Dubai: Organic speciality stores are growing in the UAE as consumers place more value on healthy products, according to industry experts.
“We see speciality organic stores popping up in the UAE. We now have a broader availability,” said Natalia Gorzawski, research analyst at Euromonitor International.
In general, to be labelled as organic, food must be produced without the use of pesticides, antibiotics and genetically altered organisms.
Sales growth of organic food has picked up since the 2008 economic downturn. The upswing is likely to continue due to the growth in the economy, higher income levels and an influx of expatriates that are more aware of organic food, Gorzawski said.
Speciality stores are located in areas “where there are western expatriates that have a higher income,” she said.
Organic Foods and Café is planning to open two stores in Kuwait next year, and looks to expand to Saudi Arabia, Qatar, Oman, and Ras Al Khaimah and Al Ain in the UAE. It currently has five stores in the UAE and one in Bahrain. It opened a new store in Abu Dhabi (Nation Towers Galleria) on Wednesday.
Nils El Accad, founder of Organic Foods and Café, expects the company’s revenue to grow by 10 per cent over the next year.
Becky Balderstone, founder of organic food supplier Ripe, said she has seen an increase in organic café projects over the last year.
“Since Ripe launched, we have witnessed a steady increase in demand for organic produce in the UAE, particularly, local organic produce. People in the UAE are becoming more aware of the benefits of eating organic and as such the market is developing continually,” she said.
The size of the UAE organic packaged food market is expected to reach $18 million in 2014, according to data by research firm Euromonitor International. By next year, that is expected to grow to $19 million and to $23 million in 2019.
“Organic prepared baby food is the strongest category within organic packaged food, and 40 per cent of prepared baby food is organic,” Gorzawski said.
Organic food costs more than regular alternatives. For instance, the average price of prepared organic baby food is Dh64 per kilogram compared to Dh42 for a regular one, according to Gorzawski.
Speciality stores are typically in areas “where there are western expatriates that have a higher income,” she said.
Even with the expansion of speciality stores, supermarkets are currently leading sales of organic food in the UAE, since they have larger volumes of prepared organic baby food [the strongest organic packaged food category] than speciality stores, according to Gorzawski.
“Even though supermarkets and hypermarkets are increasing their organic product-portfolios, you will not find a broad selection there. So [speciality organic food stores] really answer the increasing demand for such products,” she said.
Similarly, El Accad said that there are few stores in the Gulf that sell a wide range of organic food products.
“Demand is there but it’s not being fully fulfilled,” he said.