In September, Enterprise Estonia organised a trade mission for food and beverage companies to Saudi Arabia, including the successful snack manufacturer Balsnack. The company has now secured several new contracts as a result.
Balsnack began its journey in the Saudi Arabian market more than a year ago by partnering with Bin Dawood Holding Co., the operator of the Danube supermarket chain. This partnership originated at the Gulfood exhibition, where Balsnack found its first local partner. “We have already shipped them four containers of Grand Chips potato waffles, and another order is set to be delivered this December,” said Marko Utsar, Balsnack’s Export Manager.
The Saudi Arabian trade mission in September also opened new doors for collaboration. BThe company has now established direct contacts with representatives of two major retail chains: Othaim Co. and Panda.
“We’ve already started working with Othaim Co., which operates Saudi Arabia’s largest supermarket chain by store count. Their first order is scheduled to be shipped at the end of December. Negotiations with the Panda hypermarket chain are in their final stages, and everything should be ready for collaboration by January 2025,” Utsar added.
Balsnack is bringing its potato waffles to the Saudi Arabian market under the Grand Chips brand. However, pricing remains a significant challenge because local producers offer low prices. “Small packs there sell for well under 1 euro, which makes competition tough. Additionally, family-size packs are trendy as large households tend to buy in bulk,” Utsar explained.
As for the volume of new contracts, Utsar admits it depends on the retail chains’ product placement and promotional campaigns. “We estimate that both partners could order at least 4–5 shipping containers annually, translating to 300,000–400,000 packs of Grand Chips.”
The company´s snacks compete with international brands
According to Utsar, the main challenges in entering the Saudi Arabian market have been regulations and cultural differences. “Packaging must include Arabic labelling, and no product can enter the market without approval from the local FDA. ” Additionally, products and packaging had to be adapted to meet local requirements and consumer preferences.
Balsnack competes with the Latvian producer Long Chips, international brands like Lays, and various local Arab snack manufacturers. However, Utsar stated that the company aims to become a beloved and well-known brand in Saudi Arabia.
“We estimate that both partners could order at least 4–5 shipping containers annually, translating to 300,000–400,000 packs of Grand Chips.”
Marko Utsar, Balsnack’s Export Manager
“If we’re in three major chains by February, we aim to boost brand awareness and demand. The bigger task lies ahead,” said Utsar.
He emphasised the Enterprise Estonia`s significant role in Balsnack’s success. “Enterprise Estonia has been a key supporter, from facilitating successful business delegations to organising the Gulfood exhibition, where we found our first major partner, the Danube chain,” Utsar remarked.
GOOD TO KNOW
- Balsnack International Holding AS
- Founded: in 1992 as a family business. Is Estonia’s largest (and only) potato crisp producer. Its portfolio of over 100 different products is split equally between private labels and Balsnack’s own brands.
- Other production: since 2008, the company has been the sole producer of high-quality bird food in Estonia.
- Export growth: over the past five years, exports have increased by 500% (spanning 72 countries) and now account for half of the company’s total revenue.
- Facilities: two factories – a snack factory in Ääsmäe and a bird food factory in Keila, with a sales office in Tallinn.
- Employees: there are over 70 staff, some of whom have worked with the company for 30 years since its inception.
- Hit product: their potato waffle series, selling one million packs annually.
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