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Sector Trend Analysis - Ice Cream Trends in the United Arab Emirates

May 2018

Executive summary

  • The impulse ice cream category, which is made up of single portion dairy or water ice cream sold in stick, cone, or small cup format for immediate consumption, is the most popular ice cream category in the United Arab Emirates (UAE).
  • 97.6% of value sales for impulse ice cream were dairy ice cream in 2016, while 2.3% were water ice cream.
  • Although the frozen yoghurt category only represented 0.5% market share of total ice cream sales in 2016, sales increased by an impressive 200% from 2012 to 2016 (and by 140.3% in volume).
  • Consumers in the UAE tend to prefer premium brands over standard and economy brands.
  • For ice cream products as a whole, IFFCO Group was the top company, representing a 40.8% market share in 2016.
  • Of the store-based ice cream sales, 61.1% took place at modern grocery retailers, such as hypermarkets, supermarkets, convenience stores, and forecourt retailers. Convenience store sales saw the most growth, increasing in value by an impressive 180% from 2012 to 2016.
  • Although Canada has not exported much ice cream to the UAE in recent years, it was a much larger player in 2012, representing 22.4% of the world’s ice cream exports to the UAE.

Contents

Introduction

In 2016, 88% of the United Arab Emirates’ (UAE) 8.5 million inhabitants consisted of expatriate workers from Asian and Western countries. This expatriate population can largely be categorised into two groups: the majority being low-income labourers, mainly from India, the Philippines, Pakistan, and Bangladesh, and a smaller group of professionals with a high disposable income, often from Western countries such as the United Kingdom or from other parts of the Middle East. Regardless of the varying incomes, however, premium ice cream brands tend to be more popular than standard and economy brands, both for individual and sharing packs.

Tourism is a major source of revenue in the UAE and this industry is expected to see increased growth toward the end of the forecast period (2017 to 2021), when Dubai is set to host Expo 2020. This is expected to positively impact sales of food in the region, particularly within the foodservice industry.

While ice cream sales in the UAE tend to be slightly higher in the summer, they are only moderately seasonal because of the country’s generally warm weather. This makes it a strong competitor to other snack and dessert categories throughout the entire year. According to Euromonitor International (2017), buying patterns in the UAE are changing and consumers are increasingly purchasing ice cream in ice cream parlours, rather than for at-home consumption.

Although Canada has not exported much ice cream to the UAE in recent years, in 2012, it represented 22.4% of the world’s ice cream exports to the UAE with US$6.7 million worth of ice cream exports.

Retails sales

Ice cream products in the UAE have experienced steady growth over the past five years, with total growth in retail sales value of 28.6%, at a compound annual growth rate of 6.5% from 2012 to 2016. The impulse ice cream category, which is made up of single portion dairy or water ice cream sold in stick, cone, or small cup format for immediate consumption, has taken the lead in recent years to become the most popular ice cream category in the UAE. Although the frozen yoghurt category only represented 0.5% market share of total ice cream value sales in 2016, sales increased by an impressive 200% from 2012 to 2016, followed by the impulse ice cream category, which increased by 51.9%, and the take-home ice cream category, which increased by 9.3%. It is expected that the frozen yoghurt category will likely continue to experience the most value growth over the forecast period (2017 to 2021); however, it is expected to see a more moderate increase of 57.1% from 2017 to 2021. The impulse ice cream category is expected to increase by 36.9% at a compound annual growth rate of 8.2% from 2017 to 2021, and the take-home ice cream category is expected to increase by 12% at a compound annual growth rate of 2.9% during the same period.

While the impulse ice cream category led ice cream sales in terms of value in 2016, the take-home ice cream category led in terms of volume, with 5.9 billion litres sold in the UAE in 2016. The frozen yoghurt category experienced the most growth, with volume of sales increasing by 140.3% from 2012 to 2016. The volume of impulse ice cream sold increased by 36.6% during the same period, while the take-home ice cream category saw the volume of sales increased by a moderate 1.4%. It is expected that the frozen yoghurt category will continue to experience the most growth during the forecast period (2017 to 2021); however, it will likely be more moderate growth with an anticipated increase of 67.5% from 2017 to 2021. Volume sales of impulse ice cream are expected to increase by 21.1% from 2017 to 2021, while those of take-home ice cream are expected to increase by 4.3% during the same period.

