From construction and gas to delivering fruit baskets was plucky move for Al-Braik Investments reports Precious de Leon.
Edible Arrangements is the first retail concept from gas, oil and construction conglomerate, Al-Braik Investments.
"Everybody's talking about a bubble in the property market. While we believe that growth in this sector will continue, we knew we also needed to diversify. " says Said MBarak Al Digeil, CEO, Al-Braik Investments.
Edible Arrangements makes 'flower-like' arrangements out of fresh fruit. Different packages are offered, including fruits dipped in chocolate or nuts. The idea to launch in the Middle East was quite literally hand-delivered to Al-Braik.
Company chairman Shukri Al-Braik accompanied his mother on a trip to the US for medical treatment in 2006. A friend sent an Edible Arrangement bouquet to the hospital, an event that saw Al-Braik jump in his car and drive the 177 km miles from Massachusetts to the company's HQ in New Haven, Connecticut. He returned shortly after with the first Middle East franchise which covers the GCC bar Saudi Arabia. The first outlet opened in Dubai last December. The second follows next month.
"We are in aligning process," says Al Digeil. "Even with us having a different industry background, we've been lucky to have the right team in place. Trainers from the US came to train them and they adapted very quickly."
A soft media campaign promoted the launch and was primarily focused on gift-giving with an emphasis on doorstep delivery and store access.
Flyers were distributed in high traffic areas such as cafés, residential homes, offices and other locations and the company also tied up with Emirates Bank to distribute direct mailers to cardholders.
"The primary target group is the A-B segment such as those who opt for bouquets that cost up to $545 (2000 AED).But we also offer choices for segments down the line to try and cover everyone," adds Al Digeil.
DM remains the marketing tactic in the near future and talks are underway with other financial services, including ABN-AMRO, Standard Chartered and American Express.
"We target cardholders because we direct part of our business through the web and phone," says N. Krishnan, business development manager - franchise.
Marketing strategy and collateral is developed in-house while design is from the US, which also supplies web support. This will be the same for any sub-franchises.
"As we open more stores, then we build a regional marketing strategy and involve creative agencies. Right now, with just one store and distribution still being put into place, it's not justified to take it to that stage," says Krishnan. Actual marketing spend was not disclosed.
Other than as a gift, the "bouquets" are catching on in the events and corporate segments and weddings.
Discussions are under way with a number of hotels, including Burj Al Arab for VIP suites, events and weddings. The company is also working with wedding and events planners.
"The local community has been very responsive. We also want to educate the expatriate community," says Al Digeil.
The idea has caught on mostly through word-of-mouth. "With every delivery made, more interest was garnered," says Al Digeil. "In fact, ongoing talks for a sub-franchise started because a company was delivered one of our bouquets."
Several sub-franchise deals are in discussion with two stores to open in Al Ain by yearend. The long term plan is to open up to 30 stores across the region over the next five years, either through sub-franchising or under their own investment.
An agreement has been signed in Qatar for three possibly five outlets in the next three years. The first opens this summer. Al Digeil has also visited Kuwait. "So far, from the figures we have, Kuwait is potentially the market for Edible Arrangements," he says.
Expansion, however, is not without its challenges.
Despite its success the company was still caught short on February 14th.
"We had not anticipated the more than 100 deliveries plus the people who came to the shop to collect their bouquets," says Al Digeil. "We were overwhelmed with orders on that day and we made mistakes but the planning process is sorted and we will improve our customer service," he stresses.
A sales and operations manager has recently been appointed.
Along with fine-tuning distribution, finding retail locations is also a challenge. "There's a lot of competition for the right retail space out here," says Al Digeil.
"Once set up in malls, we can start to promote the product as an impulse buy and not just as a pre-planned gift," adds Krishnan.
Hospitals are also in sight where the idea is to open a small counter where visitors can buy "bouquets" stored in specialised chillers.
Another major challenge is the fruit which is sourced from around the world depending on availability.
With this is mind Al-Braik has decided to set prices for each "bouquet" and not pass-on price fluctuations to the consumer. The company also has to deal with supplier preconceptions. "Most suppliers have not seen the impact Edible Arrangements will have on their overall business," says Al Digeil. "They initially see it as a one-off deal."
In addition, as with any imported concept, regionalisation is a must.
Dates have been introduced and vases or bouquet foundations decorated with crystal and lace in line with local tastes.
Looking ahead, Al-Braik intends to strengthen its franchise division and is close to opening its second retail concept, Fruitation, which offers fruit salads and fresh juices.
"We intend to bring a lot more franchises from the US," says Al Digeil.
A market just ripe for the picking you might say.
© Gulf Marketing Review 2008
