The United Arab Emirates Consumer
Behaviour, Attitudes and Perceptions Toward Food Products

December 2010

International Markets Bureau
MARKET ANALYSIS REPORT | DECEMBER 2010

Global Analysis
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Inside this Issue





EXECUTIVE SUMMARY

The United Arab Emirates (U.A.E.), while rooted in Middle-Eastern custom, is seeing a more cosmopolitan, consumer-oriented lifestyle evolve, buoyed by oil revenues, massive infrastructure development, and a growing multinational workforce. This new culture is creating unique export opportunities for many within the Canadian agriculture and agri-food industry.

The U.A.E. is a federation of seven states, or emirates, bordering on the Arabian Gulf and surrounded by Qatar, Saudi Arabia and Oman. Together, Abu Dhabi, Dubai, Sharjah, Umm al-Qaiwain, Fujairah, Ra's al-Khaimah and Ajman occupy 83,000 square kilometers with 700 kilometers of coastline along both the Persian Gulf and the Gulf of Oman. Due to this location, the U.A.E. is a significant distribution hub for the Middle East, Eastern Africa, India and some European countries.

The region's financial base was originally dependent on subsistence agriculture, nomadic animal husbandry, pearling, and fishing. The discovery of oil in the 1960s dramatically altered the future of the area and provided the revenue required to move the federation's economy rapidly forward to the point where it is now the second largest in the Middle East, after Saudi Arabia.

Harsh climatic conditions have precluded any major inroads into food self-sufficiency and only about 15% of the federation's requirements, such as dairy, poultry and eggs, seafood, and some fruits and vegetables, are locally produced. There are approximately 150 processing facilities in the federation, producing vegetable oils, soft drinks and juices, snack foods, pasta, confectionery and dairy products (Agriculture and Agri-Food Canada (AAFC), Foodservice Profile – The United Arab Emirates, 2009). This leaves many opportunities to meet the UAE's remaining food and beverage products through import. The foodservice sector is a particular area of growth, given the significant expansion of the tourism industry and the influence of a large foreign workforce. Canadians are part of that workforce with more than 27,000 living and working in the U.A.E.

This report is intended to increase the reader's general understanding of consumers in the U.A.E. and, more specifically, the factors influencing their food purchase decisions. Ensuring that product attributes match the attitudes and values of a target population is an essential element of a sound strategy for entering a new market, or further penetrating an existing one.

DID YOU KNOW?

  • The currency of the U.A.E. is the dirham (AED). 1 AED = CAD$0.27 (October, 2010).

GLOBAL TRADE POSITION

The United Arab Emirates depends on international trade to foster its continued expansion. Figure 1 shows the growth of food imports in response to the demands of the economy, and to a lesser extent, the growth in exports as a result of U.A.E. Government initiatives on product diversification. This demand shows continued opportunity for exporters.

Figure 1: U.A.E. Import and Export of Food Items from World 1970-2009

Figure 1: Description of this image follows.
Description

Figure 1: U.A.E. Import and Export of Food Items from World 1970-2009 $US millions: Imports - .02(1970) .2(1975) .8(1980) .9(1985) 1.4(1990) 2.1(1995) 2.0(2000) 2.6(2005) 10.2(2009), Exports - 0(1970) .008(1975) .1(1980) .2(1985) 0.5(1990) 0.4(1995) 0.5(2000) 1.6(2005) 3.8(2009)

Source: FAOSTAT, 2010

The countries that were most important for U.A.E. exports in 2009 included: Japan 26.5%; South Korea 10.9%; India 10.7%; Iran 7.5%; and Thailand 6.1% (Central Intelligence Agency [CIA], 2010). The countries with the highest import penetration into the U.A.E. in 2009 included China 12.9%; India 12.0%; the United States (U.S.) 8.6%; Germany 6.4% and Japan 6% (CIA 2010).

With just 0.4% of total exports, the United Arab Emirates is Canada's largest market in the Middle East and North Africa, totalling CAD$1.7 billion in 2009. These exports included grains, seeds and fruits, machinery, precious stones, metals and minerals, aircraft and aircraft simulators, as well as electrical, telecommunications, medical and electronic equipment. Imports from the U.A.E. to Canada dropped from CAD$335 million in 2008 to CAD$163 million and included mineral fuels and oils, chemicals, precious stones and minerals, metals, machinery, as well as cosmetics and textiles (Global Trade Atlas, 2010).

Canada imported CAD$4.7 million worth of agri-food products from the U.A.E. in 2009. Top imports included non-alcoholic beverages, green tea, fruit and vegetable juice, sweet biscuits and wheat flour (Statistics Canada, 2010). The U.A.E. is the most diverse market for Canadian food in the region. In terms of agri-food, Canada exported CAD$411 million in canola seeds, non-durum wheat, dried and shelled lentils and peas and ice cream. Seafood has been identified as an export growth opportunity for Canada, with live and frozen lobster, frozen sablefish, ambergris and live mussles topping the list in that category in 2009 (Statistics Canada 2010). Other promising areas include maple syrup, beef, wild blueberries and for foodservice markets, pork products.

Canadian food products are not only consumed in the U.A.E., but are also re-exported to other markets. Approximately 30–40% of total Canadian imports are subsequently re-exported to destinations ranging from Russia to East Africa. For example, most of the canola seed imported into the U.A.E. is crushed into oil and then shipped to Europe; although an increasing proportion is now being sold domestically for human consumption (Al Ananbeh, 2010).