Historical ice cream retail value sales in the UAE, US$ millions
Category 2012 2013 2014 2015 2016 *CAGR (%)
2012-2016
Total ice cream 83.5 89.9 97.0 102.4 107.4 6.5
Impulse ice cream 37.2 42.7 48.3 52.4 56.5 11.0
Take-home ice cream 46.1 47.0 48.4 49.5 50.4 2.3
Frozen yoghurt 0.2 0.3 0.4 0.5 0.6 31.6

Source: Euromonitor, 2017.

* CAGR = Compound Annual Growth Rate

Forecasted ice cream retail value sales in the UAE, US$ millions
Category 2017 2018 2019 2020 2021 *CAGR (%)
2017-2021
Total ice cream 113.0 120.5 127.5 134.5 142.0 5.9
Impulse ice cream 60.7 65.9 71.2 77.0 83.1 8.2
Take-home ice cream 51.6 53.9 55.4 56.5 57.8 2.9
Frozen yoghurt 0.7 0.8 0.9 1.0 1.1 12.0

Source: Euromonitor, 2017.

* CAGR = Compound Annual Growth Rate

Historical ice cream retail volume sales in the UAE, ‘000 litres
Category 2012 2013 2014 2015 2016 *CAGR (%)
2012-2016
Total ice cream 8,690.9 9,094.9 9,436.9 9,624.4 9,842.3 3.2
Impulse ice cream 2,831.1 3,187.9 3,509.2 3,676.5 3,868.5 8.1
Take-home ice cream 5,838.2 5,881.2 5,893.7 5,904.0 5,921.9 0.4
Frozen yoghurt 21.6 25.9 34.0 43.9 51.9 24.5

Source: Euromonitor, 2017.

* CAGR = Compound Annual Growth Rate

Forecasted ice cream retail volume sales in the UAE, ‘000 litres
Category 2017 2018 2019 2020 2021 *CAGR (%)
2017-2021
Total ice cream 10,169.4 10,382.4 10,712.6 11,007.4 11,330.7 2.7
Impulse ice cream 4,088.6 4,286.2 4,493.0 4,717.2 4,950.8 4.9
Take-home ice cream 6,022.2 6,031.8 6,147.1 6,206.0 6,281.9 1.1
Frozen yoghurt 58.5 64.4 72.5 84.3 98.0 13.8

Source: Euromonitor, 2017.

* CAGR = Compound Annual Growth Rate

Key categories

Impulse ice cream

The impulse ice cream category was the largest ice cream category in 2016, in terms of sales value. It represented 52.6% of total ice cream sales, and 39.3% in volume.

With a combined retail value share of 48%, the most popular formats for impulse ice cream are cones and sticks. This is most likely due to the convenience of these formats.

The majority (54.8%) of impulse ice cream was sold in small independent grocers in 2016. The remaining 45.1% was sold in supermarkets (17.9%), convenience stores (14.5%), hypermarkets (7.7%), and forecourt retailers (5%).

Historical sales of impulse ice cream in the UAE by sub-sector – retail value in US$ millions
Sub-sector 2012 2013 2014 2015 2016 *CAGR (%)
2012-2016
Total impulse ice cream 37.2 42.7 48.3 52.4 56.5 11.0
Single portion dairy ice cream 36.1 41.6 47.1 51.2 55.2 11.2
Single portion water ice cream 1.0 1.1 1.2 1.2 1.3 6.8

Source: Euromonitor, 2017.

* CAGR = Compound Annual Growth Rate

Forecasted sales of impulse ice cream in the UAE by sub-sector – retail value in US$ millions
Sub-sector 2017 2018 2019 2020 2021 *CAGR (%)
2017-2021
Total impulse ice cream 60.7 65.9 71.2 77.0 83.1 8.2
Single portion dairy ice cream 59.4 64.5 69.7 75.6 81.5 8.2
Single portion water ice cream 1.3 1.4 1.4 1.5 1.5 3.6

Source: Euromonitor, 2017.

* CAGR = Compound Annual Growth Rate

Take-home ice cream

In 2016, the majority (78.9%) of take-home ice cream was sold in modern grocery retailers such as hypermarkets and supermarkets. 20.2% of take-home ice cream was sold in traditional grocery retailers such as small independent grocers, and 0.8% was sold through internet retailing.

Historical sales of take-home ice cream in the UAE by sub-sector – retail value in US$ millions
Sub-sector 2012 2013 2014 2015 2016 *CAGR (%)
2012-2016
Total take-home ice cream 46.1 47.0 48.4 49.5 50.4 2.3
Take-home dairy ice cream 45.3 46.1 47.4 48.4 49.2 2.1
Take-home water ice cream 0.8 0.9 1.0 1.1 1.2 10.7

Source: Euromonitor, 2017.

