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YOOK CEO Katre Kõvask on business in the Gulf States: Forget email, download WhatsApp and be present

YOOK

In five years, YOOK would like to be in the top three in the Saudi Arabian market, with a solid fan base and excellent partners, said Katre Kõvask, YOOK´s CEO. Photo: YOOK

Estonian company YOOK, the newest oat drink producer in Europe, has set its sights on export markets, focusing primarily on the rapidly growing Gulf States. While the alternative milk market might seem like a natural fit for Europe, the fierce competition and high price levels there make more distant markets, such as Saudi Arabia and Kuwait, more attractive.

In this interview, YOOK’s CEO Katre Kõvask discusses how they have adapted their strategy, considering the cultural nuances and consumer preferences of the Gulf States, as well as the challenges they have encountered. She also shares her experiences with local business culture, network building, and the importance of a long-term market entry strategy.

Ege Devon, Export Advisor for the Gulf States at Enterprise Estonia (EIS), conducted the interview.

Katre, what made YOOK look towards the Gulf States for export markets?

YOOK is the newest oat drink producer in Estonia, the Baltics, and, to our knowledge, Europe. The entire business is focused on export markets. When choosing export markets, we primarily consider market size, the coffee culture of the target market, the competitive scene, and growth opportunities.

Additionally, the target market must offer enough room for us to differentiate, either with our product, a niche, or both. The Gulf States, particularly Saudi Arabia, are among the fastest-growing regions for oat drink consumption, making them one of our key focus areas.

Wouldn’t it be easier to focus on a nearby European market with a better understanding of alternative milk products?

European markets are also part of our focus, but competition, price levels, and the market profiles in Europe sometimes make entering those markets more challenging than more distant ones. At the same time, Europe is a good trendsetter. As a producer based in Europe—especially in Northern Europe, where the environment and food are pure—this gives us significant added value when operating in more distant markets.

“Business is still conducted between people, and this is especially true in the Gulf States, where they first want to get to know you as a person, understand your values, plans, and trustworthiness, and then turn the conversation to business.”
Katre Kõvask, YOOK’s CEO

How do you see YOOK fitting into the Gulf market as a product?

With its European origin and excellent quality, YOOK is a serious competitor to the brands that currently dominate the market. Since we are new, flexible, and fast, we hope to shake up the large conglomerates and capture their market share. Of course, we must understand that these processes don’t happen overnight. A lot of work is required, a good network is essential—especially in the Gulf States—and timing is critical.

In the food business, you’re first judged by the main parameter, which may sound cliché, but it’s taste. Other criterias follow, including price, but delivery reliability is nearly as important today. We can offer something in these critical areas that competitors cannot, which could be how to get a foothold in these large Gulf markets.

You have extensive experience as an exporter—have you had to change YOOK’s market entry strategy for the Gulf States?

YOOK tailors its strategy according to the market. Of course, when shaping a plan, there are certain “red lines” we don’t cross in any market. Still, you must always consider the market situation, the competition, and the goals you want to achieve. The Gulf States are complex, and success and profit don’t come quickly. Therefore, you need long-term partners, a long-term strategy, and a capable team that implements this plan with your partners.

What have been the biggest challenges you’ve encountered so far?

YOOK is new to the market, and competitors are naturally unhappy that we’ve entered. So, market entry hasn’t been easy, and the journey, which has lasted almost eight months, has been quite winding and full of surprises.

When entering export markets, it’s always essential to understand the target market’s culture, which has been one of the challenges with the Gulf States. The culture, especially the business culture, is very different from what we take for granted in Europe. Adapting, understanding, and accepting this takes time and affects business operations and results. Additionally, the Gulf States are very different from each other, so you need significant analytical skills, tolerance, and even a bit of cunning.

Another major challenges in the Gulf and other distant markets are payment and delivery terms, where large countries far surpass Estonia. In Estonia, it’s common to request prepayment from partners, but in the Gulf States, this is relatively rare, and you must often deal with payment terms over 100 days, which inevitably increases costs through credit prices, insurance, etc.

