Irish dairy products are growing in popularity among discerning shoppers in the Middle East, who are focused on sustainably produced, premium natural foods. David Butler, managing director, Ornua Ingredients International speaks to about the organisation’s presence in the region and plans for the portfolio.
Article appeared in issue 1, 2021
How long has Ornua had a presence in the Middle East?
Ornua has been selling the Kerrygold brand in the Middle East region for over 30 years. To help support the strategic growth of the brand, Ornua established its Dubai office in 2008. This was a key strategic decision to ensure our sales and marketing teams were working in-market alongside customers and consumers. This allowed for a much greater understanding of the diverse markets, the ever-changing needs of consumers and the challenges faced in exporting to each region. Ornua Ingredients International is responsible for the sales and marketing of both consumer brands and ingredients across the African continent, the Gulf Cooperation Council (United Arab Emirates [UAE], Qatar, Kuwait, Bahrain, Oman, Kingdom of Saudi Arabia [KSA]), Levant (Lebanon and Jordan), Iraq and Turkey. It is supported by production facilities in Nigeria and Saudi Arabia and by sales and marketing teams throughout Africa and the Middle East.
Tell us more about the factory in Riyadh, Saudi Arabia.
Ornua Ingredients International produces a variety of innovative and bespoke white cheese solutions for the B2B ingredients and bakery sector. The facility in Saudi Arabia (Al wazeen) is based in Riyadh, KSA and leverages recombined technology developed in partnership with Teagasc in Ireland. The facility was commissioned in 2016 and services a number of key strategic partners in the KSA. Our products include white cheese and labneh, which are distributed across the Gulf Cooperation Council under our foodservice brands Palatina and Mersin. The investment in the region is consistent with Saudi Arabia’s plans for progress through their Vision 2030 strategy which aims to reduce the region’s dependence on oil and diversify its economy.
What products are you offering in the region?
On the branded side of the business, we have a decades-long history in the market with Kerrygold. Nowadays, our product portfolio includes a range of butter and cheese products. While the brand has always had a strong reputation for taste and quality, our team is harnessing a growing demand for foods with grass-fed and natural credentials. Consumers, particularly in the UAE and KSA, are moving away from processed foods in favour of more natural products, which represents an opportunity for Kerrygold. White cheese manufactured in Saudi Arabia using Irish dairy, is a key filling ingredient in many savoury pastries that are increasingly consumed ‘on the go’ in the region. Ornua has a dedicated customer innovation centre where it co-develops these fillings for its customers, meeting diverse flavour and application requirements.
The expansion of both portfolios is a pivotal element of our growth strategy, as we identify and adapt to evolving customer and consumer preferences across the region.
What is the appeal of Irish products in the Middle East?
Consumer awareness of Ireland’s unique grass-fed advantage, although not as advanced as other key export markets, is growing. Irish produce holds strong visibility across the region, particularly in the UAE, where a sizeable and affluent western ex-pat community is prepared to pay a premium for high-quality dairy products.
As consumer preference evolves across the region, with increased demand for sustainably produced, natural and healthier foods, the opportunity for Irish exports, and particularly Kerrygold, remains strong. Ornua will continue to invest and grow this market for the future.
What trends in the region are you mindful of and why?
Covid-19 has had a strong impact on consumer behaviour in the Middle East. In terms of grocery retail, 2020 data shows an upswing in consumer spending, as well as significant growth in digital commerce. Previously an emerging channel in the Middle East, online grocery retail is estimated to have more than doubled in size last year in both the UAE and KSA, with a rise in smartphone shopping and the introduction of numerous e-commerce platforms in the market.
In addition, the Middle East consumer is showing an increased appreciation for natural, less-processed foods, which are perceived as more beneficial from a health and nutrition perspective (Euromonitor 2019).
Is sustainability of interest to consumers in the region?
Consumers are increasingly aware of the environmental impact of their food choices and, as such, are displaying increased inclination towards sustainably produced food. Within the Middle East, this trend, which is in its early stages, is primarily being driven by the UAE which is an affluent and cosmopolitan market where food quality is a key consumer concern. This represents a great opportunity for Kerrygold – a grass-fed, sustainably produced, natural, dairy product with a superior taste difference.
What advice could you offer to companies hoping to export to the Middle East?
While the Middle East region holds strong opportunity for export, the importance of solid groundwork, in terms of market research and competitor analysis, cannot be underestimated. With diverse cultural demographics across the region, the Middle East is very much a world stage for food products and competition can be tough. In practice, the region can be quite different to initial perception and there is much to learn in terms of cultural differences and the practicalities of doing business here. Furthermore, the route to market can be complex, from finding a suitable distribution partner, to navigating the complexities of food regulation, which can differ considerably from market to market.
What are your future plans for the region?
The Middle East is the fastest growing retail landscape globally. As such, we are focused on the expansion of our branded product portfolio to meet the ever-changing needs of consumers across the region. In addition, we will look to expand our network of markets within the region and diversify our consumer base towards ethnic majority populations and associated consumer preferences with a focus on Indian and Arab across the Middle East.