Dubai: For the owner of the world’s biggest Nike franchise, expanding in the food business isn’t a distraction.
It’s about what’s needed and making it work, according to Mohammad A. Baker, Deputy Chairman and CEO of Gulf Marketing Group, which operates the Sun & Sand Sports store network… and also owns the ‘Farm Fresh’ processed foods brand.
“Even with everything that’s been happening, I believe we still don’t have that many homegrown food brands,” said Baker. “We have been doing our part in the food business over the last 14 years, but in bits and pieces. And now, COVID-19’s forced businesses to rethink on a lot of things.
“All those industries not going through a major transformation are going to do so now – food will be next. Everyone is talking about food security – the UAE now has a food security ministry. That would have been unthinkable 10 years ago.
“We are building the right capacities in our food division – our aim is to help the country move away from importing nearly all of its food needs.”
Got the plans… and plants
The Group, which was set up in 1978, is certainly building those capacities… significant ones at that for processed meals. There will be “pre-prepared” home-cooked meals launched under the ‘Farm Fresh’ label and supported by a plant at Dubai Investments Park. Another unit is being built – also at DIP – for frozen seafood. It doesn’t end there…
Baker will also be investing in a spices processing plant in Jebel Ali. But can’t spices be shipped in from the Subcontinent and get sold locally at a steep discount to anything that GMG can come up with?
“Sure, spices from the Subcontinent can be got at a quarter,” the CEO said. “But the problem is you have lost 80 per cent of the flavouring and put in triple the amount into the dishes. That’s when it goes from healthy to unhealthy.
“The way we see it, there is demand for organic spices and we can feed into that.”
Food secures future
Baker agrees that building such a heavy exposure in the relatively low margin food business comes with high risks. “But we have done our homework - we are building these capacities that will help with the UAE’s food security.
“The goalpost for us is to transform from being a food importer into an exporter…”
Dive into the past
GMG’s got a past when it comes to food. Before it launched as a sports goods focussed business, the Group’s founder, Abdul Aziz Hassan Baker, was working at National Bank of Dubai and also owned a small butchery.
“Nit, it wasn’t a boutique or anything similar – Dubai wasn’t a high-end city in the early 70’s,” said Baker, who got into the business just over 10 years ago after graduating from Boston Uni.
“Father found an opportunity to serve expats coming in to be part of the oil industry and who were starting to make their homes in Jumeirah,” Baker said. “That’s when he launched the neighbourhood butchery and fly in meat from all over the world and sell as refined cuts. He did have a strong customer base.
“Then he used to trade in food commodities - meat, poultry, vegetables. After that the business evolved again and we got into branded food with Farm Fresh. Now, our business is shifting from representing to full-scale manufacturing.”
The passion for food manufacturing does not mean taking the eyes of the ball in the core business – that of sports brand retail.
Baker has heard out his fair share of sceptics who insist that all of brick-and-mortar retailing is about to die and everything will be accessed and bought online. Does he take any of these views to heart?
“Not even a quarter per cent,” said Baker. “Yes, nothing should – or will – stay the same. Retailers who have failed had not gone through the process of understanding consumer needs of today and failed to catch up.
“Customers are not looking for products when they come to a store -they are looking for an experience, To give that feeing, as a retailer you are providing that.”
But can those “experiences” be created even when it comes to selling a sneaker? Even if it’s a Nike-branded one?
“Of course, the Nike motto is anyone who has a body is an athlete,” Baker states in a matter-of-fact tone. “When we launched in the late 70’s, running to be healthy was unheard of in the Arab countries. The only sport that was getting attention was football.
“If anyone was running on the street, the impression was that something is wrong with the person.
“And now, you have a situation with the pandemic where everyone wants to get healthy. Even those who didn’t want to start working out, to sweat it out.”
Widening the net
In December, GMG acquired Singapore based sports equipment retailer Royal Sporting House (RSH) in a deal that will see GMG get a footprint in Southeast Asia. RSH operates more than 200 outlets in Singapore, Malaysia and Indonesia.
“From serving a consumer base of 60 million in the Gulf, we now get to target more than 900 million,” said Baker. “We will play our part… to make them healthier.
“I am proud of what Sun & Sand Sports has been able to achieve – we are a UAE brand. You head over to The Dubai Mall and see the thousands of stores. But how many are locally grown brands?
“Our name itself comes from this country – there’s the sun and the sand. We have proved ourselves despite coming from a then small city. Now, we exported our model to multiple countries.”
Bit of a headache
Even with sports and food as its core, there is a third element to the GMG portfolio – pharmacies under the ‘SuperCare’ brand. But this is where Al Baker wants to change things around… and quite a bit at that.
“With pharmacies, there is a huge oversupply in the UAE market,” the CEO said. “On Sheikh Zayed Road alone, it would seem there are more pharmacies than in a small city somewhere in Europe. It’s extremely unfortunate.
“There are lots of complexities involved and which we are trying to get a grip on. There will be changes in our pharmacy business model – we want to create a more omni-channel experience and focus on nutrition.”
Will it mean closing any of the 44 outlets of SuperCare? “That’s not the plan – no,” Baker added. “We will relook at the entire journey the customer in the UAE has with pharmacies. And we will change accordingly.
“People are not always going to go online to shop. They might not buy at the store, but they will want to get inspired by what’s there. It’s the same with all retail, whether it’s selling a brand of sneakers or a nutrition product.
“If a retailer can create that experience - whether at store, online or on a mobile phone at the consumer’s convenience - it’s still retailing. The future of retail is omni-channel.”