“In the last decade, organic farming has received increased attention from consumers and has already become important in both the production and consumption of food products” (Willer, 2009)
The system of farm management and food production which combines good environmental practices is known as Organic manufacture. Ecological production can be defined as organic farming which develops biological cycle in soil and biodiversity, crops and livestock. “Fresh produce” is another term of organic food production. These foods are known as the healthy diet. In one’s diet with organic fruits and vegetables reduces heart disease, chronic disease, cancer etc. The important nutrients like vitamins, dietary fibers, minerals etc are good organic food supplies for a human body. Organic food doesn’t have any artificial food or flavor. Even the animals that are raised from organic dairy products and meat are not injected with hormones or antibiotics. Organic farming also decreases pollution in the environment. (Maffei, D.F,2016
Organic farming should be certificated by various organizations.
1. Guidelines Established by the Food and Agricultural Organization of the United Nation (FAO)
2. The World Health Organization (WHO)
3. The International Federation of Organic Agriculture Movements (IFOAM)
This report will be talking elaborately about topic as such market overview and the suitable marketing strategy to enable a new entity to establish an organic setup dealing with the best quality organic fruits and vegetable in the UAE market
2. 1Market Overview
The growth of global food organic market shows a remarkable double-digit between 2012 and 2016 and it has also forecasted that in the five years the demand will invariably grow further.
Total revenues of $98.5bn in 2016 on behalf of the compound annual growth rate of 10.9% between 2012 and 2016.The power of knowledge in organic food involved in health and environment increases the demand globally. These foods are more expensive, but the statistics show peoples are willing to pay more for the positive impacts.
The forecast performance for the five-year period 2016 – 2021 with an estimated CAGR of 13.8%, which is the predictable market value by the end of 2021 is $187.bn (Organic Food Industry Profile,2017)
In U.A.E the population progress is set to persevere, and the behaviors of consumers are anticipated to change in the country. Moreover, in the world, U.A.E is a high diabetes-prone country. As the government rule and consumer engagement will change the outlays to spend more on healthier and expensive foodstuffs. (United Arab Emirates Food & Drink Report – Q1 20172017)
Source: National Statistics BMI.
2.2 Market Growth
In 2016 the global organic food market value ranges to $98,478.4 million by growth of 11.8% and CAGR is 10.9%, from 2012 – 2016
CAGR 2012 – 2016
Source: Market line (2016) page 8, (Organic Food Industry Profile,2017)
Market Value Forecast
The global organic food market forecast in 2021 shows a value of $187,614.3 million since 2016 there has been an increase of 90.5%. Also, the CAGR projected the market 2016 – 2021 growth of 13.8%
CAGR:2016 – 2021
Source: Market line (2016) page 11, (Organic Food Industry Profile,2017)
United Arab Emirates multiculturalism trend in fresh food
The foreign expatriates of the country’s population are a staggering 80%. In U.A.E, the eating habits and cuisines are diverse.
Many categories in U.A.E, the residents purchase a product considering the country of origin. western expatriates usually prefer vegetables and fruits that are organic, or homegrown. and Arabs prefer fruits and vegetable from various other middle eastern countries like Egypt, Iran, Turkey, Lebanon etc. (Fresh food in the United Arab Emirates,2017)
Fruits and Vegetables
In 2016 the United Arab Emirates increased the share of organic fruits by 18%.
and organic vegetables by 15%. There has been a rapid growth in the organic food sector in the recent years, as consumers are more anxious about the product used for consuming. Many consumers are concerned about the use of pesticides and other chemicals used in vegetables. The volume share is 15% in 2016 which was as low as 8% in 2012.
Source: Euromonitor international from official statistics. (Fruits in the United Arab Emirates, 2017)
Source: Euromonitor international from official statistics. (Vegetables in the United Arab Emirates, 2017)
3.1 SWOT Analysis
· Specific product offering
· Focused growth strategy
· Import of organic fruits & vegetable in high volume.
· Product wastage
· High rentals
· Growing market for organic foods
· Merges and tie up with organic restaurants
· Expansion plans
· Ever growing competition
· Ensure the high hygiene standards at all times.
Specific product offering – Brand dealing exclusively with organic fruits and vegetables which will ensure the quality standards of the operation
Focused growth strategy – As our product portfolio contains only above mention organic sector it is easy to run the business efficiently and measure grow.
