In the United Arab Emirates, a taste for chocolate is growing.
According to TechSci Research's new report, chocolate sales in the UAE are poised to register a CAGR (Compound Annual Growth Rate) of eight percent from 2016-2021.
The report, UAE Chocolate Market By Type, By Age Group, By Point of Sale, Competition Forecast and Opportunities, 2011-2021, attributes this booming growth to increasing young and migrant populations with growing demand for new and innovative flavors, coupled with the introduction of innovative packaging. Factors like these are projected to drive the UAE chocolate market through 2021.
In an earlier report, TechSci predicted that the UAE's chocolate sales would grow by 6.09 percent during 2014-2019. Demand since then has only increased.
That's all thanks to rising per capita expenditure, the growing youth population, escalating seasonal demand, and the entry of new domestic and international players who positively influence the growth of the chocolate market. TechSci also anticipates the expansion of distribution channels and the number of exclusive stores in the next five years, which will continue to boost demand for chocolates.
"UAE chocolate market is becoming an attractive destination for international players, especially those who are offering high-end products. Backed by high per capita income, the demand for high-end or premium chocolates is increasing in the country, thereby offering growth opportunities for overseas players," says Karan Chechi, research director at TechSci Research.
Currently, leading players in the UAE include Mars GCC, Gerrero SpA, Nestle Middle East, Mondelez Middle East and Africa FZE, and Lindt & Sprüngli.
In 2015, the countline segment, which includes bars containing wafers or caramel, dominated the chocolate market in the UAE. It was the most popular segment for consumers under the age of 25 and is expected to maintain its dominance through 2021.
However, the boxed segment is anticipated to grow at a faster rate due to growing demand for premium chocolates and the introduction of innovative, attractive packaging.
Indeed, it seems chocolate is starting to play a more involved role in the UAE, as consumers are increasingly opting for chocolates as gift items on festivals and other occasions. The desire for gift-worthy chocolates has driven demand for premium chocolates, while health concerns have spiked demand for dark chocolates rich in antioxidants.
But every market has its obstacles. Fluctuating raw material prices, dependence on unstable markets for cocoa supply, and counterfeit markets are all working against the current and restraining the growth of the UAE's chocolate market.