08 August 2013

BEIRUT: Competition between the hundreds of mom-and-pop confectioners, boutique chocolatiers and international candy brands scattered throughout Lebanon is fierce all year round, but during Ramadan and Eid al-Fitr the fight for the loyalty of Lebanese consumers reaches a fever pitch. The sheer number of small, family-run sweets establishments in Lebanon and high turnover among new retail outlets makes it difficult to obtain precise figures on the local market, but there are over 100 companies listed in the Association of Lebanese Industrialists’ guide to confectionery exporters in the country.

While other segments of the retail market have suffered this year, five Arabic confectionery companies interviewed by The Daily Star all agreed that while the field is crowded, sellers of sweets – helwayat in Arabic – have fared comparatively well this year.

“Competition has always been bad, but now it is the worst,” said Simone Douaihy, who runs the eponymous sweets company his father established in northern Ehden in 1936 along with his siblings.

“Lebanese customers want to try everything. They don’t care if it comes from us or Al-Hallab or Sea Sweet. The more competition there is, the better it is for the market.”

Douaihy said the major players in the traditional Arabic sweets sector of the confectionery market hadn’t changed much since he entered the family business in 1994.

Along with Douaihy, a handful of chains including Al-Baba and Abdul-Rahman Al-Hallab, claim the lion’s share of the traditional Arabic sweets and dessert market.

Though Douaihy has seen an overall drop in sales at some of its retail locations in 2013, the Jounieh branch got a boost from a recent billboard battle with competitor Al-Hallab that quickly went viral.

“[Al-Hallab] started it with the Sahr bi Jounieh Helou [He’s in Jounieh? How Sweet] campaign and we replied,” Douaihy said, referring to Al-Hallab’s billboard that announced the opening of a branch in the area.

Douaihy promptly responded with a giant advert that read: “You’re late coming to Jounieh, sweetie.”

The Beirut branch of the patisseriehas performed well so far this season, making up for unsteady sales or outright losses at the other five locations in Lebanon, such as the airport store, which is suffering from the lack of tourists, Douaihy said.

Though the fighting in Tripoli did cause sales to drop about 20 percent, Douaihy said, business has improved in the north since the situation calmed down. The opening of two new branches in Lebanon has also offset losses, bringing the overall year-on-year decline in the first half of 2013 to about 10 percent below the same period last year.

“No matter what the political situation is like, we always get a boost during Christmas and Ramadan,” he said. “Overall, business has been steady during Ramadan this year compared to last year.”

Zahr al-Hallab, one of the co-owners of Abdul-Rahman Al-Hallab, which his father established in 1888, estimated that about 20 local confectioners compete directly with his retail locations across the country.

In the north, the main player is Rifaat al-Hallab, while Douaihy and Al-Baba have retail outlets across the country that vie with Al-Hallab for a bigger market share.

“There is a love of sweets all over Lebanon. You can’t say there is one area that doesn’t have sweets,” Hallab told The Daily Star. But he added, “The market isn’t saturated yet.”

Even though local sweets retailers agree that there is enough demand in Lebanon to go around, most of them have expanded regionally as well as locally in the past decade.

A franchise of Abdul-Rahman Al-Hallab recently opened in Kuwait and there are four other locations in the pipeline elsewhere in the Middle East, Hallab said, though all will sell products manufactured in Lebanon.

Al-Baba exports 20 percent of its production and sells the rest at its five different Lebanese retail outlets, said the chain’s executive secretary, Amani al-Baba.

While the market for traditional Arabic pastries is still dominated by family-owned outlets, local confectioners are increasingly competing with global brands, such as Nestle, in the supermarket aisles and the wider retail landscape.

Rainer Mueller, the communications and marketing services director for Nestle Middle East, said that total chocolate sales in Lebanon had increased from $125 million in 2011 to $143 million in 2012 and the per capita average annual consumption rate is 2.875 kg of chocolate, one of the highest in the Middle East.

Though Lebanese tend to veer toward maamoul and more traditional Arabic pastries during Ramadan, even demand for Nestle products like Kit Kat, Lion bars and Smarties rises during the Ramadan season.

Nestle is expecting another double-digit growth in chocolate sales between 2012 and 2013, Mueller said, despite the investment of significantly larger sums in advertising and promotion on the part of both local and global players.

“Confectionery ... is a highly emotional category with relatively low consumer out-of-pocket expense, which is stimulating competition,” Mueller said.

“We are competing with both global and local players which is challenging and exciting at the same time.”

Copyright The Daily Star 2013.