Economy

The United Arab Emirates has become an important oil and natural gas producer and ranks seventh in the world for both proven oil and proven natural gas reserves (CIA, 2009). Revenue from these resources has allowed significant social and economic development in the areas of finance, business, education, transportation, housing, health and welfare. The federation has established a series of "free zones" in centres across the U.A.E. with various types of economic incentives, such as exemptions from corporate taxes or import/export duties, to encourage investment and commercial development in specific sectors. As a result, Dubai is gaining a reputation for being the trading, financial and tourist hub of the emirates, while Abu Dhabi is expanding beyond its petrochemical centre into the aerospace, defence, information technology and environmental and green energy industries. While the construction mega-projects, and the petroleum, tourism and banking sectors of Dubai and Abu Dhabi grab media headlines, it is the small and medium-sized enterprises that constitute about 90% of all businesses in the federation (Kawich, 2010).

In 2009, the U.A.E. enjoyed a per capita Gross Domestic Product (GDP) of US$38,900 on a purchasing power parity basis, this is slightly higher than that enjoyed by Canadians, which was US$38,200 that same year (CIA, 2010). The U.A.E., particularly in Dubai, was affected by the global financial crisis, but the U.A.E. Government predicts a growth in GDP of 2.5% in 2010 (Walid, 2010).

With the exception of the hospitality and retail industries, workdays are generally eight hours long. The traditional split-shift day is now moving toward the U.S. and European model of working hours between 9a.m. and 5p.m. Part-time employment is strictly controlled and generally open to nationals and those expatriates with residency of at least a year. The weekend system followed in the UAE follows Muslim tradition where Friday is the day of rest. Most organizations take Saturday as the second day of rest, although some more traditional businesses take Thursday. During the holy month of Ramadan, working hours in all organizations are shortened by at least two hours.

Political Structure

The United Arab Emirates has a long history of being a main economic hub in the Middle East. This was recognized by colonial Britain, which established the basis of the contemporary U.A.E. through a series of protectionist treaties with individual emirates, collectively known as "The Trucial States". The end of those agreements with the United Kingdom and the first export of crude oil coincided in the 1960s, offering a unique opportunity for the region to prosper independently.

By 1971, the modern United Arab Emirates was created and the process of developing a political and administrative structure combining both traditional and contemporary values was established. The constitutionally based federal system of government includes: the Supreme Council; the Council of Ministers; the Federal National Council; and the Federal Judiciary.

The Supreme Council is the highest federal authority possessing both legislative and executive powers and is composed of the rulers of each emirate. It elects the President, Vice President and the Council of Ministers which functions much like a cabinet. The Parliament is the Federal National Council with 40 seats allocated to the individual emirates on the basis of population and size. Over the past several years, political reform has allowed elections, through an Electoral College system, for half of these seats, and has begun to expand its legislative role. In addition to the independent Federal Judiciary and Supreme Court, all emirates have secular courts to hear criminal, civil and commercial matters and Islamic courts for family and religious disputes. Each of the seven emirates has its own local government with respective municipalities and departments.


DEMOGRAPHICS

Population

Recent reports from the U.A.E. Government suggest that their population reached 8 million in 2010 (U.A.E. National Bureau of Statistics, 2010), however, international organizations such as the United Nations have estimated total numbers at just under 5 million. This discrepancy can be partially explained by the fact that approximately 75% of those in the country are part of a huge transient expatriate-based workforce: a percentage that has been increasing over time at the expense of the number of Emirati people . This expatriate workforce tends to be men and their sheer numbers has tilted the gender balance. In 2010, it was estimated that there was a 2.2 male/female ratio in the total population, higher in the 15-64 age range (CIA 2010).

In spite of the inconsistency, it is clearly evident that the U.A.E. populat ion growth rate has surpassed that of any other country in the world (CIA, 2010). Abu Dhabi is the most populated emirate, followed by Dubai and then Sharjah : combined, they are home to approximately three quarters of the total residents.

Figure 3: Population Pyramid United Arab Emirates 2005

Figure 3: Description of this image follows.
Description

Figure 3: Population Pyramid United Arab Emirates 2005: Figures 3 and 4 compare the population growth and distribution from 2005 to 2050 and demonstrate the influence of the expatriate workforce.

Source: ESCAW, 2010

The U.A.E.'s tremendous economic growth and development in the past forty years has attracted the population to the cities and now approximately 86% are concentrated in urban areas (TANMIA, 2010).

Statistically, the aging of the population of the U.A.E. is not as significant as in other countries, as it is biased by the significant non-national presence, and the fact that non-nationals leave the country by retirement age. Figures 3 and 4 compare the population growth and distribution from 2005 to 2050 and demonstrate the influence of the expatriate workforce.

Improved economic, social and healthcare environments have had a positive affect on many measures of development for nationals. U.A.E. women can expect to reach the age of 80, with men reaching 77, and the "healthy life expectancy" for both men and women, defined as the number of years that a person can expect to live in full health, is 68 (Underwood. 2009). This aging national population has started to influence the provision of elder care in the federation. The U.A.E. has a widely accessible home support program to assist families in the care of seniors; however, the government is now looking to improve its system of assisted living and nursing homes to accommodate anticipated growing numbers of older nationals.

In the period 1990 to 2007, the birth rate declined from 4.4 children per woman to 2.3, according to the World Health Organization's (WHO) World Health Statistics (2009). This drop has been attributed to the growing number of female expatriate workers in the U.A.E., but also to the changing role of Emirati women in society. Women are now better educated, have a greater interest in careers and tend to marry later, all factors that lead to lower birthrates.

The decline of the number of nationals and the resulting impact on U.A.E. society is of great concern to the Government. As a result, the U.A.E. has put significant resources towards understanding the effects that expatriates have on national identity and how to ensure that Emirati history and heritage, Arab culture and the Islamic faith are preserved.

Figure 4: Population Pyramid United Arab Emirates 2050

Figure 4: Description of this image follows.
Description

Figure 4: Population Pyramid United Arab Emirates 2050: Figures 3 and 4 compare the population growth and distribution from 2005 to 2050 and demonstrate the influence of the expatriate workforce.

