Del Monte delivering online: Digital transformation and big brand power key to firm’s Middle East e-commerce push

20-May-2020 - Last updated on 20-May-2020 at 01:38 GMT

Del Monte is expanding its e-commerce business in Saudi Arabia, Kuwait and Jordan after successful launch in UAE ©Del Monte Arabia Twitter

Global fruit giant Del Monte says a combination of the digital transformation sweeping the Middle East, coupled with its might as a global brand, is helping drive e-commerce sales across the region.

After launching its e-commerce site in Dubai in April, it now has its sights set on Saudi Arabia, Kuwait and Jordan – with ‘Gen Y’ consumers its target demographic.

The e-commerce store allows consumers to place orders of fresh, fresh-cut fruits, vegetables and prepared food, and have it delivered on the same day for orders placed before 12 noon.

Racha El Aawar, the firm’s regional marketing manager (MENA) told FoodNavigator-Asia, mobile phone penetration in the Middle East was the highest in the world, meaning e-commerce was a natural fit.

Aawar said: “Gen Y is our main target audience because most of them shop online and rely on comments and recommendations from other users. In addition, they need to balance their work and family life, so online shopping gives them the ability to juggle this.

“We selected these countries (Saudi Arabia, Kuwait, Jordan) as we have the facilities and expertise in place for production and delivery. These markets are now ready for the digital transformation and online shopping which is a great opportunity for us.”

The firm’s regional headquarter is located in Dubai, with fresh cut facilities in UAE, Saudi Arabia and Kuwait, and sales and distribution centres in Jordan, Qatar, Oman, Morocco, Turkey, and Tunisia.

Pandemic behaviour

The Dubai launch coincided with the emirate going into a lockdown because of the COVID-19 pandemic.

“We made a very good start due to the lockdown conditions in Dubai and our main aim was to understand what our consumers expect from us in order to cater to their needs,” Anwar said.

“People tended to buy longer lasting and more versatile products. In particular, our canned items range which includes vegetables, fruits and beans, have seen significant growth.”

The company reported net sales for Q1 2020 down to US$1.118bn, from US$1.154bn in Q1 2019. The loss in sales was mainly attributed to North America and Asia, with Middle East sales increasing from US$97.8m in Q1 2019 to US$112.4m this year.

In its earnings call, Mohammad Abu-Ghazaleh, chairman and chief executive officer said: “Early in the quarter, we saw a reduction in our business in Asia as a result of supply and demand imbalances brought about by the closures and restrictions put in place in China logistics operations.”

F&B goes online

However, he predicted a string future for online sales.

Abu-Ghazaleh said: “I believe we will see behaviour changes in the market. One such example is the surge in e-commerce category sales. While online grocery shopping grows at rapid pace during the pandemic, I believe consumer usage has just begun, which is why in April of 2020 we broadened our distribution channels by introducing our online store in the United Arab Emirates.”

According to a study by Go-Gulf, the food and beverage e-commerce market in Middle East was forecast to reach US48.7bn by 2021.

Aawar told us the current F&B e-commerce market was saturated with start-ups trying to grab a slice of the market share.

She added: “However, the big companies have the experience and resources to win back any lost market share and lead the category.”