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Middle Eastern food industry to profit from month of Ramadan

Asian Muslims wait to break their fast in a food hall on the first Friday of the holy month of Ramadan in Dubai. (Karim Sahib/AFP/Getty Images)

Asian Muslims wait to break their fast in a food hall on the first Friday of the holy month of Ramadan in Dubai. (Karim Sahib/AFP/Getty Images)

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Although Muslims refrain from eating or drinking until sunset during the holy month of Ramadan, it has ironically become one of the most lucrative periods of the year for the food and beverage industries in the Middle East.

In Dubai, most restaurants close during the day throughout Ramadan, yet iftars (the sunset meal during which Muslims break their fast) and sohours (late-night meals taken as close as possible to—but still before—sunrise, fortifying Muslims for the day’s fast) are important revenue generators for food service operations and have good business potential. “The closures of outlets for lunch, and the limited areas where we can maximise beverage sales, has a slight impact [on profitability],” Kenzo Posth, the Park Hyatt Dubai’s assistant food and beverage director, told Arabian Business on Sept. 7.

“However, we catch up with the iftars and sohours, and especially with the corporate iftar bookings.”

“Iftar has become a great success year on year, and we experience a very busy period during Ramadan,” Carmen Mauthner, food and beverage manager of the luxury hotel Burj Al Arab, told Arabian Business.

Ramadan is a key period for food retailers in the Middle East as food sales rise by up to several hundred percent, according to Arabian Business. Beverages are particularly important since most Muslims break their fast with a sweet fruit drink to raise energy levels.

Beverage companies such as Coca-Cola and Nichols (the maker of Vimto — a purple soft drink containing juices, herbs and spices) expect their sales to peak during the month, thanks to heavy advertising campaigns and associations with charitable programmes.

Although major brands have seen their sales fall in previous years as daytime sales plummet, Coca-Cola forecasts record Middle East sales during the month. “As people welcome Coca-Cola products more and more during and after iftar, we estimate that we will not be negatively impacted during the month of Ramadan,” spokesperson Kadri Ozen told Arabian Business on Aug. 28. “While our specially designed packaging and visual campaigns will serve as our link to the festive spirit of the holy month … the many social programmes that we are engaged in help us build stronger connections with our consumers.”

The company has unveiled a special Ramadan design for its cans, featuring a crescent moon and a star, as well as publicising its involvement in a charitable campaign at a time when Muslims are encouraged to give back to society.

Arabian Business reports that 10 percent of Coca-Cola’s profits in Saudi Arabia during Ramadan will be donated to Insan, a charity programme that provides social and economic support to orphans. Furthermore, Ramadan is expected to boost sales for United Kingdom-based beverage company Nichols, whose fruit cordial brand Vimto has become a popular drink in Saudi Arabia.

Nichols’ chairman John Nichols told the UK-based Financial Times on Sept. 1 that strong first-half sales of Vimto, aided by Ramadan’s earlier occurrence this year, has helped lessen tougher domestic trading for its other core beverage brands Sunkist and Panda.

Aujan Industries Co., a licensed Middle East producer of Vimto, admitted that fruit cordials are losing ground to carbonated drinks among young consumers, but claimed that smaller brands are taking the hit, not the major players.

“We see those players each year shrinking and shrinking,” marketing manager Ahmed Shaboury told Arabian Business.

Vimto came to the Middle East 82 years ago and enjoys a highly profitable period during Ramadan, when sales of the British brand rise six-fold to 18 million bottles per month, according to Arabian Business.

Kraft Foods’ Tang is another popular, energy-boosting drink after a day of fasting. Arabian Business reports that sales are expected to rise by 200 percent during the month.

“You don’t want to break the fast with something that is carbonated,” Vishal Tikku, Kraft’s Gulf Cooperation Council marketing director, told Arabian Business. “So you’re looking for something that is sweet to drink, which quenches your thirst and gives you quick energy.”