Source: ESCAW, 2010

Ethnicity

U.A.E. culture is based around its Middle-Eastern core. Although English prevails in the business world, Arabic is the national language and Islam is the predominant religion. However, the U.A.E. has widely accepted other cultures as the catalyst to developing their economy, and has generally accommodated the associated new needs for food, living style, language, religion and entertainment. The three largest groups of expatriates hail from India, Pakistan, and then Bangladesh. Members of other Asian communities, including China, the Philippines, Thailand, Korea, Sri Lanka, Afghanistan and Iran make up a significant proportion of the workforce, as do Western expatriates from Europe, Australia, Northern Africa, Africa and Latin America (National Media Council, 2009).

Education

Training and education in the U.A.E. is a high priority. School for both boys and girls is compulsory from primary to secondary levels and is provided free for nationals through the primary, secondary, college and university levels. There are also private educational establishments for Emirati children as well as offering programs for the expatriate communities that follow the curriculum of the students' countries of origin.

Literacy in the U.A.E. has improved dramatically, facilitated by the widespread availability of various types of adult education programs. The economy demands new skill sets and with an expatriate workforce easily available, it has become essential to implement an organized program of vocational training centres for nationals to ensure they can compete in the job market. The Women's Federation of the UAE has played an important role in providing non-formal educational opportunities for women to allow them to participate.

Women in the United Arab Emirates

The Constitution of the U.A.E. guarantees the same legal rights for men and women. Women have made significant inroads in education, business and government.

  • The literacy rate for women in 2007 was 90%.
  • The number of female nationals enrolled in higher education is 24% more than that of national men.
  • 77% of U.A.E. women continue to post-secondary education in all disciplines.
  • 22% of the Federal National Council are women, and four cabinet ministers are women.
  • In 2008, the first female judge was sworn in.
  • 66% of government sector workers are women and women can be found in police and military roles

Source: U.A.E. Women in the United Arab Emirates: A Portrait of Progress. 2009

Households

Households in the United Arab Emirates can be broadly classified into three types: national; expatriate; or single. Nationals tend to live as extended family groups in homes and villas outside city cores and have households of six or seven members. Professional expatriates generally live in rental apartments within the cities, although more are moving toward home ownership, and have households of three to four. Recent financial stress has resulted in more expatriates moving their families back to their native countries contributing to a rise in single households. There are also temporary camps set up for expatriate labourers working on many of the construction mega-projects across the U.A.E.

Although it has been the tradition that several generations share a family home, changes in Emirati society and financial wealth are starting to change this practice. Young nationals generally between 25 and 34 are now more likely to live alone prior to marriage and the establishment of their own families. The movement toward more women in the workforce, coupled with a growing senior population is beginning to change how the elderly are supported, resulting in more retirement and nursing homes being built.


HEALTH AND LIFESTYLE

The highly diverse population, coupled with strong tourism, has created an environment centred on entertainment. Eating out, shopping, going to movies, taking in the many new attractions and enjoying the vibrant nightlife are all signatures of U.A.E. lifestyle.

Eating Out

The urban centres of the United Arab Emirates offer unlimited choice in foodservice for nationals, tourists and international workers. In fact, there are an estimated 11,000 stand-alone restaurants in the UAE, with approximately 500 added each year. Expatriates have many options for a taste of home. For example, many Asian labourers prefer quick service restaurants centred on their national cuisine, so many authentic Pakistani, Indian, Thai, Filipino, Syrian, Turkish, Indonesian and other Asian-oriented restaurants can be found throughout the larger cities. Demand for more expensive and quality restaurants focused on global cuisines is driven by tourism and the North American and European workers who hold professional positions at higher salaries. Western-based fast food chains such as McDonald's, Burger King, Pizza Hut, and Kentucky Fried Chicken (KFC) are household names, and are particularly popular with the young. Some chains have adopted local culture by adding curtained private family sections in the restaurants and drive-thrus to accommodate the common practice of outdoor dining, and some stay open 24 hours to accommodate the trend of eating quite late in the evening to avoid the heat of the day. Weekends are usually the busiest days for restaurants, cafés and fast food outlets since so many people spend their time out with family enjoying a meal. This abundance of foodservice options has made eating out an important aspect of U.A.E. life (Figure 5).

Restaurants, pubs/bars and clubs that are located within a hotel are permitted to serve liquor, as are those who hold a special license allowing them to sell alcohol to non-Muslim clientele over the age of 21. Non- Muslim residents in most Emirates require an alcohol license to buy and consume alcohol in their homes.

Figure 5: Eating Out More Important in the U.A.E. than the Global Average

Figure 5: Description of this image follows.
Description

Figure 5: Eating Out More Important in the U.A.E. than the Global Average (% of respondents) : Once a week (Full Service Restaurant) - UAE 28% Global 14%

Source: Datamonitor, 2009

Emirati Cuisine

The influx of global cuisines has diluted the traditional food history of the Emirates, but its profile is being raised by organizations such as the Emirati Culinary Guild, the success of food-based trade shows such as "Taste of Dubai" and "Gulfood" and the growth in foodservice options.

Emeriti cuisine is centred on fish, rice, bread, dates, yogurt, homegrown vegetables, and meat from sheep, goats, and camels. The distinctive taste is provided by the use of a spice mixture call biz'har, which features a type of dried lime called loomi, and herbs such za'atar or Arabic thyme. Teas, whether traditional or spiced with za'atar or mint, are always at hand. Jugs of lime juice are popular, as is laban, a drinking yogurt derived from the milk of goats or cows and often spiked with ginger.

Generally lunch is the main meal of the day and features rice, often coloured, flavoured and mixed with nuts such as pistachios or almonds, dried fruits or meat. Fish and seafood figure prominantly, however beef, lamb and now more frequently chicken, are features. Grains and beans are plentiful, as are both unleavened and yeast breads. Sweets are generally served with mid-morning tea or coffee rather than dessert after a meal.

