RIYADH, 7 December 2007 — Ice cream manufacturers are hit hard with the arrival of the winter season. According to ice cream retailers in some Gulf countries, sales in winter see a huge seasonal dip which lasts for 2-3 months per year in the Gulf region, though it lasts a little longer in European countries. But the drop in sales varies, ice cream specialists told Arab News, saying some companies use advanced marketing techniques to reduce their losses during the winter months.
According to an industry official, there are 12 major ice cream companies in the Gulf which share the GCC market, the total of which is valued at an estimated SR1.2 billion ($320 million).
Some of the ice cream corporations specialize exclusively in small retail outlet sales, others in the hotel market, with the remainder focus solely on the supermarket industry.
Evidence seems to suggest that ice cream companies which supply hotels see sales drop less radically compared to those which supply supermarkets.
Fredrick Fittousie, manager of Napoli ice cream, which produces 500 tons of ice cream annually to supply five-star hotels and coffee shops in Dubai, told Arab News that “ice cream manufacturers which exclusively supply hotels don’t usually face a large drop in sales during winter; the dip in winter sales is usually between 15-25 percent.”
This indicates that those ice cream outlets do not face the same obstacles as major supermarket ice cream suppliers.
The reason behind this disparity, Fittousie said, was that “manufacturers of ice cream for hotels and coffee shops tend to compensate for the seasonal dip by offering a full menu based on hot, sweet ice cream cakes as an alternative to ice cream alone.”
Entering the Saudi Arabian market in mid-2008, the manager of Napoli ice cream said that the potential of the Saudi market remains high.
“Saudi Arabia is the biggest ice cream market for retail outlets and the supermarket industry, yet Dubai remains the biggest for the hotel industry.”
Napoli ice cream hopes to gain 10 percent of the ice cream market in the GCC with their plan to open 25 outlets in Kuwait, Qatar, 8 of them will be located in Saudi Arabia by 2009. “Each outlet should see revenues of around SR1.8 million per year.”
Sadafco’s Business Development Manager Brian Strong said manufacturers who are big suppliers of ice cream to supermarkets estimate that sales drop by as much as 50 percent in winter compared to the summer season.
Strong was referring particularly to the Saudi ice cream market which he pointed owns 36 percent of the total ice cream market in the Gulf which a share of SR440 million ($117.3 million).