* CAGR = Compound Annual Growth Rate

Historical sales of take-home ice cream in the UAE by sub-sector - take-home dairy ice cream – retail value in US$ millions
Sub-sector 2012 2013 2014 2015 2016 *CAGR (%)
2012-2016
Take-home dairy ice cream 45.3 46.1 47.4 48.4 49.2 2.1
Bulk dairy ice cream 42.2 42.8 44.0 44.8 45.4 1.8
Multi-pack dairy ice cream 3.1 3.2 3.4 3.6 3.8 5.2

Source: Euromonitor, 2017.

* CAGR = Compound Annual Growth Rate

Historical sales of take-home ice cream in the UAE by sub-sector - take-home water ice cream – retail value in US$ millions
Sub-sector 2012 2013 2014 2015 2016 *CAGR (%)
2012-2016
Take-home water ice cream 0.8 0.9 1.0 1.1 1.2 10.7
Bulk water ice cream 0.2 0.2 0.3 0.3 0.3 10.7
Multi-pack water ice cream 0.6 0.7 0.7 0.8 0.8 7.5

Source: Euromonitor, 2017.

* CAGR = Compound Annual Growth Rate

Forecasted sales of take-home ice cream in the UAE by sub-sector – retail value in US$ millions
Sub-sector 2017 2018 2019 2020 2021 *CAGR (%)
2017-2021
Total take-home ice cream 51.6 53.9 55.4 56.5 57.8 2.9
Take-home dairy ice cream 50.4 52.6 54.1 55.1 56.3 2.8
Take-home water ice cream 1.2 1.3 1.3 1.4 1.5 5.7

Source: Euromonitor, 2017.

* CAGR = Compound Annual Growth Rate

Forecasted sales of take-home ice cream in the UAE by sub-sector - take-home dairy ice cream – retail value in US$ millions
Sub-sector 2017 2018 2019 2020 2021 *CAGR (%)
2017-2021
Take-home dairy ice cream 50.4 52.6 54.1 55.1 56.3 2.8
Bulk dairy ice cream 46.5 48.4 49.6 50.3 51.2 2.4
Multi-pack dairy ice cream 4.0 4.2 4.5 4.7 5.0 5.7

Source: Euromonitor, 2017.

* CAGR = Compound Annual Growth Rate

Forecasted sales of take-home ice cream in the UAE by sub-sector - take-home water ice cream – retail value in US$ millions
Sub-sector 2017 2018 2019 2020 2021 *CAGR (%)
2017-2021
Take-home water ice cream 1.2 1.3 1.3 1.4 1.5 5.7
Bulk water ice cream 0.4 0.4 0.4 0.4 0.4 0.0
Multi-pack water ice cream 0.8 0.9 1.0 1.0 1.1 8.3

Source: Euromonitor, 2017.

* CAGR = Compound Annual Growth Rate

Frozen yoghurt

Although the frozen yoghurt category was the smallest, it experienced the most significant growth of all the ice cream categories, increasing by 200% from 2012 to 2016. This category increased at a compound annual growth rate of 31.6% during the last five years (2012 to 2016), reaching a retail value of US$0.6 million in 2016. This strong growth may be due to the growing awareness of health and nutrition among consumers in the UAE and the perception that frozen yoghurt is a healthier alternative to traditional ice cream. According to Euromonitor International (2017), an increased presence of frozen yoghurt in shopping mall ice cream parlours may also be influencing consumers to purchase frozen yoghurt later in supermarkets for consumption at home.

Historical sales of frozen yoghurt in the UAE by sub-sector – retail value in US$ millions
Sub-sector 2012 2013 2014 2015 2016 *CAGR (%)
2012-2016
Frozen yoghurt 0.2 0.3 0.4 0.5 0.6 31.6

Source: Euromonitor, 2017.

* CAGR = Compound Annual Growth Rate

Forecasted sales of frozen yoghurt in the UAE by sub-sector – retail value in US$ millions
Sub-sector 2017 2018 2019 2020 2021 *CAGR (%)
2017-2021
Frozen yoghurt 0.7 0.8 0.9 1.0 1.1 12.0

Source: Euromonitor, 2017.

* CAGR = Compound Annual Growth Rate

Top companies and distribution

For ice cream products as a whole, IFFCO Group was the top company, representing 40.8% market share in 2016. IFFCO Group is a local company, which allows them to quickly adapt and include the latest consumer trends into their product lines. Of the top companies, Mars GCC saw the most growth, increasing by 30.7% from 2012 to 2016, followed by Unilever Middle East (13.9%), and National Trading & Development Est. (12.5%).