Health Indicators

Significant government investment, as well as the growth of the private healthcare sector, has allowed the U.A.E. to make substantial progress in many areas of health. Increasing the number of health care professionals, improving sanitation, building hospitals, immunization programs, and creating healthcare networks offering health screening and education programs has improved many health indicators related to infants and children as well as life expectancy. However, the social and economic advancements related to rapid development have altered the overall lifestyle toward less physical activity and poor choices in diet. Although statistics vary slightly, it is agreed that approximately one third of people in the U.A.E. are now obese and three-quarters are overweight. The frequency of obesity among U.A.E. youth is two to three times greater than the recently published international standard and the emergence of adult chronic illnesses such as cardiovascular diseases and Type 2 Diabetes, is now common in children (Al-Haddad, Little and Ghafoor, 2005). According to the Health Authority of Abu Dhabi, the UAE has the second highest level of diabetes in the world at 20% and predicts that this level will rise to 24% by 2025. Prevalence of diabetes for the region is similar between men and women; however, percentages are slightly higher in men under 60 years and women over 60 years.

Not surprisingly, other lifestyle-related chronic diseases are common. Systems to capture reliable statistics on specific health care issues are now being improved, but it is believed that one quarter of all deaths in the U.A.E. can be attributed to cardiovascular disease (CVD) and that the incidence of cancer is at least equal to the impact of CVD's. Another major health concern is asthma, which is believed to afflict around 15% of the total population, a significant portion of which is children (McMeans, 2010).

One of the most significant causes of death for adults and children relates to traffic accidents, in spite of modern cars, good roads and driving conditions. Accidental injury, at 63%, is the number one cause of death among children under the age of 14 and the majority of these deaths were the result of car accidents (Grivna, 2008). Statistical data also confirms that nationals are nearly twice as likely to die in road accidents as non-nationals, and men under 35 are most at risk (Health Authority – Abu Dhabi. 2009).

Smoking has long been a tradition in Arabian culture, however, the link between tobacco use and disease is forcing the U.A.E. Government to institute both legislation banning smoking and anti-smoking awareness campaigns. According to the World Health Organization, there is alarming growth in smoking among youth aged 13 to 15, where 25% of boys and 13.2% of girls are smokers.

The U.A.E. is responding to this overall health crisis with wide-ranging promotion and prevention initiatives, as well as providing increased specialized patient care services. One example is a comprehensive new nutrition strategy based around World Health Organization guidelines (United Arab Emirates Ministry of Health 2010).


CONSUMPTION AND EXPENDITURE

Consumer demand for goods and services is an important source of economic growth in the U.A.E. (U.A.E. National Bureau of Statistics 2010). The global economic downturn did slow the pace of spending, however, the steady increase in population ensured its continued growth, a trend that Euromonitor predicts to increase 58% by the year 2015. Spending on food and non-alcoholic beverages will contribute to this overall increase, but will decrease as a percentage of the total over time (Figure 6).

Figure 6: Actual Expenditure (US$) and Projected Growth (%) in the U.A.E. by Product Type
Product Type 1995 2000 2005 2009 Projected Growth 2010-2015
Food and non-alcoholic beverages 1078.9 1031.3 1576.7 1994.2 9.9
Alcoholic beverages and tobacco 30.0 35.5 63.3 89.2 27.4
Clothing and footwear 470.3 546.9 1001.6 1418.4 32.7
Housing 2573.0 3060.9 5782.6 8410.6 35.4
Household goods and services 447.5 517.0 941.6 1337.7 32.9
Health goods and medical services 124.9 172.2 337.8 519.9 43.9
Transport 766.2 922.3 1745.1 2521.9 35.0
Communications 272.5 301.5 611.7 880.3 37.5
Leisure and recreation 226.9 277.9 538.7 802.7 40.2
Education 330.1 401.9 789.5 1165.3 38.0
Hotels and Catering 482.1 646.5 1437.4 2295.8 52.8
Misc goods and services 414.5 478.1 955.6 1409.1 42.6
TOTAL 7217.0 8391.8 15781.6 22845.1 35.6

Source: Euromonitor, 2010

As one would expect from such a mix of employment, nationalities and cultures, there is great diversity in terms of consumption and expenditure patterns. A 2009 expenditure survey from the Emirate of Dubai Statistics Centre offers an example of those differences (Figure 7). Less affluent workers, primarily foreign labourers, are supporting their families at home and try to minimize living expenditures as much as possible. Many choose to live with fellow workers in a collective household where food, beverages and tobacco, housing, transportation and telecommunications are the main expenditures. Professionally-oriented expatriates are more affluent with considerable purchasing power and engage in shopping for more U.S. and European-based products. Many have their families with them, so there is a demand for recreation and education and more upscale housing, furniture, food, clothing, and restaurants. Additional expenditures are made by nationals on clothing and footwear, as well as their homes and services. For all those living in the U.A.E., housing costs are the most draining on household budgets.

Housing

The influx of foreign workers has created a huge demand for housing and this pressure has significantly increased both rent and real estate values. Recently, the U.A.E. Government changed land ownership laws to allow expatriates to own a house within specific areas of the federation, creating a boom in home construction. Most housing projects are booked well in advance and there is strong demand for further projects of this nature. The U.A.E. Government has also been investing heavily in housing for nationals, going as far as donating houses or land for building new residences.

Figure 7: Annual Percentage Expenditure by Type of Household,
Emirate of Dubai, 2009
Major Expenditure Groups National Households Non-national Households Collective Households Total Households
Food, beverage and tobacco 13.5 12.8 16.3 13.3
Clothing and footwear 7.2 3.1 2.7 3.9
Rents and housing maintenance 41.4 41.2 42.9 41.4
Furnishings and household services 6.3 2.2 1.1 3.0
Medical care and health services 1.8 2.4 2.3 2.2
Transport and telecommunications 15.9 17.9 14.1 17.1
Recreation and education 5.6 9.6 1.3 8.0
Miscellaneous goods and services 8.3 10.8 19.3 11.1
TOTAL 100.0 100.0 100.0 100.0

Source: Emirate of Dubai, Household Expenditure and Income Survey, 2009

Transportation and Telecommunications

There is a heavy dependence on cars for transportation which has only grown with the increase in population size. Buses and taxis are available with most users being labourers or expatriates new to the country. The U.A.E. government is investing heavily in new transportation infrastructure, including subways and water taxis, to accommodate this growing need. The U.A.E. has the highest penetration levels for both landline and mobile phone users in Arab countries, with mobile accounts outnumbering the population. Internet penetration is also the highest in Arab countries and on a par with many developed countries.

