UAE chocolatiers brace for heavy demand over Ramadan and Eid

Chocolatiers in the UAE are hoping for bumper Ramadan sales as competition intensifies and costs grow.

The chocolate confectionery market will reach US$292.4 million in 2017 in the UAE, according to Euromonitor. Antonie Robertson / The National

Piled high on golden platters, carefully set in elaborate shiny treasure chests or topped with ornate ribbons of green and silver and gold, chocolate shops across the UAE have been setting out their wares for Eid.

In the shopping malls, an ever- increasing number of chocolate-makers are busy with shoppers looking to get a little something sweet for family and friends to celebrate from the UAE’s increasing number of luxury chocolate shops.

At Patchi’s brightly lit shop in The Dubai Mall, the shelves are packed with lavish Ramadan creations featuring Arabic calligraphy and piles of dried fruit and nuts dipped in chocolate as the store prepares for one of its busiest trading periods.

The UAE branch of the Lebanese chocolate maker is determined to capitalise on the Ramadan rush this year after the business was hit by a fire last year at its Al Quoz warehouse in Dubai. This prompted Patchi to bring in supplies from surrounding countries to help meet demand.

“The holy month of Ramadan is considered one of the highest and best-selling seasons for Patchi, along with its three days of Eid celebrations, where gifting a Patchi Tray or a filled items has become a tradition in this part of the region,” says Sawsan Al Khalil, the administration manager for Patchi UAE.

“With the growth of the UAE region, the retail business has been greatly nourished and Patchi’s business in specific has overseen a continuous growth from year to year,” she adds.

Ramadan chocolate sales are big business in the UAE and a key barometer of the overall economy.

Total chocolate sales in the region have been growing rapidly over the years, especially during the holy month.

According to Euromonitor, the chocolate confectionery market will reach US$292.4 million in 2017 in the UAE, up from $225.7m in 2012.

And, according to KPMG, it is growing at a rate of 27 per cent in terms of value of sales and 14 per cent in terms of volume – a higher rate of growth than India, China, Russia and Mexico.

In GCC countries, sweetened cocoa powder, chocolate and other food preparations containing cocoa as well as sugar confectionery containing cocoa are among the top commodity imports with the UAE second to Saudi Arabia.

But the increase in sales has also brought new entrants from around the world to the UAE market as hundreds of luxury stores including Patchi, Godiva, Butlers, Candylicious, Choco Laty, Forrey & Galland, Debauve & Gallais, Chocoa and Atalie Chocolates vie for the country’s lucrative trade.

And all this comes at a time when UAE customers are being hit by increasing costs, especially from increasing property rents. According to recently published figures from Asteco, apartment rents in Dubai rose by an average of 39.8 per cent compared with a year ago, while villa rents were up by an average of 19.1 per cent over the year and office rents increased by 7.5 per cent.

Despite the squeeze, the Swiss brand Confiserie Sprüngli is also hoping to double the number of chocolates it sells in the UAE during the holy month this year after opening its first retail store outside Switzerland at the Village Mall, Jumeirah Beach Road last month.

Sprüngli, which has been operating in Dubai for the past six years from an office in the Dubai Airport Freezone, hopes that its new coffee shop, where customers can sample the firm’s 34 different types of pralines, will tempt wealthy chocolate lovers to part with between Dh600 and Dh5,000 a piece to buy its super luxury Ramadan hampers.

The chocolatier hopes to open two more stores in the UAE in the coming months, one more in Dubai and one in Abu Dhabi.

“We have been planning to open this store for some time but were delayed due to lengthy procedures. We are very pleased that we finally managed to opened before Ramadam because we expect total sales during this month to be very good,” said Ester Crameri, the general manager of Sprüngli Middle East. “We hope that we can double our Ramadan sales this year with the new store, although I have to say that the Dubai market is very competitive.”

Yet according to some UAE chocolatiers, the cut-throat competition coupled with rocketing rents are likely to drive down takings.

Jalel Ghayaza, the chief executive and founder of the Dubai-based chocolate brand Delice, predicts that UAE Ramadan sales for his business are likely to decrease by 40 to 50 per cent this Ramadan compared with the previous year.

Delice, which sells its sweets, dates and macaroons at Harrods in London and through franchises in Armenia’s capital, Yerevan and the Ritz-Carlton in Bahrain, predicts that domestic sales will be hit by rising costs. It is also in the process of completing more franchise deals in Saudi Arabia and Baku, Azerbaijan, .

"We are expecting a very dramatic decrease in UAE business this Ramadan," Mr Ghayaza told The National. "The major issue is primarily for our clients. Everything has been affected by the huge increase in real estate costs which puts costs up. We have corporate clients who 10 years ago were willing to spend Dh300,000 to Dh400,000 on Ramadan gifts. Now those same customers are coming to me and saying that they are only willing to pay Dh50,000 to Dh60,000. Costs have gone up for us but we cannot pass this on to customers."

Mr Ghayaza says that with competition intensifying and costs likely to grow further over the coming years, the UAE’s chocolatiers will find that what was a very sweet market becomes a little harder for them to swallow.

“We have been extremely lucky with the retail sector over the past couple of years,” Mr Ghayaza added. “But our strategy now is to focus on our franchises abroad for the next few years. We have made enough profits over the past years and expanded so we can cope with the difficult market over the coming years.”

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