Most ice cream sales in 2016 took place in store-based retailers, while 0.4% took place online. Of the store-based sales, 61.1% took place at modern grocery retailers, such as hypermarkets (33.7%), supermarkets (16.9%), convenience stores (7.8%), and forecourt retailers (2.7%), while 38.5% took place at traditional grocery retailers, such as independent small grocers (37.2%) and food/drink/tobacco specialists (1.3%).

Retail sales for ice cream products in independent small grocers represented US$40 million in 2016 and those in hypermarkets represented US$36.1 million. Convenience store sales, however, have experienced the most growth, increasing in value by an impressive 180% from 2012 to 2016 at a compound annual growth rate of 29.4%.

Top ice cream *companies in the UAE, 2016
# Company Market share (%)
1 IFFCO Group 40.8
2 Mars GCC 14.9
3 Unilever Middle East 14.7
4 National Trading & Development Est. 8.1
5 Galadari Ice Cream Co. LLC 7.0
6 Pure Ice Cream LLC 1.4
7 Unipex Dairy Products Co. Ltd. 0.6
8 Majid Al Futtaim Hypermarkets LLC 0.1
9 Other Private Label 0.2
10 Others 12.3

Source: Euromonitor, 2017

* National – Latest Owner

Distribution of ice cream products in the UAE by store type, % retail value
Format 2012 2013 2014 2015 2016
Store-based retailing 100.0 100.0 99.8 99.7 99.6
Non-store retailing (Internet) 0.0 0.0 0.2 0.3 0.4
Source: Euromonitor, 2017
Distribution of ice cream products in the UAE by store-based retailing, % retail value
Format 2012 2013 2014 2015 2016
Store-based retailing 100.0 100.0 99.8 99.7 99.6
Modern grocery retailers 60.0 59.1 58.7 59.7 61.1
Traditional grocery retailers 40.0 40.9 41.1 39.9 38.5
Source: Euromonitor, 2017
Distribution of ice cream products in the UAE by modern grocery retailers, % retail value
Format 2012 2013 2014 2015 2016
Modern grocery retailers 60.0 59.1 58.7 59.7 61.1
Convenience stores 3.7 3.9 5.0 6.2 7.8
Forecourt retailers 2.0 2.2 2.4 2.6 2.7
Hypermarkets 38.9 36.8 35.0 34.4 33.7
Supermarkets 15.4 16.1 16.2 16.6 16.9
Source: Euromonitor, 2017
Distribution of ice cream products in the UAE by traditional grocery retailers, % retail value
Format 2012 2013 2014 2015 2016
Traditional grocery retailers 40.0 40.9 41.1 39.9 38.5
Food/drink/tobacco specialists 1.1 0.9 0.9 1.2 1.3
Independent small grocers 38.8 40.0 40.3 38.8 37.2
Source: Euromonitor, 2017

New product launch analysis

From 2007 to 2016, there were 32 ice cream and frozen yoghurt products launched in the UAE. Over 62% of the ice cream and frozen yoghurt products launched were new product introductions, while 34.4% were varieties/range extensions to an existing product line, and 3.1% were existing products that were relaunched with new packaging.

Number of ice cream and frozen yoghurt products launched in the UAE, 2007 to 2016
Description of this image follows.
Description of the above image
Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Number of ice cream
and frozen yoghurt
products
0 1 1 0 1 0 8 8 4 9
Number of ice cream and frozen yoghurt products launched in the UAE, 2007 to 2016
Description of this image follows.
Description of the above image
  • New product 63%
  • New variety/range 34%
  • New packaging 3%
Number of ice cream and frozen yoghurt product launches in the UAE,
January 2007 to December 2016, by feature
Feature 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Yearly product launches 0 1 1 0 1 0 8 8 4 9
Source: Mintel Global New Product Database, 2017.
Number of ice cream and frozen yoghurt product launches in the UAE,
January 2007 to December 2016, by top five claims
Feature 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Low/no/reduced fat 0 0 0 0 0 0 2 1 1 2
Kosher 0 0 0 0 0 0 0 5 0 0
Ethical 0 0 0 0 0 0 0 5 0 0
Gluten-free 0 0 0 0 0 0 0 2 0 1
Low/no/reduced allergen 0 0 0 0 0 0 0 2 0 1
Source: Mintel Global New Product Database, 2017.
Number of ice cream and frozen yoghurt product launches in the UAE,
January 2007 to December 2016, by Top five flavour components
Feature 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Yoghurt 0 0 1 0 1 0 6 2 2 3
Strawberry 0 0 0 0 0 0 1 5 1 1
Forest fruits 0 0 0 0 0 0 1 0 0 2
Shortcake 0 0 0 0 0 0 0 3 0 0
Chocolate 0 0 0 0 0 0 0 2 0 0
Source: Mintel Global New Product Database, 2017.
Number of ice cream and frozen yoghurt product launches in the UAE,
January 2007 to December 2016, by format type
Feature 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Cup/tub 0 0 0 0 0 0 8 8 3 8
Stick 0 0 1 0 0 0 0 0 0 0
Cone 0 0 0 0 0 0 0 0 0 1
Complete desserts 0 1 0 0 0 0 0 0 0 0
Source: Mintel Global New Product Database, 2017.

