Savoury Snacks in the United Arab Emirates

PROSPECTS

Pressure on prices continues after the imposition of VAT

Price promotions remained prominent in savoury snacks in 2019, as the category continued to feel the effect of the imposition of 5% VAT across packaged food in the previous year. The introduction of VAT encouraged consumers to pay significantly more attention to price in purchasing decisions, and placed pressure on manufacturers to lower prices.

Health a key driver in most dynamic categories

Vegetable, pulse and bread chips remained the most dynamic category in savoury snacks in 2019. The rise in consumer health-consciousness is exerting a growing influence across packaged food in the United Arab Emirates, and, within savoury snacks, is driving the expansion of categories with a health-orientated positioning, including nuts, seeds and trail mixes, as well as vegetable, pulse and bread chips.

Largest category facing significant challenges

Potato chips remained the largest category within savoury snacks at the end of the review period. However, it faces significant challenges from increased consumer sensitivity to prices and rising health-consciousness.

COMPETITIVE LANDSCAPE

Leader facing increasingly intense competition

Pepsi Cola International retained the top spot in savoury snacks in 2019, as the company continued to benefit from a long-standing presence in the market, extensive distribution involving strong relationships with retailers, and a portfolio of widely recognised and trusted brands, such as Lay’s and Doritos. However, Pepsi Cola International experienced an ongoing trend of year-on-year share erosion throughout the review period, as rivals such as Kellogg Middle East, expanded strongly in the market.

Local companies benefiting from demand for nuts, seeds and trail mixes

The local companies, Bestfood Co and Gyma Food Industries, led the dynamic nuts, seeds and trail mixes in 2019. Both companies benefited from their knowledge of local conditions and the operation of their own local production facilities, which enabled them to tailor their offers to the particularities of evolving demand in the market.

Pepsi Cola International maintains lead in fast-growing category

While Pepsi Cola International has suffered from the move away from its core brands to products with a more health-orientated positioning, it has, nonetheless, maintained the lead in the most dynamic category, vegetable, pulse and bread chips, which saw growth driven by the health and wellness trend. Indeed, Pepsi Cola International’s category-leading brand, Sunbites, reasserted itself in the final two years of the review period.

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