides, it is against the law to drink alcohol in public places. During Ramadan, only hotels can serve alcohol.

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