The organization’s recently published report on the UAE chocolate sector said that the market was set for a compound annual growth rate (CAGR) of 6.09% from 2014 to 2019.
The global chocolate market is expected to grow just 2.3% over the same period, according to a separate report by MarketsandMarkets.
"Considering the growth opportunities existing in regions like Dubai and Abu Dhabi and low entry barriers to the industry, a number of new entrants are expected to foray into chocolate business in the near future", said Karan Chechi, research Director at TechSci Research.
Big international players have already upped their investment in the market in recent years.
Mars and Nestlé promotions
In 2010, Mars opened a $40m factory in Dubai to complement its other site in the emirate built in 1998. The company also announced in 2012 that it would boost capacity in the Middle East with a Galaxy/Dove factory in Saudi Arabia for an initial $60m investment and an additional $150m over the next 10 years.
Nestlé also opened a $136m manufacturing facility in UAE's largest city Dubai in 2010, which became its third largest Kit Kat plant worldwide.
Euromonitor International said in its own UAE chocolate report that Mars and Nestlé had heavily promoted their respective Snickers and Kit Kat brands in 2013 through TV ads and price promotions.
Mondelēz, Ferrero and Lindt
Mondelēz’s offices for Europe, Middle East and Africa are based in Dubai, but its nearest plants are in Bahrain and Dammam, Saudi Arabia. Ferrero and Lindt also have administrative offices in Dubai, but no manufacturing presence in the UAE.
According to Euromonitor, Mars led the market in 2013 with a 35% share, followed by Ferrero (15%) and Nestlé (14%).
Private label and gifting
TechSci Research said that private label penetration was quite high in the market, which was leading domestic companies to offer their products for private label at lower prices to stay competitive with the multinationals.
“Due to significant growth in the purchasing power of consumers and rising culture of gifting chocolates, sales of premium boxed chocolates available in varied shapes and attractive packaging are expected to grow in the coming years," said Chechi.
Sugar-free and limited editions
TechSci Research added that chocolate was more readily available in the UAE after a rise in retail and distribution stores. It said busier lifestyles were leading to higher intakes of high-fat foods creating a demand for sugar-free chocolates and darker chocolate.
Euromontior said that the growing base of 18-24 year olds would prove crucial to market growth. It said it expected a surge in limited edition products targeted at the age group as modern young adults demanded constant innovation.