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Mon 1 Jan 2007 12:02 PM

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Revitalised brands are the cream of the crop

Gulf & Safa Dairies Dubai has emerged stronger after a fire destroyed its main plant in 2006

Gulf & Safa Dubai is one of the UAE's longest established dairies, dating back to the mid-1960s. The company, which markets its brands in the Dubai and the Northern Emirates has recently taken a second look at its brands, and is now revitalising them with updated packaging designs and new products. The company is also making increasing gains in export markets including the wider Middle East, India and also Europe.

While a fire, which swept through the company's main plant a few months ago, could have put many companies out of business, Gulf & Safa Dubai actually drew strength from the experience, re-appraising its brands and the way the different departments of the company work together as a result.

Mark Tully, general manager, Gulf & Safa Dubai, tells
Retail News Middle East

about the company's ambitious plans, and how it managed to emerge stronger from a fire that could have threatened its existence.

RNME: How are you finding the dairy sector at the moment? Is it performing well?

Mark Tully

: We are experiencing double-digit growth and we’ve been growing pretty much in line with the dairy category which I think is testament to the strength of the brands and it is partly because of this strength of distribution. We have our own distribution and have full coverage of outlets in our markets.

The history of the company has really been one of consistent growth over the past 40 years. We have experienced a further level of growth in the past few years which has been consistent and in line with the overall growth of the market here in Dubai and the northern Emirates. What’s encouraging for this organisation is that we have well-established brands.

RNME: Many of the brands have had the same labels and packaging designs for a number of years. Is this something that you are looking to change?

MT

: All the indicators are that this market is going to be growing significantly over the next few years. There is a need to capture as much of that growth as possible and to do that you need to be close to your consumer, close to your retail customer and to make sure that you are providing relevant propositions and communicating them in the right way. The company recognises this and that is where that change in direction has really come from.

In all honesty, if you look at our brands on the shelf, our packaging on many of our products is somewhat outdated, and that’s something that we are working on at the moment. Despite this, even in a market that is seeing a lot of growth, a lot of new entrants and a lot of new competitors and new brands, our brands have actually stood the test of time. Our market shares have remained very stable over the last few years.

RNME: Is the company going to be re-branding some of is products soon?

MT

: We have already started work on that in the last few months. The range of Safa long life UHT juices and UHT milk was the first project we undertook just a few months ago, when we re-launched under a new packaging design and with a new positioning platform which followed a round of research and development that we did with the consumer.

We’re encouraged with the results so far, one example being our distribution in the market. Retail distribution has grown from under 20% to over 50% in a couple of months. The indication from the volumes we’re generating at the moment is that we’re growing faster than the market in that category so we’re very encouraged and we’ve got a strategy for that brand for next year that will be consistent with the execution with above the line and below the- line activities. We are soon to re-launch the Sterilac yoghurt brand with a new package design that follows some extensive research and development. It’s a unique pack design for the yoghurt category in our market and the Sterilac brand is a product formulation that is unique in the category. It is additive free so we are now identifying and working on a positioning statement, which we will use to execute strategies through 2007. We are re-invigorating each of the key brands in the portfolio so there will be more work that we’re doing on various other brands through the first few months of 2007.

We’ve also learnt that the brands are robust, strong, and if we add that component of a marketing focus and a consumer focus, we really believe we can take the company into a new stage in its development.

RNME: How else do you hope to increase share?

MT

: We’re working on a number of strategies where we’re investigating what our brands mean to our consumers, and how they perceive the brands so that we can come up with positioning strategies to advertise and market them. Packaging obviously is a key component of that as well to make our brand more attractive and more relevant to the consumer. The traditional FMCG battleground of the fight for shelf space, making the brand visible, making it available to the consumer is a key component of what we are trying to do to grow our market share.

We also have a significant export business. On the Safa long life range of juices and milks we have international export. We have export across the GCC and we have international export as well in our short life dairy products we have export within the GCC market.

RNME: Is most of the competition from local companies or imports?

MT

: By and large, it’s local companies. There are several different competitors in the dairy category. Gulf & Safa Dubai’s outlook is that there are different competitors in different categories, so we don’t see one or two specific companies as competitors. We look at it more on a category-by-category basis, based on our own relevant strengths and weaknesses.

RNME: The UAE has a diverse population. Who are your main customers?

MT: We know from the research we have done that we have a significant franchise with consumers and a multitude of different consumer types in our market: local Arabs, expatriate Arabs and Asians, who form the majority of the population. A key strength of our organisation is that we a have a significant proportion of consumers in this region who are consuming Gulf & Safa products every single day so there is trust in the brands and their quality with the consumers.

RNME: The fire in August pretty much destroyed the main Dubai plant. How did the company manage to cope with the ordeal?

MT

: If I consider the recent history of the company with the fire, we’ve had a period of time where some of our brands and packages have been out of the market, but as we’ve returned those brands to the market we’ve regained the levels of distribution that we had previously, we’ve re-gained the market shares we had before and have done so in a very short period of time.

There is no doubt that the fire was a set back for the company. Our priority immediately after the incident was to maintain availability and presence of our brands in the market. That is something we worked really hard at and we believe we’ve been very successful at maintaining a presence. Within 36 hours after the fire, we were back in the market with our key brands and pretty much in full distribution. And from that point we have been working at building up production capacity again to the point that we are back at full strength for most of our key brands and key packs. It took around eight weeks to get back to full capacity.

RNME: How did you manage to achieve this so quickly, given that the main production facility was destroyed?

MT

: We reacted very quickly and brought new machinery in to undamaged parts of the factory. We were able to source machinery and literally fly new machinery in and get back into production. We also used alternate production sites within the UAE where our own people staffed production facilities using our own materials, maintaining our own formulas.

RNME: Did anything beneficial emerge from the incident?

MT

: When you go through something like this, you have to look at the positives. One is that people from different parts of the organisation were literally thrown together to work through and resolve the issues. It’s actually created a tremendous amount of teamwork and energy in the business. Some people who have been in the organisation for many years in a certain role have been transformed by being exposed to different parts of the business and we’re looking to harness that and make it a part of our competitive advantage.

It was also a chance to learn about the brands and about the company. Our thanks goes to our customer base of retailers and institutional customers who have been extremely supportive, cooperative and encouraging to us.

Gulf & Safa in profile

Gulf & Safa Dubai was established in 1964 and was the first dairy company to be established in the UAE. There are actually two Gulf & Safa Dairies in the UAE. Gulf & Safa Dairies Dubai operates in the territory of Dubai and the Northern Emirates. There is also Gulf & Safa Abu Dhabi, which operates in Abu Dhabi and Al Ain. They are two separate legal entities, they market the same brand sets but are essentially different companies.

Gulf & Safa Dubai operates in Fujairah and Ras Al Khaimah. The company operates from a production facility in Rashidya, close to the airport, which acts as its headquarters and main distribution hub for the Dubai market. The company also has distribution centres and operations based in Ras al Khaimah and Fujairah. We employ over 500 people and many of our core brands have been established in the market from the time the company was formed.

The company’s key brand is Laban Up, which is leader in the laban category. It is also number-one in the yoghurt category with Sterilac. Gulf & Safa Dubai has a number of juice and dairy products that it markets under the Safa brand.

As a dairy business, the company’s main focus is the laban, yoghurt and short life milk shakes. It also produces cheese, sour cream, labenah, long life juice and long life milk.

“We’re working on a number of strategies when we’re investigating what out brands mean to our customers, and how they perceive the brands so that we can come up with positioning strategies to advertise and market them.”

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