UAE premium chocolate business resists recessionary dynamics

And while premium chocolate retail business in the UAE has been booming in the last three years the current economic downturn has slowed growth according to a Dubai-based chocolatier.

Barsha-based ChoCo'a, has seen a three-fold increase in retail sales for chocolates and arrangements between 2006 and 2008, from 3,800 kgs to 12,000 kgs respectively. In the same period, the boutique's birthday and wedding cakes offering doubled to 35,000 pieces with its cakes and pastries recording even stronger growth from 12,000 in 2006 up to 48,000 pieces in 2008.

And while ChoCo'a saw an overall year on year sales increase of 123% across its three retail product segments at the end of 2008, growth seems to have slowed slightly as the global financial slowdown continues to bite.

"Premium chocolate sales are highly dependant on consumer mood rather than on consumer pockets," said Assem Hamzeh, Managing Director, ChoCo'a LLC. "It's all about confidence, a key human characteristic that dictates happiness levels and the propensity of humans to celebrate a special occasion or simply allow a personal indulgence.

"Our March retail sales grew by 67% year on year while our April figures were also increased by 23%. We remain optimistic about the outlook for the rest of 2009, especially with the UAE wedding season and the Holy Month of Ramadan still ahead of us."

ChoCo'a's chocolate and arrangements product range contributes 48% of the company's total sales, followed by its birthday and wedding cake offering which accounts for 33% of its total business, with cakes and pastries making up for the remaining 19% of sales.

"We also have a strong footing in the wholesale hospitality industry where we are retained by some of the UAE's and Oman's most prestigious five star hotels. Our monthly orders for this segment per client can be as high as 200 kgs of chocolate, however lower occupancy rates in recent months means that this part of our business has seen a considerable slowdown," said Hamzeh.

ChoCo'a is still pressing ahead with its expansion plans in the region and is currently exploring the opening of another retail boutique in Abu Dhabi and the launch of a new, state-of-the-art chocolate factory slated to begin operations next year.

ChoCo'a currently maintains retail operations in the UAE, Germany and Azerbaijan with its hospitality business spread across the key regional markets of Dubai, Abu Dhabi, Saudi Arabia and Oman.