Luxury brands pave the way

ICE CREAMS and gelatos have a long way to go in the Middle East. Dairy brands know it, and customers are delighted with the availability of new options. Media reports suggest that in Dubai alone, there are 300 gelato outlets of various brands. This figure will soon rise as a number of companies have announced expansion not only in Dubai but across the region.

UAE is home to Baskin-Robbins’ biggest master franchisee globally and it will not stop there. The plan is to grow its current network of 650 outlets in the region by adding 350 stores in the next couple of years.

Owned by Galadari Brothers Co. LLC, Galadari Ice Cream has 156 stores in the UAE, and by the end of 2014, it had aimed to expand further.  “Over the last five years we’ve doubled our business in the Middle East,” Abdulmonem Suliman, Galadari Ice Cream Co. Ltd’s general manager was cited as saying in an article in The National. “The market is fantastic. We have a very strong brand equity in the market. We are the No. 1 ice-cream player in the region. We have a very strong foothold in all of the GCC countries.”

He added, “In terms of ice-cream consumption per capita, the northern European countries, the UK and the US are far ahead of the consumption in this region. So we are seeing that there are opportunities for growth.”

Morelli’s Gelato, a luxury ice cream brand from the United Kingdom, continues to expand in the region, with outlets in the United Arab Emirates, the Kingdom of Saudi Arabia, Kuwait and Bahrain. Outside the Middle East, the brand is making headway, too. Founded by Guissepe Morelli, it has been producing ice cream since 1907, offering traditional flavours made with ingredients such as pistachios from Sicily and mango from India.

Similarly, Italian brand Vasa Vasa opened its first outlet in Abu Dhabi, UAE recently. The ice cream brand offers a delectable range of flavours, most of them very traditional, paying much attention to the quality of the raw materials. Its Gelato Artigianale Italiano ice creams faithfully follow the original Italian recipes, and do not contain artificial ingredients or ready-to-use bases.

Silvia Martinelli, founder at Vasa Vasa Ice Cream LLC said, “Our guests can choose from a variety of three different chocolates, that we at Vasa Vasa select personally; vanilla from Madagascar and hazelnut from Piemonte (an area in the north of Italy) only to name a few. We also have some typical and unique Italian flavours: Cassata, which is made with the same ingredients as the famous Sicilian dessert: sheep ricotta, almonds, candied fruits and chocolate chips; Sapori di Sicilia, with candied mandarin, lemon zest and jasmine essence.”

Customers seek quality in ice cream
Product quality is just as important to ice cream as with any other food product, even if one may only be looking for a cold snack. Ms Martinelli feels that in Abu Dhabi there is a growing demand for quality products. People are more and more aware of how important it is to eat healthy food, even when eating a snack such an ice cream. People love their gelato for its taste and its creamy texture and appreciate it even more when they realise that the ingredients are natural and the ice cream is freshly made – that is on the day it is served.

“The Italian Gelato is simply not replicable outside the Italian borders. Our tradition and expertise and the quality of our ingredients make this product unique in the world. Our gelato is actually made in Italy, which means that is exactly the same product that one would eat if he or she would be in one of our shops in Milano. This is what makes our product different: the emotion of eating something that is unique. Many times I have heard our customers saying “this gelato reminds me of the one that I had during my stay Italy and of the beautiful time that I had there.”

Ms Martinelli confirms that the ice cream business is famous for the high profit margins that it generates. At Vasa Vasa, focus mostly remains on quality which translates to higher food costs compared to other shops. Customers are aware of the difference in product quality and are willing to pay a little bit more to get something different from the average product that is available in the UAE.

Did you say healthy?
Ms Martinelli said that apart from the curiosity that customers have for their flavours, there is a growing interest in healthy food. “We have a variety of sorbets, all of them dairy free, for people with intolerances or who simply prefer something light.” The main ingredients of the sorbets are fruit, water, glucose and natural thickening agents such as carob flour which basically means no fat. 

“The quality of our gelato works better than any marketing department. The high number of regular and loyal customers that we have managed to reach during the first year in Abu Dhabi proves this,” she said. “Our clients are aware of the quality of our product and are willing to pay a little bit more to get something different from the average product that is available in the UAE. There is a strong interest for our gelato in Qatar and in Dubai. At present, we are negotiating with an investment fund that is interested to start a franchise. This should bring to an important growth our brand in all the area of the Gulf. We are very optimistic and positive on this issue since we strongly believe in the quality of our product.”

In 2015, Ms Martinelli vows to increase home delivery service and focus on innovation. In fact, Vasa Vasa plans to add new ice cream flavours to the selection and continue working on its recipes to keep the quality high.

UK brand Morelli’s Gelato serves traditional flavours with ingredients such as pistachios from Sicily and mango from India

Making a comeback
Dairy Queen, owned by U.S. company Berkshire Hathaway, was amongst the first ice cream shops to set up a business in the Middle East. But to the surprise of customers, the brand decided to bow out of the market, with its last outlet closing a few years ago. In November 2014, the company announced a franchise deal with Bajco Group, to re-open 20 shops in the UAE, the first of which will launch in early 2015.  “We are looking forward to expanding our global reach in the Middle East region and are excited about the opportunity to re-introduce the Dairy Queen brand to the United Arab Emirates,” said Jean Champagne, COO International Groups, Dairy Queen, in a press statement.

The UAE is the 28th country besides the United States and Canada which will see Dairy Queen brand expand across its territory. According to GCC Dairy Report 2013 by Zenith, specialist consultants for food and drink industries globally, Saudi Arabia is the largest producer of milk and dairy products regionally, producing 50% of the country's demand. Saudi Arabia and UAE account for 62.6% and 17.6% of GCC’s population. In terms of consumption, KSA holds 74.1% share and UAE holds 14.2% share.  These figures are likely to improve as desirable demographics continue to dominate dairy consumption in the region.