Food and Beverage

As in all categories, expenditures on food and non-alcoholic beverages have risen steadily: 43% between 1995 and 2007. The recession had limited impact on food spending, but a recent survey of 400 Dubai residents found that 58.8% did not reduce their spending on groceries in 2009 (Renno 2010). Eating patterns have changed with growing wealth and changing demographics and Figure 8 projects where the most growth is expected.

Figure 8: U.A.E. Historic and Forecasted Per Capita Consumer
Expenditure on Food
Categories 1995 2000 2005 2010 2015 2020
Bread and Cereals 129.6 120.6 187.4 243.7 284.8 333.8
Meat 214.2 205 312 391.9 449.2 516.1
Fish and Seafood 76.9 80.2 113.9 123.5 125.4 128.7
Milk, Cheese and Eggs 136.1 132.4 204.8 260.1 298.5 344.6
Oils and Fats 34.9 28.6 50.3 67.1 80.2 97.4
Fruit 87.9 85.0 134.8 166.0 186.2 211.2
Vegetables 114.3 103.1 162.8 202.1 224.4 252.4
Sugar and Confectionery 58.5 50.5 73.6 87.9 93.8 100.7
Other Food 140 146.4 218.7 263.5 288.5 318.2
Total Food 992.3 951.8 1458.3 1805.9 2031 2303.2
Coffee, Tea and Cocoa 22.5 23.8 37.1 48.1 55.1 64.4
Mineral Waters, Soft Drinks, Juices 64.2 55.7 81.4 97 105.4 115
Total Non-Alcoholic Beverages 86.6 79.5 118.4 145 160.5 179.4
Spirits 0.6 0.7 3.2 7.5 11.8 16.8
Wine 0.2 0.4 2.7 6.3 9.8 13.9
Beer 1 1.4 4.6 9.1 13.5 18.8
Total Alcoholic Drinks 1.8 2.5 10.5 23 35.1 49.5

Source: Euromonitor 2010

The U.A.E.'s First Farmers' Market

Baker and Spice, a Dubai restaurant dedicated to local food opened the U.A.E.'s first Farmers' Market in April, 2010. The farmers were from Al Ain, Abu Dhabi and Dubai and offered native and seasonal products including: tomatoes, eggplants, zucchini, fennel, strawberries, lettuces, local and wild rocket, broccoli, corn, and potatoes (Dubai City Guide, 2010).

Tastes and Preferences

Food Retail

Consumers in the three largest emirates tend to shop more at hypermarkets and frequent the smaller shops and convenience stores for last-minute food needs. In the more distant suburbs and the less-populated areas of the federation, smaller grocery and convenience stores play an important role in food shopping. The number of hypermarkets is increasing steadily with retail chains such as Carrefour, Spinneys and Lulu dominating the big format supermarket trade. These key retailers tend to partner with foreign companies to procure imported food products directly, while small format grocery retailers rely on consolidated deliveries for replenishing their stock levels.

The continued growth in both affluence and the expatriate population has created the need for a diverse range of food products in the U.A.E. The food retail sector has responded by providing a range of foods and ingredients suiting the tastes of the different ethnic groups in the country. Datamonitor has evaluated a number of food categories and projected growth at retail in most areas, particularly chilled foods, bakery/cereal products, savoury snacks and pasta/noodles (Figure 9).

Figure 9: U.A.E. Market Value Forecast ($US millions)
Category 2008 (US millions) 2013 Projections (US milllions) CAGR (%)
Baby Food 7.7 10.4 6.1
Bakery/Cereal 1027.6 1544 8.5
Canned 13.6 16 3.2
Chilled 111.5 171.4 9
Dairy 546.9 709.6 5.3
Dried 143.6 180.7 4.7
Frozen 183.5 237.8 5.3
Hot Drinks 225.6 259.3 2.8
Ice Cream 48.4 61 4.7
Meat, Fish and Poultry 251.1 351.4 6.9
Oils and Fats 39.9 45.3 2.5
Pasta/Noodles 59.6 83.8 7
Savoury Snacks 85.4 124.4 7.8

Source: Various Datamonitor Market Forecast Reports, 2010

Co-operatives are a unique feature of the U.A.E. retail sector and account for about 30% of UAE total retail sales in the U.A.E. Some co-ops receive support from the local government of the emirate in which they are established. They also attract broad-based support, particularly from U.A.E. nationals, who usually hold shares in these coops and receive an annual rebate on their purchases. Coops are known for competitive prices on a more limited range of products.

In terms of grocery shopping, recent research from Datamonitor has found that attributes such as quality and freshness, store location and customer service determine where U.A.E. consumers do their shopping (Figure 10). Freshness has recently become a more important factor in purchasing behaviour due in part to increased attention to health issues, the availability of fresh products due to imports, and retailers' move to formats highlighting these fresh products.

Figure 10: Most Critical Factors in Determining Shopping Destination for U.A.E. Consumers

Figure 10: Description of this image follows.
Description

Figure 10: Most Critical Factors in Determining Shopping: convience of location 24%, lower prices 12%, freshness or quality 38%, choice 2%, customer service 14%, promotions and discounts 6%, habit 4%

Source: Datamonitor, 2009

Foodservice

Hotels, restaurants and institutional catering companies are all major players in the U.A.E. foodservice sector, with restaurants serving as the primary purchasers of food and beverages imported by the U.A.E. By 2012, food and drink purchases by U.A.E. restaurants are expected to reach US $1.2 billion (Datamonitor, 2008).