Examples of new products in the UAE

London Dairy
Company London Dairy, U.K.
Brand London Dairy
Launch Type new variety / range extension
Price in US Dollars $7.47
Description London Dairy Premium Ice Cream with Mocha Almond Fudge is a combination of premium mocha flavoured ice cream with swirls of coffee sauce and roasted almond pieces. This ice cream is made using only vegetarian ingredients. The product retails in a 1L tub.
Positioning Claims premium, vegetarian
Quanta
Company Unipex Dairy Products, U.A.E.
Brand Quanta
Launch Type new packaging
Price in US Dollars $2.72
Description Quanta Mini Almonds Premium Vanilla Ice Cream has been repackaged in a redesigned pack of six 50ml units with one ice cream free, and featuring the Facebook logo. The product comprises vanilla ice cream dipped in a milk chocolate coating with roasted almonds.
Positioning Claims premium, social media
Baskin Robbins
Company Silver Pail Dairy, Ireland
Brand Baskin Robbins
Launch Type new variety / range extension
Price in US Dollars $9.30
Description Baskin Robbins Chocolate Chip Ice Cream is made by pouring liquid chocolate into vanilla ice cream. This product is halal certified and retails in a 1L tub.
Positioning Claims halal
Igloo
Company Al-Ain National Juice & Refreshments, U.A.E
Brand Igloo
Launch Type new variety / range extension
Price in US Dollars $7.15
Description Igloo Malai Kulfi Ice Cream is traditional kulfi ice cream with pistachio and cashew nuts. This product retails in a 2L tub bearing the SGS logo.
Positioning Claims N/A
Marks & Spencer, U.K.
Company Marks & Spencer, U.K.
Brand Marks & Spencer, U.K.
Launch Type new product
Price in US Dollars $5.33
Description Marks & Spencer Mixed Berry Frozen Yogurt comprises natural and swirled mixed berry frozen yogurt with blueberry pieces. The vegetarian product retails in a 500ml pack.
Positioning Claims vegetarian
Kwality Ice Cream
Company Pure Ice Cream, U.A.E.
Brand Kwality Ice Cream
Launch Type new variety / range extensiont
Price in US Dollars $1.28
Description Kwality Ice Cream Maharaja Koolfi Kulfi Ice Cream consists of a premium kulfi ice cream with a kulfi flavoured coating and pistachio nuts. This product is suitable for vegetarians and retails in an 80ml pack.
Positioning Claims premium, vegetarian

Conclusion

With its warm climate, the UAE is a good market for companies looking to export since they have a better chance of competing with other snack and dessert categories. Companies that are interested in exporting ice cream products to the UAE should be aware of the trends toward premium, and health and wellness products.

With the upcoming Expo 2020 in Dubai and likely subsequent increase in tourism, there may be increased opportunities for innovative and premium products in the foodservice sector.

Although consumers have shown a preference for impulse ice-cream products, there is increasing opportunities for frozen yoghurt products, which are perceived to be a healthier alternative to ice cream.

For more information

International Trade Commissioners can provide Canadian industry with on-the-ground expertise regarding market potential, current conditions and local business contacts, and are an excellent point of contact for export advice.

For additional intelligence on this and other markets, the complete library of Global Analysis reports can be found on the International agri-food market intelligence page, arranged by region.

For additional information on Gulfood 2018 please contact:

Ben Berry, Deputy Director
Trade Show Strategy and Delivery
Agriculture and Agri-Food Canada
ben.berry@canada.ca

Resources

Sector Trend Analysis
Ice Cream Trends in the United Arab Emirates

Prepared by: Julie Acheson, Market Analyst

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