Baladna CEO Exclusive Part II: Middle East dairy industry currently driven by value consciousness, affordability and home cooking trends
As one of the largest dairy firms in the Middle East and the largest in Qatar with leading market shares in various dairy categories such as Fresh milk (86.8%), UHT milk (77.7%), yoghurt (41%) and labneh/Greek yoghurt (43%), Baladna has observed that trends in the dairy industry have shifted over the past year.
“One obvious one is the shift to home-cooking as obviously due to lockdown measures consumers have had to consume more product at home, especially with hospitality and foodservice having become so restricted in the region,” Jordan told FoodNavigator-Asia.
“This has helped to drive sales in categories such as cheese and creams, particularly long-life creams [for use in home cooking and baking].
“But even more prominently, we have seen consumers become a lot more value conscious as compared to previously, and this is unfortunately linked to the COVID-19 pandemic and sentiments around employment, income and so on.”
Expressing hopes that this is just temporary and the situation is improving, Jordan said that the focus for the firm in response to this trend has been to pay closer attention to improving product affordability for consumers.
“We realized that we needed to be increasingly mindful about price points and serving sizes – consumers became a lot more aggressive when it came to seeking out promotions than in the past, so as a company we set out an affordable strategy to rising demand in this area,” said Jordan.
“As part of this, Baladna launched our new value-oriented, budget-conscious brand called Awafi – this was launched in 2020 and we have seen this line truly accelerate quickly due to this affordability and value-conscious trend.”
Baladna has not skimped on the development of product SKUs within the Awafi line either – there are over 30 products within the range, from everyday dairy necessities such as UHT milk, yoghurt and cheese to more discretionary items such as juices and milkshakes.
“Awafi was developed as what we like to call and every man, everyday brand. The products in there are more affordable and focused on value for money targeted at consumers conscious of their spending,” said Jordan.
“These products can provide consumer with similar levels of the nutrition that they seek, just have some differences allowing for them to be more economical.”
‘Even busier’ in Q2 and Q3 2021
Despite Baladna’s market leadership in many categories, Jordan believes that there is still a lot of room for it to grow in terms of product innovation to meet consumer demands, and told us that he expects to be ‘even busier’ over the next two quarters of the year.
“We’ve already done a lot of product innovation in Q1 2021, but I do expect an even more extensive Q2 and Q3 to come with even more product development on the way,” he said.
“Q1 saw the development of our lactose-free milks and cheeses, to plug a gap and meet local demands which we had not met previously as we want to cover all the touchpoints including consumers with lactose intolerance, as well as expanding our juice range.
“Linking back to the affordability trend, we also worked on developing our juices in different sizes to meet different price points – we only have some 15% of this category, so there is still more work to be done to capture more of it.
“Q2 and Q3 will see a lot going on in Baladna, especially over the next few months, as we definitely want to focus on some product developments which were caught up during COVID-19.
Jordan remained coy on the exact new product launches to be expected over the year, but told us that the focus would remain on existing categories first.
“I can’t reveal exactly what items are coming, but we want to focus on range extensions to our existing ranges – so things like cheese, juice, yoghurts and desserts will be seeing boosts,” he said.
“The other area of interest to our research and development is nutritional – we want to look into more development around protein within dairy, to get even more nutritious products out there.”
Despite remaining positive and innovating as quickly as possible to meet consumer needs, as a whole Baladna still expects consumer demand to continue to be less predictable than usual as long as COVID-19 lockdown restrictions continue in the region.
That said, Jordan added that consumers’ spirits have not been brought down by the pandemic, and the presence of ‘pent-up demand’ is likely to drive the recovery of growth very quickly once things open up.
“There is a lot of pent-up demand in the consumers – you would think people would be nervous about travelling and all, but reports have shown that the people are ready and raring to go,” he said.
“What this means is that when vaccine passports are up, we are likely to get more people than we expected moving around and this translates to markets getting their growth back at a faster rate as well as consumers pour back in.
“I don’t just expect this situation to happen for Qatar, but for the entire Middle Eastern region as a whole to regain momentum and growth.”