Food consumed in the UAE and the GCC is safe from coronavirus as local companies source their products mainly from Europe, the USA, Brazil, and the Subcontinent rather than China, say industry executives.
Speaking on the first-day of the Gulfood 2020, they assured that despite the fact that this region relies on foreign food, local and regional companies source products from reliable and internationally-renowned companies.
"I don't think there is any impact of coronavirus on the local food market. We are not importing anything from China. All of our imports are from the well-known companies across Europe and the USA. In fact, most of local F&B companies are importing from Italy, France, Germany, Denmark, and Sweden because UAE residents have good purchasing power, therefore, they always look for high quality products. All companies in the FMCG sector here are sourcing good products from reliable companies," said Dr. Ahmed Eltigani, CEO of Al Rawabi Dairy Co.
Rishi Srivastava, group marketing manager at Sahar Enterprises, which is a subsidiary of Al Kabeer group, said their company's raw material comes from Brazil and most of the manufacturing is done locally, hence, ruling out any impact of the coronavirus on the local or regional food.
"Raw materials for all the frozen products such as chicken and meat of regional companies come from Brazil. Therefore, it is quite safe to eat food. It is all halal food under strict watch of local municipalities. So, it is absolutely safe," Srivastava told Khaleej Times on the sidelines of the Gulfood 2020 exhibition, which is currently underway at the World Trade Centre.
Sourcing products, especially consumables, from China has become a big hassle and challenging for foreign companies due to the coronavirus outbreak. There were 2,009 new cases in mainland China on Saturday, bringing its total to 68,500. The number of the dead in mainland China from the virus stood at 1,665 on Sunday evening, according to the country's National Health Commission.
Kamal Vachani, group director of Al Maya Group, also ruled out any impact of coronavirus on the local food industry.
"The UAE food industry is not dependent on China. We mainly source foods from India. Garlic and ginger were being sourced from China but we are now shifting to India. Other items such as corn flakes are coming from the UK and Europe. Some vegetables are coming from Jordan. Most of the can foods are also manufactured locally here in Sharjah. To my best of knowledge, food consumed here is safe as it is not imported from China," he added.
Vachani revealed that there are some sauces are sourced from China but they can be purchased from other countries such as South Korea.
Krishna Dhanak, executive director, Alpen Capital, said the impact of coronavirus will be seen across industries and geographies given the wide supply-chain network from China to the rest of the world. "Accordingly, the impact on the trade between the UAE-GCC and China will be similar to the impact on the global supply-chain from China," he said.
The GCC countries are largely vulnerable to food price fluctuations, as they are highly dependent on food imports. Food prices have rebounded after falling sharply between 2016 and 2017. Alpen Capital estimated that food demand will grow to 60.7 million tonnes in GCC by 2023, growing at 3.3 per cent CAGR. Around 85 per cent of GCC food is imported due to limited arable land, lack of fresh water and arid climate conditions.
Earlier on Sunday, Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and UAE Minister of Finance, opened the 25th edition of the expo. More than 5,000 companies are taking part in the five-day exhibition, bringing F&B players across the globe to Dubai.
Focus more on healthy food
Al Rawabi CEO Dr. Ahmed pointed out that there is a big shift in consumer behaviour. "Earlier, consumers used to look at production and expiry dates only. But now they have become educated and buy a product after checking the ingredients only. So Al Rawabi is focusing on functional health products," he said.
Priyanka Mittal, direct for KRBL Limited, the distributor of India Gate basmati rice, said the focusing is to add more healthy products to its portfolio. She noted that more companies are focusing on producing healthy products due to growing demand and growing trend among companies to focus on this segment.
"I think it is a combination of push and pull - whereby demand from consumers are growing while companies are also introducing new healthy products as well to woo consumers. Companies like us want to offer better value and products to the market. So, there is demand creation that brands do. Once you put the product on the shelf, there is obviously offtake. There is a consumption that gets created," she said on the sidelines of Gulfood.
Commenting on why the healthy and organic products are costlier, she said the retail cost of listing these products is very high. "The retail margins are very high and offtake is very low. So retailer wants more money. It is not brand owners that are capturing bulk of the value. Retailers will have to bring down the margins not only for basmati rice but also for all products for this category because right now consumers are seeking value," she said.
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