Report Overview

Increasing disposable income, urbanization, growing young population, rising customized chocolate assortments and personalized packaging, and sustainable practices are expected to drive the UAE Chocolate Market during the forecast period between 2024 and 2030.

UAE Chocolate Market – Industry Trends & Forecast Report, 2030

The UAE Chocolate Market size was estimated at USD 421.32 million in 2023. During the forecast period between 2024 and 2030, the UAE Chocolate Market size is projected to grow at a CAGR of 7.29% reaching a value of USD 689.68 million by 2030. A prominent driver of the market is the rising popularity of confectionery snack types, leading to an increased demand for chocolates among consumers. Premium brands, benefiting from an affluent consumer base, are strategically positioned to either sustain or augment their retail value shares, thereby supporting overall market growth. Another driving force is the consumer preferences in the United Arab Emirates lean toward gifting premium boxed chocolates, characterized by diverse shapes, sizes, and attractive packaging, over traditional sweets. The trend has paved the way for the entry and flourishing presence of global premium chocolate brands, such as Godiva, within the country. Also, the tourism industry in Dubai, Abu Dhabi, and other Tier-1 cities in the United Arab Emirates has experienced substantial expansion, solidifying their positions as sought-after luxury tourism destinations. This surge in tourism has resulted in an increased consumption of regional confectionery, particularly chocolates, with tourists frequently choosing these items as gifts for their friends and family. In response to the growing demand, chocolate manufacturers are strategically introducing single-origin and premium chocolate line-ups. These innovative strategies not only contribute to higher profit margins but also foster a more positive brand image. Consequently, these initiatives act as significant drivers for market growth in the region, reflecting the dynamic interplay between consumer preferences, tourism trends, and industry innovations.

Chocolate – Overview

Chocolate, a cornerstone of the global confectionery industry, enjoys widespread consumption and popularity globally. Beyond being a favored food item, chocolate also boasts stress-relieving qualities, suppressing cortisol, the stress hormone. Consumers increasingly opt for dietary solutions to health concerns, making chocolate, with its mood-enhancing effects, a likely candidate for sustained sales growth in the coming years. Often exchanged as gifts during festive occasions, chocolate carries symbolic significance, representing appreciation, love, and joy. Dark chocolate, recognized for its health benefits, is associated with a reduced risk of cardiovascular diseases due to its good fats and flavonoids. The diverse varieties of chocolates produced worldwide, influenced by cocoa content, underscore the need for companies to focus on product development and strategic marketing to cater to varied consumer tastes and capture emerging markets in the highly taste-driven UAE Chocolate Market.

UAE Chocolate Market

Growth Drivers

Sustainable Practices

The UAE chocolate market is on a growth trajectory, driven by escalating retail confectionery sales and the introduction of 199 hotel projects, generating heightened demand from international visitors. Concurrently, ongoing developments in malls and hypermarkets are expanding the sales network, providing added impetus to chocolate sales in the UAE. Notably, the 2023 developments underscore a substantial focus on sustainability. Local chocolate production is expanding to meet the demand for high-quality and eco-conscious products. Emerging brands are introducing innovative offerings, and the surging popularity of organic and artisanal chocolates is fostering the establishment of specialty shops and cafes. Modern retail networks, particularly supermarkets and hypermarkets, are enhancing consumer access to premium chocolates. The trend of gifting premium chocolates during holidays is contributing to market growth, with some brands actively prioritizing sustainability and fair-trade practices, incorporating ethically sourced ingredients. The exponential growth of online sales channels in the UAE provides consumers convenient access to quality chocolate products, highlighting the growing demand for innovative, high-quality, and sustainable options in the country.

