Sector Trend Analysis – Bakery products in the United Arab Emirates

Retail environment and trends

Baked goods retail sales in the UAE increased at a CAGR of 3.1% from 2018 to 2022, reaching US$671.7 million. It is expected to grow at a CAGR of 7.5% from 2023 to 2027, reaching US$966.7 million in 2027. Frozen baked goods was the best performing category over 2018 to 2022, with retail value sales increasing by CAGR of 7.5%. reaching US$51.8 million.

Since the pandemic, UAE consumers have increasingly adopted health and wellness lifestyles. Baked goods with reduced sugar content or alternative sweetening ingredients as well as functional bread and cakes enriched with protein, fibre, fruits, and plant based ingredients are becoming more popular in UAE.

Bakeries and small scale baked good companies make up over half the market for baked goods in the UAE, ffollowed by private labels. Top three baked goods companies were Almarai Co Ltd. (US$26.0 million in 2022), followed by Modern Bakery LLC (US$24.9 million) and IFFCO Group (US$16.2 million). Over 2018 to 2022, Almarai sales grew the fastest by a CAGR of 17.9%, followed by Mondelez International (15.0%) and Sunbulah Group (8.0%).

Top four brands in the UAE make up over half the industry with Modern Bakery and Almarai dominating. Almarai and IFFCO have the most brands in the top 14.

Retail subsector analysis

Bread

All bread categories have shown post pandemic growth. Leavened bread saw the most growth with packaged bread growing the fastest, at a CAGR of 4.8% from 2018 to 2022, reaching US$85.1 million. Sales of packaged and unpackaged flat bread increased by a CAGR of 3.8%. Bread is expected to continue growing over 2022-27, with growth rates set to accelerate in all categories.

Packaged bread producers are likely to integrate an increasing number of nutritious elements into their offers. Grain, nut, and seed combinations in packaged baked goods appeal to consumers concerned with the protein, mineral, vitamin, and fibre levels of their diets.

Modern Bakery and L'Usine were the largest bread companies in the UAE with sales growing by CAGR's of 4.9% and 11.1% from 2018 to 2022 respectively, with sales increasing to US$14.8 million and US$11.3 million respectively in 2022.

Cakes

Sales growth of both packaged and unpacked cakes was static over 2018 to 2022 but expected to accelerate over 2023 to 2027.

Total cake brand growth was static over 2018 to 2022 at a CAGR of 1.0%. Small scale cake brands followed by Americana are the largest cake brands in the UAE. L'Usine experienced the fastest growth at a CAGR of 3.6% from 2018 to 2022, followed by Modern Bakery (3.5%).

Desert mixes

Sales of dessert mixes were stagnant over 2018 to 2022, at US$23.2 million in 2022 but are expected to accelerate over 2023 to 2027. While the pandemic drove growth in dessert mixes due to increased home activity and home consumption, the popularity of such products is likely to wane once lifestyles and consumption return to outside the home.

Betty Crocker and Al Alali are the largest dessert mix brands in the UAE with retail sales representing almost half total brand sales in 2022.

Frozen baked goods

Sales of frozen baked goods increased over 2018 to 2022 by a CAGR of 7.5%, reaching US$51.8 million in 2022. A growth rate of 10.4% is expected over 2023 to 2027.

Kawan brand is the biggest brand in the UAE. Al Karamah experienced the largest CAGR at 9.1%, reaching US$1.2 million in 2022.

Pastries

Sales of packaged and unpackaged pastries were static over 2018 to 2022 but are expected to increase by a CAGR of 8.8% over 2023 to 2027.

Artisanal brands made up over half the retail sales in the market, increasing by a CAGR of 3.8% over 2017-21. Following artisanal brands, private label brands have the highest retail sales and experienced the largest sales increase at a CAGR of 5.9% from 2017 to 2021.

Distribution channels

The majority of bakery products in the UAE are distributed through hyper and supermarkets. Combined, they represent 80.0% of distribution, followed by small retailers (15.0%) and Ecommerce (5.0%).

