Interview: Chocolate brand Patchi on its ambitious expansion plans

Patchi has come a long way in 43 years. Launched in Lebanon in 1974 when founder Nizar Choucair opened a single store in his home city of Beirut, the confectioner is now one of the most recognised and popular chocolate brands across the Middle East.

The company has a presence in more than 30 countries worldwide, including the GCC nations, Canada, France, Ivory Coast, the UK, the US, the Philippines, and numerous other locations, while its growing network of more than 175 boutiques can be found in some 21 countries.

And there are no signs of slowing down. In May the chocolate maker broke ground on a new factory in Dubai – it’s largest yet – designed to support further growth around the world.

Ahead of Ramadan – one of the company’s busiest periods – Patchi UAE’s CEO Oussama Choucair speaks with Gulf Business about the group’s future plans, its new facility, and why the brand is held in such high regard.

2017 seems to be a landmark year for Patchi, with five new retail outlets and two new warehouses already announced. Is this a signal of intent by Patchi? Do you plan more aggressive movement in the market in the coming months?

This year Patchi UAE will inaugurate three new boutiques, as well as the new headquarters in Al Quoz with a warehouse and offices, and the announcement of the new manufacturing plant in Dubai Industrial Park to be completed by 2018.

We tend to dismiss the overall sense of fear that some might have during these so called challenging times, and we would rather focus on expanding based on market requirements. We have great confidence in the UAE’s economy and potential, and the vision laid out by its leaders.

The company has broken ground on a new manufacturing plant in the UAE. What details can you give at this stage about the plant?

Designed to be some 122,000 square feet, the facility will be Patchi’s biggest manufacturing plant in the world. It will complement and support the company’s ongoing regional and global growth.

Integrating the highest quality of construction, sustainability and reliability standards in conformity with LEED guidelines, the facility when completed in around 18 months will include fully functional production zones, service areas and management offices. The factory will have a daily production capacity of up to 10 tonnes.

How will the new plant change things for the company? What will it mean for Patchi in the UAE and wider GCC?

The new production plant will ensure an efficient supply process of Patchi’s growing demand throughout the different sectors it caters to. It will also enhanced efficiencies across distribution channels including retail boutiques, the corporate division and travel retail.

How satisfied are you with the past year’s business performance? How did the company fare against the difficult economic backdrop?

Just as we did back in 2008-2009, the company thrived. We weathered the challenging times with double digit growth from last year through the different divisions at Patchi UAE. Not only did we continue with our expansion plans, we also invested in training programmes for our staff to ensure we are offering the best service at our boutiques to retain our customer base. What’s more we’ve increased our marketing budgets for direct and focused campaigns.

What is the current state of the confectionery industry overall? Is it enjoying growth in the region or is it coming up against challenges such as the fight against diabetes?

The confectionery industry is still growing and the demand for chocolate is still on the rise. The UAE’s chocolate market alone is expected to grow by 8 per cent annually up to 2021.

On the theme of diabetes and obesity in particular, how does Patchi balance concern over these conditions with maintaining revenues – especially with regard to the children’s Patchino range?

As a premium chocolate brand we did not see an impact, although we have seen a relative increase in demand for dark chocolate and for our no-added sugar line. We also have plans to introduce new flavours targeting health conscious customers.

This year Patchi was awarded its halal certification from the Emirates Authority For Standardisation and Metrology. How important is this to Patchi and do you foresee it enhancing business?

While we’ve always been halal compliant, we believe in the importance of leading the way to receive the required accreditations as the first halal certified chocolatier in the UAE. This is a testament to our respect to the UAE’s culture and vision, especially with His Highness Sheikh Mohammed bin Rashid Al Maktoum’s plan to make Dubai the capital of the halal economy. Naturally that will have an impact on sales, though it is not the main objective of the certification.

We’re now coming up to Ramadan, which is a peak period for Patchi. How much emphasis do you put on the Holy Month as a company, and how do you plan for the increase in demand?

Ramadan is definitely one of our biggest and most important seasons at Patchi UAE and we start preparations more than three months prior throughout all our departments and facilities to ensure we are ready across the board. In terms of products we created the Tasali collection – a limited edition line of unwrapped chocolates for this holly month. This year we have introduced more than 60 new flavours.

No doubt thanks to Ramadan and other peak seasons, Patchi is rated one of the top brands in the UAE, ranking 5th in the 2017 MBLM Brand Intimacy report for consumer goods brands. What is it about Patchi that resonates so well with people?

With more than 33 years in the UAE, Patchi is rooted in the local culture. We recognise the importance of respecting our clients’ needs and we have adapted our
flavours, concepts and offerings to meet their requirements.

Dubai and the UAE in general is home to a diverse community with so many nationalities, and we celebrate all the major festivities with our customers. Be it Chinese New Year, Ramadan, Eid El Adha, Diwali, National Day or Christmas, we develop a complete collection and products to be part of their celebrations. What’s more, we have a gifting cycle at Patchi that accompanies our customers from a baby’s birth through to our kids’ line, graduation, weddings, and beyond – as well as catering for all other joyous occasions and holidays.

There were reports of a potential stake sale last year which were quickly quashed, partly due to the instability of the economy at the time. Is a sale something that Patchi would revisit in the coming months? Is this part of the company’s long-term strategy?

There have always been talks about this for so many years now. Like any other company we always weigh up our options, but at the moment we do not have any plans to consider such a move.

What other future plans can you reveal? Do you expect even more regional growth? Or possibly expansion into new markets?

We are constantly exploring new opportunities be they local or international, and we are always approached to franchise in new markets. However, we are very cautious with whom we do business because we need to ally with the right strategic partner who will maintain and respect our brand and its representation.