Biscuit giant aims to push McVitie’s alongside local brands in Saudi
United Biscuits is a market leading biscuit producer in the United Kingdom, and products sold in over 100 countries worldwide. About 15%of sales come from markets outside the UK and Europe and the international market is the company’s largest source of growth.
However, the potential for sales of United Biscuits products in the Middle East is an area that still has room for expansion. The company already sells McVitie’s products in the region, but an October deal with Saudi biscuit and wafer producer, Rana Confectionery Products, will see the company expanding its product range further.
The British biscuit company teamed up with Saudi distributor Ali Zaid Al-Quraishi & Brothers Co. to acquire Rana Confectionery, in a deal hoped to increase manufacturing capabilities within the region and cater to growing demand for manufactured sweet snacks.
Alison Harper, Corporate Communication Manager for United Biscuits, told FoodNavigator: “The Middle East region is one of our key international growth areas. We have been selling a lot of exported product there but the Rana acquisition gives us a range of well-established Saudi brands and the capability to manufacture McVitie's products locally. It is also a good geographical fit between our Indian facility and a licensed facility in Nigeria.”
According to a Euromonitor report, the growing demand for sweet and savoury snacks within Saudi Arabia stems from changing tastes.
“Young Saudi Arabians are keen on sweet and processed food, and they have moved away from a diet of fresh fruit and vegetables,” it said.
The report also states that the market is expected to register a 2% constant value CAGR from 2012 to reach SR1.8bn by 2017. This potential, coupled with existing product demand in the region for United Biscuits products, has provided the ideal timing for the acquisition.
Harper explains: “UB was attracted to the Middle East by the strong growth in demand for our products which has helped to increase our international sales from five per cent of group turnover in 2006 to around 15 per cent of group turnover today. We are seeing growth of over 20 per cent this year in our international business and we are looking for this trend to continue. Having a local manufacturing facility in Saudi will certainly support this.”
