Scot choc-maker iQ breaks into 3 GCC markets
The firm, which was founded two years ago, is preparing to ship palettes of its chocolate bars – which trade on their “free-from” status and health credentials – to Kuwait and Qatar, and is in the process of finalising a distribution agreement for Dubai. iQ had previously shipped a small batch of its products to Dubai retailer The Change Initiative, but these new agreements will mark its first regular exports to the Middle East.
‘This is our market’
“The Middle East has proved to be incredibly receptive,” said Jane Shandley, co-founder of iQ.
“I remember going into Spinneys in Doha, about two years ago; I met a manager there, and he said they used to have one section of one aisle for organic products – now they have three aisles. He said the same was going to happen with gluten-free – and I thought, this is our market. It’s going to transform our business,” she added.
iQ’s bars are organic, vegan, free from gluten, nuts, dairy and soya, and have a low GI. Shandley said this gives the firm’s products a significant advantage in the market – but it struggled to capitalise on it initially. At first the products’ packaging didn’t have the free-from information on prominent display, causing confusion among potential customers.
“We ended up with our chocolate stuck beside candy in shops – and people would look at it and think, that’s a very expensive candy bar. But the minute we were more up-front about the free-from credentials, it made a huge difference – particularly in the Middle East where they have all these diet-related issues. Suddenly we had an open door,” she said.
The firm now has an exclusive distribution agreement in Kuwait, a deal with retailer Monoprix in Qatar, and expects to agree a new deal with a Dubai-based distributor shortly. According to Shandley the volume of business iQ expects to do with the Middle East has made it worthwhile to get product labels printed in Arabic, instead of using stickers – although this process has been more complex than expected.
Regulatory ‘back-and-forth’
“We thought the Arabic labels would be fairly straight-forward – he sent us what he thought would be required, we put that on, sent the mock-up back to him, and he took it to the regulator over there”, said Shandley, adding there was significant “back-and-forth” with the regulator before the labelling was finalised.
“We’ve now finally got that, so we’re going to print. To Kuwait, the distributor’s first order is a palette, which is 420 cases – but he reckons he’s going to get up to a palette a month fairly quickly. That was exactly the same as the new Dubai agreement,” she said.
The firm is now waiting on confirmation from Monoprix in Qatar on whether it wants the Arabic labelling, in place of the stickers that had initially been agreed to. Once all the details are finalised and the shipments start, though, Shandley expects it will have a major impact on iQ’s fortunes.
“That’s significant for us – we only launched in September 2013, so we’re still a very young business,” she said.