Import high volumes of organic fruits and vegetable – Since the organic store needs to keep its inventory on the display always for high volumes of importing the goods are required. This might cause a certain amount of wastage and expensive storage cost.
High rentals – Dubai being one of the fast-growing cities in the world faces high rental and expensive utilizes
Growing market for organic foods – as people are growing towards a healthier lifestyle and are more educated about organic food and benefits. The demand for organic food is ever growing
Merges and tie up with organic restaurants – tie-ups with exclusive organic restaurants for their daily supply of fruits and vegetables
Expansion plans – the brand as the high scope to expand its operations to other emirates and the world
Ever growing competition – there is an existing level of competition in the market which is added further by new entrants
Ensure the high hygiene standards at all times – Since the brand deals with high-quality perishable goods it is very important to uphold high-quality standards throughout.
3.2 Five Force Analysis
The analysis shows organic food market taking players of organic food retailers
Source: Market line (2016) page 12 (Organic Food Industry Profile,2017)
The end consumers of the market are the buyers. The non-organic market price is on a low, so buyers are willing to pay more for organic products. Consumer’s demand increases the buying power, hence, creates an expansion of the future market. The U.A.E government also supports retailers to open new organic markets.
The production process has very strict standards in the organic food production sector. Moreover, the retailers entrust good quality produce from their suppliers. Both suppliers and retailers are bound by mutually beneficial contracts. Most organic retailers also choose to visit the farm they procure from, time and again in order to ensure the quality and production standards.
In U.A.E, it is considered to be easy to penetrate the market with focused, specific and target oriented business model. The Market for organic foods and the prediction of growth is very strong.
Threat of substitutes:
Non-organic foods are cheaper and are the only available alternative for organic foods. As said, organic products benefit the environment and nutrition. The organic outlets are smaller compared to the large supermarkets which also houses, categories of organic and non-organic foods.
This can cause major threats to organizations selling organic foods in large quantities.
Degree of Rivalry:
While the players in the market, ranging from small organic outlets to large chain supermarkets, the revenue of organic foods can be different among other market players. Organic products donate a small percentage of the total revenue. So, this business makes less competition with other retail players and the organic markets.
Current population of U.A.E is 9,430,370
(United Arab Emirates Population. 2017-11-14.)
In the Middle East, U.A.E is one of the most developing countries. Which contributes to a big portion of global health. The main factors that affect health are heat, stress, blood-related marriages, environmental and occupational threats.
The population forecast of 2030 in U.A.E is estimated at 10.5 million. Which is a rise of 21.9% from 2015.Western expatriates in Dubai is more than 100,000 which is quite large. In the U.A.E, foreign immigrants are projected to grow by 20.7% from 2015 – 2030, Between 2015 – 2030 the age groups 20 – 29 and 30 – 39 will grow by 20.5% and 3.5% respectively.
The three most popular cities namely Dubai, Abu Dhabi, and Sharjah. Altogether have a population of over 1 million. In 2015 Dubai was the biggest city with an urban population of 31.3%.
(United Arab Emirates (U.A.E.) IN 2030,2017)
Market segmentation is based on gender, age, income and expenditure, education level, lifestyle, fear, personality.
The population in gender is female more than male, mostly all shopping is done by women in the family
Age groups between 26-38 have the highest immigrant frequency in the country
the age group of 40 – 44 are the most income earners in U.A.E
Older age people have a positive attitude to buy green products
Middle-aged who are willing to spend on the healthy lifestyle.
3.Income and expenditure
There are 5 types of class shown in the country.
A- 0.8million, B 0.7million, C1.4 million, D 2.4million and E 2.4million
(Income and expenditure: the United Arab Emirates, 2017)
Class D is the largest, which remains in U.A.E
Class A and E is the highest expansion from 2011 – 2016
Class E is major in the country.
Women’s and young groups have the highest level of education, both know the value of organic food consumption. The level of education and environment subject make the people aware of organic foodstuff.
The health awareness is gradually changing the nutritional habits and the organic food demand which is supported by the government.
The target audience in the U.A.E is mainly the above-mentioned demographics widely consisting of western expatriates, educated and health conscious people, age 18 to 60 and income group who earn 4million and above since this income group has the highest concentration in the country and section A and C it has the highest growth rate.