Restaurants

Dining out is an important element of daily life in the U.A.E. for tourists and residents alike, and there are over 11,000 stand-alone restaurants established to meet this need (Manoukian, 2008). Dining outlets range from high-end restaurants and buffets, to fast food chains and cafés and almost all offer take-out and/or delivery services. The money spent in a restaurant varies on the type of dining experience. For example, a casual dining restaurant generates a per-person average of CAD$20 for lunch, excluding alcoholic drinks (PKF International Limited, 2009). According to their research, the most popular restaurants, in order of favourite cuisine, were: Continental/Indian/Chinese; Italian; French; Mexican; Thai; Arabic/Lebanese/Iranian; and Japanese.

Weekends and Islamic holidays are the busiest days for restaurants and buffets in the country, especially during the holy month of Ramadan when many Muslims like to enjoy a restaurant meal after a day of fasting (Dubai FAQs, 2009).

Institutions

The continuing expansion of schools, hospitals, and large construction camps are important factors that contribute to the development of the institutional food catering sector in the country. The institutional catering sector in the U.A.E. is divided into two sub-sectors: in-flight catering and industrial catering.

In-flight catering: According to the report TRENDS…food in the United Arab Emirates (2009) prepared by the Consulate of Canada in Dubai, in-flight catering business in the UAE is dominated by one major company, Emirates Catering, which serves a large percentage of the U.A.E. airlines and airports. More than 150,000 meals are prepared and served to airline passengers every day in the U.A.E., with over 50% delivered in Dubai. Meal costs vary depending on the class and length of the flight (Manoukian, 2008).

Industrial catering: Although there are a large number of registered catering companies in the U.A.E., nearly 90% of this sector is dominated by five companies. An estimated 1.5 million meals are prepared daily to serve naval contingents, freight and cruise liners, offshore and onshore oil rigs, corporate catering, company cafeterias, hospitals, universities, schools, labour camps, clubs and prisons. Institutional caterers demand very competitive prices and are able to negotiate aggressively due to the large volumes involved.

Hotels

There are over 400 hotels currently operating in the U.A.E., with a concentration in the Emirates of Dubai and Abu Dhabi. When coupled with the capacity in short-lease apartments, the U.A.E. has the second-largest accommodation capacity in the Middle East after Egypt. Approximately US $2.0 billion worth of food products were consumed in this foodservice sub-sector in 2007 (Manoukian, 2008). Foodservice is a critical component of the hotel industry as 40-50% of the establishment's revenues come from the foodservice facilities. Hotels, under the direction of the executive chef, mostly buy their requirements from the local market, which makes them prime customers for food and beverage importers and distributors.


TRENDS

Food for Health

The surge in obesity and chronic disease rates in the U.A.E. has focused both the media and the government on providing information and initiatives related to healthcare and nutrition. This has created real opportunities in the food for health area as consumers will be increasingly making food choices to meet both general health and specific concerns. This change is already evident with 57% of U.A.E. consumers saying they are making a conscious attempt to eat in a more healthful manner (Datamonitor 2009). There are many ways to take advantage of this interest from product formulation to packaging.

Portion Size

Portion control is a common option for consumers wanting to improve health: 43% of U.A.E. consumers say they are trying to eat and drink smaller portions all or most of the time, while consumers of all all ages and both genders are showing interest in smaller offerings (Datamonitor. 2009). Consumers, particularly in the U.A.E., enjoy indulgence, so premium products offered in small or single-serve sizes can provide a pleasure-based eating experience while still controlling fat and calories. Portion-controlled offerings also appeal to the large number of single men working in the federation. Snacking as a result of a skipped or delayed meal, or as a treat opens opportunities for smaller servings that can balance health, convenience and taste.

Labelling

Sixty-one percent of U.A.E. consumers say they use labelling to drive food and drink purchasing decisions, in contrast to the 44% of global respondents (Datamonitor, 2009). Country of origin information and the expiry date are important and with nutrition awareness starting to build, consumers are beginning to look for ingredient listings and products with "free from" type messages as well as specific information on fats, calories and carbohydrates. Label information in Arabic is mandatory at retail and there is a challenge in making this information easily understood, due to the number of ethnicities in the federation and their limited familiarity with nutrition.

Figure 11: U.A.E. Consumers. By Age, Interested in the Link Between Food and Beverage Consumption and Health and Wellbeing

Figure 11: Description of this image follows.
Description

Figure 11: U.A.E. Consumers. By Age, Interested in the Link Between Food and Beverage Consumption and Health and Wellbeing: interested and actively buying - 38%(18-24) 42%(25-34) 43%(35-49) 71%(50-66), interested but not actively buying 49%(18-24) 49%(25-34) 46%(35-49) 12%(50-66), not interested 14%(18-24) 9%(25-34) 11%(35-49) 18%(50-66)

Source: Datamonitor Consumer Survey, April/ May 2009

Functional Food

Food products with increased nutrition are starting to appeal to U.A.E. consumers, with more than 50% saying they are more likely to actively seek out functional food products with added food benefits 'all or most of the time' (Datamonitor, 2009). Of particular interest are people over 50 years of age who are more naturally interested in maintaining health.

Convenience

Takeaway and Delivery Foodservice

Approximately one half of U.A.E. residents are eating takeaway meals at home at least once a week (Figure 12), a trend that offers growing opportunity (Datamonitor, 2009). This is evolving beyond picking up a fastfood meal or sandwich from the convenience store, to a more restaurant- oriented meal.