Challenges

Fluctuating Raw Material Prices

Unstable cocoa prices pose a significant challenge to the UAE Chocolate Market, hindering its growth. The primary ingredient, cocoa, has experienced fluctuating prices over the past decade, contributing to volatile production costs. This unpredictability prevents marketers from accurately estimating their annual production expenses. The regional confectionery market faces the impact of cocoa price volatility, which depends on growing conditions, disease, aging crops, and political instability. These fluctuations in raw material prices restrain the chocolate market in the UAE, posing obstacles to sustainable growth and market predictability.

Impact of Geopolitical Tensions on UAE Chocolate Market

The UAE Chocolate Market is impacted by geopolitical tensions in several ways. The conflict between Israel and Hamas has triggered Houthi attacks in the Red Sea, disrupting shipping lines and causing delays and increased costs for maritime cargo transportation. This ripple effect extends to commodities like edible oils, African coffee beans, and Russian wheat exports, potentially affecting the overall supply chain. Simultaneously, the ongoing war in Ukraine raises concerns about the safety of vessels and its impact on the transportation of goods from Black Sea ports, including critical Ukrainian grain exports. Geopolitical uncertainties also cast a shadow over the cocoa market, with adverse weather conditions in West Africa leading to increased prices for chocolate makers and potential cost escalations for consumers. These challenges contribute to a complex and uncertain landscape for the UAE Chocolate Market.

UAE Chocolate Market

Segmental Coverage

UAE Chocolate Market – By Product Type

By product type, the UAE Chocolate Market is divided into Softlines/Selflines, Boxed Assortments, Countlines, and Molded Chocolates segments. The boxed assortment segment is expected to witness the fastest growth rate by product type during the forecast period. The accelerated growth can be attributed to the cultural significance of gift-giving in the United Arab Emirates. Boxed assortments, often associated with celebrations, weddings, and social gatherings, align with the country's tradition of presenting chocolate gifts during various occasions, such as the Holy month of Ramadan, Eid, weddings, and birthday celebrations. The cultural inclination towards gifting, coupled with consumers' preferences for diverse chocolate assortments, makes the boxed assortment segment a key driver of the UAE Chocolate Market.

UAE Chocolate Market – By Distribution Channel

Based on distribution channel, the UAE Chocolate Market is divided into Supermarkets/Hypermarkets, Convenience/Grocery Stores, Specialty Stores, and Online Retail Stores segments. The online retail stores segment holds the highest share in the UAE Chocolate Market by distribution channel. The UAE chocolate market has witnessed a significant evolution, notably marked by the dominance of online sales channels. This digital transformation has revolutionized how consumers acquire their favorite chocolate products, now constituting a substantial share in the UAE market. A key driver behind the surge of online sales in the UAE chocolate market is the rapid digitalization of the region. Positioned at the forefront of technological advancements, the UAE boasts a deeper internet penetration rate and an increasingly tech-savvy population, providing a conducive environment for the flourishing of online shopping platforms. Chocolate manufacturers and retailers have adeptly capitalized on this trend. Online shopping offers consumers the convenience of exploring diverse chocolate brands and products from anywhere, with just a few clicks enabling them to compare prices, read reviews, and make informed decisions. This accessibility and convenience make online sales channels an appealing option for a wide range of consumers, from busy professionals to families and individuals.

Competitive Landscape

Major players operating in UAE Chocolate Market include Nestlé, Mondelēz International, Ferrero, Notions Group, Al Nassma, IFFCO, Barry Callebaut, Kakaw Manufacturing, Al Sham Chocolate Manufacturing, Le Chocolat LLC, Zokolat, and Chocolatier. To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.

Recent Developments

• In December 2023 - Haldiram's Nagpur introduced 'Cocobay,' a premium chocolate brand, to the UAE Chocolate Market. Cocobay is available at Haldiram's premium stores across key cities in the UAE.

Scope of the Report

By Product Type

• Softlines/Selflines

• Boxed Assortments

• Countlines

• Molded Chocolates

By Distribution Channel

• Supermarkets/Hypermarkets

• Convenience/Grocery Stores

• Specialty Stores

• Online Retail Stores