Wednesday, October 26, 2005
Spices Trade in the UAE
On spices trail
Wars have been waged over spices; the foundations for colonial empires based on their appeal. Arabia, which once enjoyed a virtual monopoly in spice trade through its historic sea-links with India, today, sees new trends in spice marketing and consumption. The watchword is convenience. Rajeev Nair writes
It is a whiff that launched a thousand dhows. The allure of spices, which took the first Arab merchants to the coast of India, also set a trail for ambitious Europeans to build colonial empires in far-flung lands, and triggered meanly contested, fiercely fought wars — on land and at sea.
Today, many centuries after the first dhow from Arabia sought out the spice-rich coast of Kerala, India, spices continue to dominate the flavours of the Arabian lifestyle.
Conservative estimates put the beginning of the Indo-Arab spice trade some 3,000 years behind in history. The Indian Spices Board, the Indian ministry of commerce and industry's strategic arm to promote spice trade, winds the clock a further four millennia back.
Obviously, much has changed. Once predominant source markets have given way to start-ups; raw spices ground to taste, patronised with fervour until recently, have given way to convenience packages.
Colonial hangovers remain in spice trade but the mighty emperors have hung up their boots. In that space has rushed in entrepreneurs — small, medium and truly, multinational — all eyeing the fortunes that hinge on spices.
There is a new writing on the wall, though not necessarily total shifts in spice preferences per se. Black pepper remains the king of spices, and cardamom is its queen. But there are other overtures — a preference for spice mixes and masalas, for one.
The UAE, which forms a key part of India's high-value spice market — the West Asia and North Africa (Wana) region, signals such new trends that are then passed on to the rest of Arabia.
Giri Nair, director, Shama Food Industries, which boasts a truly Arabic brand name for its range of spices, gives the example of a trade enquiry from Lebanon for Malabar fish curry masala mix. "The spicy Malabar fish curry is not even remotely associated with Lebanese culinary traditions. Yet, the market is warming up to such new possibilities."
For long, a hub in re-exporting spices, imported from the Malabar coast in India for richer markets in Europe, Dubai today witnesses a flush of spice retailers — at least two of them having full-fledged manufacturing and packaging units in the city.
The winning formula in retailing hinges on quality. Gyma Enterprises, which trades in exotic spices, herbs and dried fruits, enjoys "34 per cent market share in the A and B category" according to its general manager, Jean-Marc Lourau. Processed and packaged at its plant in the Jebel Ali Free Zone, Gyma pegs its market stakes on "purity" and has HACCP and SQF 2000 certifications.
Traditionally, the biggest competitor to spice retailers, apart from the traditional spice souks, has been the unorganised "flour mills." Their market share has plummeted with more seasoned players making a foray, says Shaji Thomas, retails sales and marketing manager, Gyma. Lourau attributes this to the quality levels that go into packaging branded products.
Giri Nair points out the Sudan 1 toxic dye (this red dye was found in a chilli powder used by a British company to make Worcestershire sauce) scare that has caused a ripple in the retailing industry. "In the unprofessional spice retail sector, there is no way you can monitor for such contamination."
The seasoned players, therefore, say it is imperative to trust branded products, especially those packaged locally. "It is like marketing milk, fresh from the farm. We bring spices ground today fresh to the supermarket shelves," says Nair.
Even as branded spices are on the rise, they also face stiff competition from the very supermarkets that house their products. Many local retail outlets have their own "in-house" spice brands. And in a bid to stifle competition, the retail outlets have introduced the practice of "category management" wherein only very few spice brands are given shelf-space.
It is in this context that out of the box thinking and a close scrutiny of actual market trends come handy. Shama, for example, has broken ground in the Arab spice blends sector. "Arabs are large consumers of spices. They not only use spices to flavour their curries, they are also aware of its medicinal properties," says Giri Nair.
"Cinnamon sticks are now proved to reduce diabetes and blood pressure; the Arabs were aware of it way back in time. Cloves have long been associated with maternity care here — these are all a part of the Arabian tradition even before Ayurveda came into vogue," explains Binu Nair, marketing manager, Shama Food Industries. Arabs also have a preference for Zatar, a blend of thyme leaves, oil and sesame seeds; and dry hibiscus, which is used as a herbal tea.
"Ordinarily, the local community prefers to buy raw spices and grind them. But today, they are showing a preference for packaged Arab spice blends, which we have introduced in the market. In fact, we have gained about 400 per cent growth in spice blends and packed spices retailing in the Co-op sector alone." He attributes this shift in purchase patterns from bulk buying at the traditional souks to selective picks at the modern supermarkets to the demands of modernity.
In tune with the convenience factor demanded today is the evolution of a vast array of spice mixes or masalas. "Gyma has a strong presence in masalas," says Lourau. "And we also package spices to cater for the distinct requirements of various nationalities, and these are placed in retail outlets based on their predominant clientele."
Spices Board of India, which had showcased a contingent of spice exporters at the recent Gulfood, took part in the Dubai expo particularly to promote "trend of new value-added spice products like instant spice mixes and ready-to-cook meals. We want to shift attention from traditional spices to their export potential," says Dr PSS Thampi, deputy director, Publicity, Spices Board.
Spices Board sees great potential in Arabia. "We had launched our Indian Spices logo in the Gulf, and we also had a trade promotion office in Bahrain," says Thampi.
Though Arab demand for cardamom and black pepper continues, India's dominance as their supplier has been offset by Guatemala and Vietnam, respectively. Thampi forecasts a change in the trend. "Spices Board is launching a new initiative, Flavourit, in association with the Spice Trading Corporation Limited, for promoting cardamom, vanilla and black pepper. This will facilitate on-line marketing. In India, people can also place their orders at the local post office."
He says the chief problem with India is that while it is the "biggest producer and biggest exporter" of many spices, the country is also their "biggest consumer."
The UAE, however, continues to source it thyme leaves from Jordan, and many herbal spices from Turkey. Cumin comes from Iran, Syria and India; nutmeg and cloves are more or less exclusive to India; China claims the cinnamon market; India and Pakistan dominate on chillies; and Iran is the chief supplier of coriander.
India has emerged as the chief supplier of turmeric and ginger, with the country enjoying a virtual monopoly in the turmeric market. The Indian turmeric is preferred for its high curcumin pigment content.
The principal challenge in spice marketing, says Giri Nair, is the price fluctuations of raw spices. Bad crops can get spice prices skyrocketing, which cannot necessarily be passed on to the retail market. "India had a very good monsoon and the crops were good," he says. "This has enhanced the bargaining power of Indian farmers also because many other competing countries faced a bad crop situation."
The dynamism, inherent in spice trade, is set to stay. And even if there aren't empires to build or countries to conquer, spices can still help you fetch a place in the hearts — through the stomach — and that explains the newfound emphasis on instant masala mixes. It is a modern world out here, and the spice trade, which has long marked the tides of history, is not going to sit back idle.