Figure 12: Frequency of Takeaway Meals Eaten at Home in the U.A.E. and Globally

Figure 12: Description of this image follows.
Description

Figure 12: Frequency of Takeaway Meals Eaten at Home in the U.A.E. and Globally (% of respondents): Every day - UAE 3% Global 2%, 5 or more times a week - UAE 2% Global 2%, 4 times a week - UAE 2% Global 2%, 3 times a week - UAE 5% Global 3%, Twice a week - UAE 14% Global 7%, Once a week - UAE 26% Global 18%, Never/less than once a week - UAE 47% Global 66%

Source: Datamonitor, 2009

Frozen

The traditional image of frozen food being a budget conscious choice is being shaken up by a growing number of manufacturers focused on positioning the freezer as an extension of the pantry and offer premium products that promise improved nutrition, quality, convenience and safety. This is particularly powerful in regions such as the Middle East where the majority of foodstuffs are imported, and offers excellent opportunities for the ready meal market. Ice cream remains a popular year-round purchase for U.A.E. residents

Beverages

The combination of a hot climate, along with the culture, population growth and spending power of the U.A.E., make this region an important market for beverages. Coffee, particularly fresh coffee, is the most popular hot drink, followed by tea, another traditional drink of many cultures represented in the U.A.E. The region has a strong "café" culture and spending an hour at a coffee shop would be a normal part of the day for most residents. Growth in terms of value and volume is being driven by more product choices such as herbal or green teas, or in terms of foodservice, with the expansion of chains such as Starbucks. The market for carbonated beverages is well-established, but with the growing awareness of health issues, some competition from fruit and vegetable juices is expected. The growing expatriate population is behind the growth of alcoholic drinks. Wine consumption is growing, however beer maintains the highest level of sales value.

Organic

The claims related to the improved nutrition and quality of organic food and beverage products have drawn U.A.E. consumers who are interested in healthy eating to the category. Figure 13 demonstrates the level of interest of UAE consumers in purchasing organics as compared to consumers in other countries. Recent research from Datamonitor has shown that UAE consumers did not move away from purchasing higher quality and premium products during the recession and they predict steady growth in organic sales over the next five years. It is also expected that the emphasis that governments in the Middle East are placing on the development of organic farming in the region will strengthen consumer interest.

Figure 13: Reported Purchase Behaviour for Organic Food and Beverages in Various Countries (%)
  All the time Most of the time Total all/most of the time Occasionally Rarely Never
Australia 0.03 0.1 0.13 0.33 0.3 0.24
China 0.05 0.34 0.39 0.47 0.12 0.02
India 0.11 0.31 0.42 0.37 0.17 0.05
Japan 0.02 0.06 0.07 0.43 0.35 0.14
South Korea 0.06 0.25 0.31 0.54 0.14 0.01
Germany 0.04 0.12 0.16 0.38 0.27 0.19
Netherlands 0.01 0.06 0.07 0.22 0.32 0.39
Russia 0.13 0.61 0.74 0.2 0.05 0.02
Sweden 0.04 0.13 0.18 0.35 0.3 0.17
United Kingdom 0.02 0.09 0.1 0.35 0.33 0.22
Brazil 0.1 0.21 0.31 0.35 0.24 0.1
Saudi Arabia 0.1 0.2 0.3 0.38 0.24 0.08
UAE 0.07 0.25 0.32 0.39 0.2 0.08
United States 0.03 0.09 0.12 0.32 0.28 0.28
GLOBAL 0.05 0.18 0.22 0.37 0.25 0.16

Source: Datamonitor, 2010

Halal

Halal food is prepared according to Islamic dietary laws and regulations that date back centuries. In its modern context, Halal food is defined as safe and not harmfully prepared, not containing non-halal and najs (unclean) ingredients and is processed and manufactured using equipment that is not contaminated with things that are najs. Food items that are prohibited (haram) include: swine; animals that were improperly slaughtered; alcohol and intoxicants; carnivorous animals, birds of prey and land animals without external ears; blood; contaminated foods and foods containing questionable ingredients.

The global market for halal products was estimated at US$632 billion a year in 2009, representing approximately 16% of the global agri-food industry (Power, 2009). In accordance with religious requirements, all Muslims must eat, drink and take medicines that are halal, which is fuelling a large and growing demand for halal products. Considering population growth rates and increasing incomes, it is estimated that in the future, halal food may account for 20% of world trade in food products.

Consumers are seeking a wide-range of halal-certified products in varied food categories, as well as differentiated and value-added halal products that are not already in the market. Halal products are also growing in popularity among non-Muslim consumers due to concerns about the humane treatment of animals and the perception that halal products are healthier and safer. This is an area where Canadians may have a competitive advantage given that Canada has a reputation as a supplier of safe and high-quality products.

Further Opportunities

Canada's reputation for quality food and beverages is resonating in the U.A.E. Recent AAFCreports and analyses have identified a number of promising export opportunites.

Seafood Products

The U.A.E. has rapidly emerged as one of the top destinations for premium seafood products thanks to the unique combination of demographics, economics and tourism. As a result, there is an increasing demand for high-end seafood products such as lobsters, scallops, and high quality fish. In 2008, hotels and restaurants in the U.A.E. purchased US$111 million in seafood products from importers and distributors, an increase of 46% from 2003. The demand from the U.A.E. foodservice sector for seafood is expected to grow by 42% and reach US$158 million by 2012 (Datamonitor, 2008). Lobster, both live and frozen is the fastest growing Canadian seafood export to the U.A.E., being popular for its premium quality and reasonable price. In 2009, the total export value of lobsters (live and frozen) from Canada to the U.A.E. reached CAD$3.3 million, a significant increase over 2007's value of CAD$1.7 million. Canada began exporting mussels to the U.A.E. in 2008 and is showing signs of similar growth potential (Statistics Canada, 2010).

Maple Syrup

Maple syrup has become a popular item to serve with breakfast or dessert in U.A.E. hotels and restaurants. It is usually served with pancakes, waffles, cereal, fruit, and tea. Among U.A.E. consumers, maple syrup is recognized as a healthier alternative to white or brown sugar. Canadian maple syrup exports to the U.A.E. started to rise in 2004, with exports of CAD$14,631, increasing to $85,032 in 2009 (Statistics Canada, 2010).

