The Gulf is emerging as one to watch for the gluten-free sector. In just-food’s series of spotlights on the next five markets manufacturers should target, John Shepherd looks at the gluten-free market is developing in the region.
The Middle East is becoming a market for gluten-free manufacturers to target and, within the region, it is the United Arab Emirates that is seen as the key destination.
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According to Chris Brockman, Mintel’s research manager for food and drink in the Europe, Middle East and Africa region, “The UAE is definitely the lead market in the region, with large numbers of relatively wealthy expats, visiting Western tourists and the very young make-up of the population at large. All this makes it quite a dynamic market.”
However, interest in gluten free is not only in retail but out-of-home too, thanks to the abundance of Western-style bakery chains that are present in shopping malls and other outlets. Brockman says bakery products are “a particularly strong category” for gluten free in the Gulf
Euromonitor International analyst David Hedin says “We have seen one bread manufacturer really break into the market [UK-based Genius Foods] and others could now follow given that they have seen good development.”
Genius Foods could not be contacted for comment by just-food on its development plans for the Gulf.
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By GlobalDatawhere “there are lots of western-style bakery chains and products”.
Euromonitor international analyst David Hedin agrees consumer affluence in the Gulf will be a key driver in the continued growth of the gluten-free sector. “There are plenty of affluent people in the UAE and the Gulf who could be interested potentially in these products,” Hedin says. “Disposable income is correlated with the consumption of all high-value goods and gluten free is definitely more expensive than conventional food.”
Hedin believes a good tactic for gluten-free manufacturers looking to gain a foothold in the UAE and the Gulf is to adopt a “basic build strategy”.
“In the UAE, this means supplying the medical sector first – catering for demand after people have been diagnosed with gluten intolerance and building a relationship at that early stage. This is a very important place to start for a market that will be up and coming and where gluten free is not very well-known at present,” Hedin explains.
UK-based gluten-free baker Mrs Crimble’s is doing business in the Middle East. “From our point of view, business in the Middle East continues to grow. The Middle East has been an historically strong market for Mrs Crimble’s,” commercial director Gareth Toms says. “Our vision for the brand here is developing great-tasting products that just happen to be gluten free. Of course, we have a gluten free message on our packaging, but that message is encompassed as part of the overall brand. This is because we want to get to the widest consumer base possible.”
Mrs Crimble’s was recently acquired by Dutch food group Wessanen. Toms insists Mrs Crimble’s is not yet ready to discuss wider development plans. However, reflecting on the gluten-free market in the Gulf, Toms says there is “definitely a high demand for sweet snacking treats” adding it is “lifestyle consumers who are really driving the business of gluten-free foods”.
“There is a wider appeal for our products, such as for those who have a family member with an intolerance but who are not themselves intolerant to gluten, but they get to know and enjoy our products. So for us, having products that taste as good or even better than their mainstream competitors, means we are steadily taking up as much business as we can.”
With it still being early days for the gluten-free business in the Gulf, there are still opportunities for smaller firms to make inroads. The Treat, an independent gluten-free bakery in Dubai launched two years ago, is one example.
“We bake all the goods we sell with a workforce of just a few people,” Patrick Helfer, who this year took over the business, says. “The Treat was the first 100% gluten-free bakery in Dubai and founded by a German who has coeliac disease. She sold the business to me about six months ago when she returned to Germany to produce gluten-free bread on a bigger scale than we do here.
“There is increasing demand for sure. The previous owner did some research with local doctors which suggested that about two to three new coeliacs, including those with a mild intolerance, were diagnosed about every three weeks.
“We took over the customers and have been developing our own new recipes and from what I hear from our customers, we are supplying even those who do not really need to eat gluten free foods. You have to remember that coeliacs or those with an intolerance probably only represent about 2% of the population, so there is a wider lifestyle choices market at play here.”
The Treat sells its products online only and has seen business picking up through social media as well as “word of mouth”. Helfer insists this suits a small business such as his, which would face exorbitant costs in establishing a shop or other outlet to sell its products. “In Dubai that would be a huge investment, not least in terms of the bureaucracy,” he said. “What I concentrate on is making consumers aware of our products by visiting hospitals and schools.”
Despite not having the economic clout to compete with more established competitors in terms of sales and marketing, The Treat has already secured a contract to supply its products to an airline – although Helfer declines to say which one. This helped to realise a turnover of between AED2m to AED3m (US$545,000 to $800,000) last year.
“We definitely see business growing further, especially in Dubai where the trend is very much towards healthier lifestyles,” Helfer adds.
Looking outside of bakery, Italian pasta manufacturer Zini, which exports gluten-free pasta to states in the Gulf under a deal with a Dutch distributor, is among exporters that expect the gluten-free market in the region to expand.
Zini export area manager Riccardo Mazzoli says the company’s pasta products are sold under other brand names in the Gulf. He declines to give sales figures but said “we have certainly seen an increase in demand for gluten-free products and we know from Dutch operators in the region it is expected to grow”.
And retailers are making moves to develop private-label lines. In the UAE, Carrefour sells a range of products that contain less than 20 parts per million of gluten, which the French retailer says are “within the tolerance of an allergic person”. Carrefour’s gluten-free products include “gluten-free chilled cake” and a number of its gluten-free items can be found in the delicatessen chillers of its stores.
Carrefour, which has hypermarkets and supermarkets across the region including in Dubai and Abu Dhabi in the UAE, says: “It used to be hard to find gluten-free products for those who are on a gluten-free diet.” But the French retailer claims its line has made it “way easier” for local consumers interested in gluten-free lines to buy them.
Elsewhere, in the foodservice sector, international hotel chains in the UAE are offering gluten free products estate wide as company policy, according to a briefing document on the country’s baked goods market by Bord Bia, the government agency that promotes Ireland’s food and drink industries domestically and abroad.