As UAE consumers love both shopping centres and the digital world, both channels are expected to coexist to drive growth and recovery from the pandemic, with stores expected to continue being the most important and biggest channel in the UAE. Stores now draw people in with a more sensory experience and accommodate online order fulfilment. For example, in 2021, the UAE saw the arrival of its first AI-powered fully automated store (Carrefour City+) located in Mall of the Emirates, Dubai. Items are added to customers' digital shopping baskets and paid for by smartphone, without interacting with staff or a checkout.

New product launch analysis

According to Mintel's Global New Products Database (GNPD), 263 bakery products were launched in the UAE. from 2018 to 2022. Top sub-categories of new bakery products included sweet biscuits/cookies, baking ingredients and mixes, bread and bread products, and savour biscuits/crackers. Flexible was the most common package type, followed by carton. New product was the largest new launch type, followed by new variety/Range extender, and new packaging.

Examples of new product launches

Golden Baked Cocktail Biscuits with Leek and Caerphilly Cheese Zoom

Source: Mintel GNPD, 2023

Company	Cradoc's
Brand	The Culinary Alchemy of Cradoc's
Category	Bakery
Sub-category	Savoury biscuits / crackers
Market	United Arab Emirates
Location of manufacture	United Kingdom
Import status	Imported product
Store name	Spinneys
Store type	Supermarket
Price in US dollars	5.38

 

The Culinary Alchemy of Cradoc's Golden Baked Cocktail Biscuits with Leek and Caerphilly Cheese are crunchy and baked to a crisp with mature caerphilly and cheddar cheeses- Irresistibly tasty and light wafer with shards of lush green leek - The manufacturer chooses not to use additives, chemicals, E-numbers, preservatives, trans fats, palm oil, inhibitors or industrial stuff.

Rosemary Oat Crackers

Source: Mintel GNPD, 2023

Company	Bob's Red Mill Natural Foods
Distributor	Bob's Red Mill Natural Foods
Brand	Bob's Red Mill
Category	Bakery
Sub-category	Savoury biscuits / crackers
Market	United Arab Emirates
Store name	Spinneys
Store type	Supermarket
Price in US dollars	7.08

 

Bob's Red Mill Rosemary Oat Crackers are made with a handful of simple ingredients like oats, almonds, quinoa and flaxseeds. This plant based, gluten free and kosher certified product is said to be thin, crisp and satisfying with an irresistible flavour, can be enjoyed with a variety of toppings or on its own by the handful. It retails in a 120 gram pack bearing Non-GMO Project Verified and an Employee Owned Company logos.

Maple Pecan Organic Cookies

Source: Mintel GNPD, 2023

Company	Farm Brothers
Brand	Farm Brothers
Category	Bakery
Sub-category	Sweet biscuits / cookies
Market	United Arab Emirates
Location of manufacture	Belgium
Import status	Imported product
Store name	Carrefour
Store type	Mass merchandise / hypermarket
Price in US dollars	6.45

 

Farm Brothers Maple Pecan Organic Cookies are slow-baked crunchy and vegan cookies made with oats, spelt and rye, and are a source of fibre. The product retails in a 150 gram pack featuring the Vegan Society Approved Vegan Trademark, B Corporation Certified, FSC, EU Organic, Facebook, Twitter, and Instagram logos. For every pack sold, the manufacturer states that they donate 20 square centimetres of land to an organic farmer, contributing to soil health and biodiversity.

Apple and Carrot Cookies

Source: Mintel GNPD, 2023

Company	Sottolestelle
Brand	Sottolestelle Stella
Category	Bakery
Sub-category	Sweet biscuits / cookies
Market	United Arab Emirates
Location of manufacture	Italy
Import status	Imported product
Store name	Carrefour
Store type	Mass merchandise / hypermarket
Price in US dollars	4.77

 

Sottolestelle Stella & Stello Apple and Carrot Cookies comprise ingredients from organic farming. These soft wheat cookies are suitable for both vegetarians and vegans, are free from eggs and milk, and have been made with 100% extra virgin olive oil. This DNV and USDA Organic certified product retails in a 300 gram pack featuring the ISO 9001 and ISO 220005 certifications, JAS ICEA, Love for Earth, and the EU Organic logos.

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Sector Trend Analysis – Bakery products in the United Arab Emirates
Global Analysis Report

Prepared by: Kris Clipsham, Market Analyst

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