Meat Products

The fast-growing population of non-Muslim visitors and European and North Americans expatriates is fuelling a demand for pork products in the foodservice sector in the U.A.E. Datamonitor predicts a growth rate of 10% per year and expects that the market will be worth US$71 million by the year 2012. Canadian exports are responding to this trend and have grown steadily with the total value reaching US$6 million in 2009 (Global Trade Atlas). The growing number of Muslim tourists and Islamic hotels in the U.A.E. is expected to mean greater demand for halal beef products. India, Australia and New Zealand are currently the key halal beef exporters to the U.A.E. In 2007, Canada began exporting bone-in and boneless halal-certified Under Thirty Months (UTM) beef to the federation.

Bison is an interesting niche market. The Canadian Bison Association has launched a new initiative to increase exports of Canadian bison to the Middle East by establishing an online presence, expanding trade markets to the retail and food service sectors and initiating a consumer education and awareness program. Year to date comparisons between 2009 and 2010 show the value of bison meat exports into the UAE increased from CAD$19,000 to CAD$77,000 and a volume increase of over 250% to 2404 kg. (AAFC, Bison Market and Supply Update 2010).

Wild Blueberries

Blueberries are seen as a premium fruit in the U.A.E., due to their high anti-oxidant content. The unique flavour and nutritional value of blueberries has led to increasing popularity among health conscious U.A.E. consumers. Foodservice businesses have started to include more items on the menu that use blueberries as ingredients. The first export of frozen wild blueberries from Canada to the U.A.E. was in 2007, with an export value of CAD$105,599 (Statistics Canada, 2009).


CONCLUSION

The United Arab Emirates has many opportunities for Canadian companies who are willing to understand the combination of its unique demography, culture and government regulations. Canada is well-positioned in a number of areas and can look to consumer trends in nutrition, halal, and convenience for additional export prospects. Companies can use the insights from this report to help them tailor their marketing strategies for the U.A.E.


KEY RESOURCES

  • Agriculture and Agri-Food Canada. (2010). Bison Market and Supply Update.
  • Agriculture and Agri-Food Canada. (2009). Factsheets – United Arab Emirates - At a Glance.
  • Agriculture and Agri-Food Canada. (2009). Food Service Profile – United Arab Emirates.
  • Agriculture and Agri-Food Canada. (2008). Global Halal Food Market Brief
  • Agriculture and Agri-Food Canada. (2008). TRENDS…Food in the United Arab Emirates – Retail Grocery Sector.
  • Austrade (June 2010). Food to the United Arab Emirates. Australian Government
  • Central Intelligence Agency. "The World Factbook".
  • Datamonitor (September, 2009). Profiting From Consumer Mega-Trends in the UAE and Saudi Arabia: Health. Datamonitor (April 2010). Offering Ethicality and Sustainability in Food and Drinks.
  • Datamonitor (October 2009).The Global Economic Crisis: The Impact on Consumer Attitudes & Behaviors in the UAE and Saudi Arabia.
  • Datamonitor (May, 2009). The Impact of the Global Economic Downturn on the UAE Consumer Retail Sector: Implications for 2009.
  • Dubai City Guide. Baker & Spice Holds First Farmers' Market April 18, 2010
  • Emirate of Abu-Dhabi. Health Authority. 2010.
  • Emirate of Abu-Dhabi, Statistics Center. 2009. Household Expenditure and Income Survey. 16pp
  • Euromonitor International. (October 2008). Consumer Lifestyles in the United Arab Emirates
  • Foreign Affairs and International Trade Canada. International Trade: Fast Facts on Canada-United Arab Emirates (UAE) Commercial Relations.
  • Export Development Canada: (September 2009). Country Profile: UAE.
  • PKF International Limited. The Restaurant Industry in the UAE. October 2009.
  • Power, Carla. 2009 May 25. "Halal: Buying Muslim" In Time.
  • Renno Communications Group. January 20, 2010 Echo Trends' Latest Report Reveals Dubai Consumers' Brand Preferences
  • Underwood, Mitya and Jonathan Gornall. 2009 June 21. "UAE birth rate falls by nearly 50%". In The National.
  • United Nations. Economic and Social Commission for Western Asia. General Information UAE
  • United Nations. Economic and Social Commission for Western Asia. (November 2009). The Demographic Profile of the Arab Countries, Technical Paper 9.
  • United Arab Emirates. (2010). Analytical Report on Economic and Social Dimensions in the United Arab Emirates 2009. National Bureau of Statistics. P15.
  • United Arab Emirates. (2010). National Human Resources Development and Employment Authority (TANMIA). UAE Population to Rise to 7.5 Million This Year.
  • United Arab Emirates. 2009. Ministry of State for Federal National Council. "Women in the United Arab Emirates: A Portrait of Progress". 14pp
  • United Arab Emirates Ministry of Health. (2010) "Ministry of Health Announces First Nutrition Strategy in the UAE”.
  • United Nations. Economic and Social Commission for Western Asia. General Information UAE.
  • United Nations. Economic and Social Commission for Western Asia. (November 2009). The Demographic Profile of the Arab Countries, Technical Paper 9.
  • United Arab Emirates. (2010). Analytical Report on Economic and Social Dimensions in the United Arab Emirates 2009. National Bureau of Statistics. P15.

The Government of Canada has prepared this report based on primary and secondary sources of information. Although every effort has been made to ensure that the information is accurate, Agriculture and Agri-Food Canada assumes no liability for any actions taken based on the information contained herein.

The United Arab Emirates Consumer: Behaviour, Attitudes and Perceptions Toward Food Products
© Her Majesty the Queen in Right of Canada, 2010
ISSN 1920-6593 Market Analysis Report
AAFC No. 11373E

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