Transparency strategy ‘shocked’ Saudi market

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Almarai’s juices clinched the Best Cold Drink and Best Marketing Strategy awards.

Almarai Company credits marketing strategy and best cold drink awards to honesty with trade.

Saudi Arabia's Almarai Company changed the relationship between retailers and strategy in bid to share its juice category management ambitions, according to its senior representatives.

"We operate on the basis on pure transparency, and have shared our vision and improved our level of discussion with key retailers across the GCC. In turn, retailers in Saudi Arabia have witnessed category growth of up to 80%," according to Clayton Lee Buckley, marketing manager - Juices & Beverages, Almarai Company.

Buckley said, however, that execution at traditional outlets such baqalas was more demanding due to the huge number of stores.

The company plans to venture into "more functional platforms to serve more specific needs in this part of the world," he revealed, and he predicted functional juices would emerge as a burgeoning area of growth for the industry.

Most of the key juice players are waking up to the importance of health issues, and fortified products with Omega 3 and Calcium. Price cuts in the juice category have caused many juice players to lose up to half their market shares and hampered industry standards.

"Some companies believe the only way to grow share is to have a cheap product, yet the question to ask is why are the ones that are not discounting growing?" he said.

"This is not a market that is not necessarily price-conscious. Companies which are looking for cheaper sources are bringing the industry down," he commented.

Almarai Company clinched 12 market share points from Tropicana after its single serve launch, and Buckley said the "Arab company" was now giving the world's biggest trademarks a run for their money.

He said increasing numbers of global players are being drawn to the Middle East's retail market, and the company would continue to be sharp as competition "brings out the best in us. For manufacturers, this part of the world, particularly the UAE and Qatar, has become more attractive as we are seeing double-digit GDP growth.

Nishit Mathur, product group manager - juices beverages for Almarai Company said it had striven to be seen by retailers as partners and category champions, rather than suppliers.

Buckley said the focus on transparency had shocked the market, as many retail professionals were not used to the approach, which actually "accelerated category growth.

Hathal Saad Al Utaibi, brand manager - juices and beverages, Almarai Company said the surge in private labels was a challenge, would result in "casualties," but it should seen as a positive move for the industry.

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