The individual lifestyle changes according to cultural and growing environment
Healthy people are conscious about the factor of chemicals and pesticides in food, taste, and food-related diseases.
American, European and British have more or less the same knowledge of health and environmental factor thinking in lifestyle
The target audience is basically people who are willing to change their unhealthy lifestyle and who are willing to adopt and educate themselves about organic food practices. These people are well aware of the health risks and the adulteration practices in the non-organic food sector.
WORLD’S NO1 ORGANICS can be positioned as a very trustworthy brand which aims to educate, and This brand is going to overpower all other retailer dealing with organic fruits and help the people live the healthiest lifestyle they could.
Vegetable, and other groceries in the region.
The category will have no mix of non-organic products in display.
Provision for cold pressed organic juicer which can be used by the customers and a live salad station.
The organic fruits and vegetable is a premium brand. Even though it is going to be sold at a premium price, the brand will have reasonable pricing to make it more accessible to most income groups.
As the saying goes “food is the best medicine”, the brand aims to promote health and wellness by educating the people about the health benefits of adopting an organic lifestyle. The brand will also promote minimalism wherein it strives towards reduce, reuse and recycle.
Unique Selling Points
WORLD’S NO 1 ORGANICS aims at a new green revolution, striving to educate the world and uplift lifestyle using responsible and sustainable business practices.
The brand also will play a major role in organized food production which will reduce wastage and strive towards reducing the environmental footprint.
The niche category in the food industry is organic foods.
Our new brand WORLD’S NO 1 ORGANICS will be WOW in the market.
Elements of Strategic Marketing Plan
To sell the best quality organic fruits and vegetables in U.A.E.
A good people and resource management
Volume selling, door delivery, organic restaurants.
Health conscious people
Organic and non-organic fruits and vegetable retailers
The best quality organic fruits and vegetables
Importing organic products from all countries
Government certification food quality and business practices.
10-12 percent of total investment
Ensure hygienic and attractive display.
Promoting the organic movement with responsible and sustainable business practices.
Ensure staff cleanliness and hygiene fluent in at least 3 different languages, customer friendly and polite.
Expand other organic product lines and market reach.
WORLD NO1 ORAGNIC’S key strategy will be to uplift high-quality standards at all times. The brand also plans to visit the farms perpetually to ensure the quality of the end product and to ensure the best organic practices from the farms.
In order to fascinate the western expatriates and the large audience in U.A.E about THE WORLD’S NO1 ORGANIC. And to increase awareness and publicity for the brand in the country.
The below brand communication strategies will be implemented
Word of mouth
· Customer loyalty programs
· Educational forums during weekends for women.
· Celebrity Endorsement by His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum
· Airlines Inflight magazine is the biggest publicity for new visitor about our organic brand. More focus flights are Emirates Airlines, British Airways and Pegasus Airlines.
· Outdoor ADS – Unipole, Bridge banner, Rooftop, Wall banner and Hording at high traffic saturated locations with approx. 600,000 to 900,000 viewers per day (trinet.ae). such as Sheikh Zayed road al safa near in mardoof building, Dubai police etc
· Ads Newspaper and Magazine
· Exhibition – Participation in the world largest food show “GULFOOD” make the brand image awareness.
· The U.A.E government has launched campaign concluded with The National Program for Government Communication “2021 Healthy Children”. The objective is to fight against child obesity in the country. This campaign is focusing bad eating habit and lifestyle both young and old.
· Association with Dubai Nutrition
· Targeting all hospitals in U.A.E to give knowledge about our brand through Osteopathic physicians and nutritionists.
· Transit medium – Taxi, Public Bus, Dubai Metro & Dubai trams
· kiosks – During the period of Dubai Festival Shopping and summer season more expatriates visit and implementation of kiosks in reputed shopping mall like Mall of Emirates and Dubai Mall to increase awareness about our organic outlets.
· Social media have a dedicated page on portal such as Facebook and Instagram, with daily interesting and educative posts
· Television advertisements
· Radio jingle during peak hours
The direct study and findings in U.A.E suggest, their buying power for organic food is quite positive in the country. Consumers have a growing level of confidence in organic food which ensures the healthy and sustainable environment. The government has stringent safety and strict regulation of organic food, which make consumers trust the product. The important factors like convenience, safety, and price also encourage the customers. Hence this study suggests that an organic market could flourish in the country.