These instruments are exceptionally costly and risky for a startup and can be a significant obstacle to entering an export market. Larger countries often have state-backed credit limits and other benefits to make market entry more flexible and accessible. So, all organisations involved in export development have much work to do to support Estonian exports.

Finally, I would highlight network—you need a network to operate in the Gulf States that helps you in situations where German precision won’t. Building a network takes time, and as we know, Estonians don’t always have the natural ability for small talk or simply doing small favours, which ultimately builds that network. And the network, in turn, helps untangle many knots. I want to thank EIS and mainly their export advisor, who does excellent background work and has valuable information about the trustworthiness of people or companies offering their friendship.

Business is still conducted between people, and this is especially true in the Gulf States, where they first want to get to know you as a person, understand your values, plans, and trustworthiness, and then turn the conversation to business. You need to take and give time; that’s probably the biggest lesson so far.

“The saying ‘Differentiate or die’ applies in every market.”
Katre Kõvas, YOOK’s CEO

Have you had to change your product’s branding for the Gulf market?

Regarding branding, YOOK has made or is making changes to better fit the Gulf markets. As mentioned earlier, we adapt our strategy to the market, which also applies to marketing. It would be best to consider the local culture, trends, humour, etc.

One example is that while the environmental friendliness of oat drink production is a significant selling point in Western Europe and the US, this message doesn’t yet hold considerable weight in oil-rich countries. It’s clear that before entering a market, you need to thoroughly review your branding to minimise the risk of cultural missteps. Hiring local experts who can pay attention to these nuances is a good idea. But throughout all this, the branding must remain unified, ensuring enough differentiation—a real challenge for any marketer. The saying ‘Differentiate or die’ applies in every market.

YOOK is an ambitious and rapidly growing brand. What are your goals for the Gulf States over the next five years?

In the Gulf, we’ve signed a distribution agreement with Kuwait, and we hope to break into the Emirates market, but our primary target market is Saudi Arabia. In five years, we’d like to be in the top three in the Saudi Arabian market, with a solid fan base and excellent partners. Along the way, we hope to find outlets in the rest of the Gulf States.

You’ve likely been asked this many times—how comfortable do you feel as a woman doing business in the Arab countries?

When dealing with another country, you must always respect that country’s culture and customs and remain polite and respectful because you are a guest there. The Arab countries are no exception, and if you follow this etiquette, there shouldn’t be any issues—whether you’re a woman or a man. Based on my experience, I can say that I’ve never felt any special treatment or barriers. As mentioned before, business is done between people, and if you click with someone, it doesn’t matter what gender you are or which country you’re working in.

What were the biggest misconceptions that didn’t turn out to be true—or, on the contrary, did?

There were very few preconceptions about the Gulf States. Rather, it was a lack of knowledge about their different cultures and customs and, how market segments function and what to expect when trying to get on the shelves of retail chains or into the HoReCa sector.

Each Gulf State is unique—they have different rules, channels, and logic. For example, the Emirates, especially Dubai, has a product range aimed primarily at expats, and commerce is relatively concentrated. On the other hand, Saudi Arabia is the size of half of Europe, where a partner’s logistical capability might be more decisive than pricing or product quality.

In Kuwait, 80% of the retail market is controlled by the local king—prices are set in a national system, and changing them is very difficult. You can’t find this information in textbooks—you have to be there in person, be visible, communicate, build a network, be representative, and invest time and money into the process. Only then will the results come.

“The entire business is focused on export markets. When choosing export markets, we primarily consider market size, the coffee culture of the target market, the competitive scene, and growth opportunities.”
Katre Kõvask, YOOK´s CEO

Hindsight is always valuable—what are the lessons you would now avoid or handle differently if you were starting from scratch? What advice would you give to other exporters?

There have indeed been lessons learned. I would advise anyone looking to get a foot in the door in the Gulf States to first consider how many resources—primarily time—they are willing to invest to achieve results because the process can take years. It would be best to determine what “smoke and mirrors” are and how to build the business. You need to understand when you’re being tested and when things are being taken seriously. And definitely, make friends with WhatsApp because old-fashioned emails don’t work.

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