SME profile: Dubai caterers look to earn a crust on a big scale

Coming up with an unusual name for an upscale food & beverage brand to stand out in the Dubai crowd is half the work done, and it came to Manar Al Jayouchi while driving.

1762 is the year the word “sandwich” was used for the first time in a written record, a nod to an English earl of an eponymous region. The concept was launched in 2010, providing an upgrade of Mr Al Jayouchi and his wife Suzi Croft’s grab‘n’go food catering business to an eat-in set-up.

The Appetite Group had started out in June 2005 with a packaged range of sandwiches sold in offices and petrol stations, with Dh240,000 in initial investment, including rent, kitchen construction and equipment.

“The whole objective was that the deli would one day cater to sophisticated busy people,” says Mr Al Jayouchi, a Syrian-Palestinian. “The gas stations were great for brand building and exposure, we didn’t have to put up a Dh1 million billboard on Sheikh Zayed Road.”

__________

Free ads

■ For SMEs who want to place an ad free of charge visit: www.thenational.ae/small-business-ads

__________

After its first year Appetite had outgrown its initial premises of 750 square feet in Al Ghusais, but the bottom line was not healthy and they needed to find investment to expand. With Dubai’s economy booming in those pre-financial crisis years, it was hard to find a contractor and premises within their affordable range. They finally found a space in Al Quoz. The team had grown to 35 by then, including the two founders.

They found another partner who was willing to come on board.

The business started picking up in 2008, the company broke even and then the global financial crisis hit the region the next year.

“Did we face the crisis, yes, because there were less people on the seats,” Ms Croft says. “The catering business dropped by 50 per cent as offices stopped ordering and business started to shut down.”

After pulling out of petrol stations in 2008, the company started supplying to grocery stores such as Spinneys and Waitrose, and orders snowballed from there.

“We had two people in the kitchen and I was wearing all the hats – delivery, purchaser, cashier, petty cash handler,” Ms Croft says.

The bottleneck was finding enough people and enough cars to deliver.

That was around the time the founders came up with an idea to start 1762 and offering fresh food.

“The best time to expand is during tough times because you get better deals but financing was hard to find,” Mr Al Jayouchi says.

The first store was started in November 2010 in Jebel Ali but was closed in 2011 as sales were not enough. The same year they opened their flagship shop at the DIFC. The Jebel Ali branch reopened in April 2012 and was an immediate success, he says. They opened another 1762 in Media City in January 2015. One in Abu Dhabi is expected early this year.

In November, a 1762 Stripped artisan bakery opened in Jumeirah Lakes Towers (JLT) in Dubai.

The Appetite group had revenues of Dh40 million last year, flat over 2015. That is up from Dh800,000 in the first year. This year, it expects to grow the revenues by about 8 per cent. The number of employees has now touched 200 and there are 300 items on its menus.

While they have been approached to sell their business, the couple has no exit plans yet.

“At least once a week somebody wants to buy us out but they find us expensive,” Mr Al Jayouchi said. “Down the line we can expand regionally and we can work at a franchising concept.”

By 2021, the consumer foodservice market in the UAE is expected to grow to Dh76.2 billion in sales up from Dh57.1bn last year, according to Euromonitor International. In the short term, however, there are some headwinds.

“[The] strong [US] dollar, increasing competition and lower consumer confidence related to low oil prices are behind a projected slowdown,” says Nikola Kosutic, an analyst with Euromonitor International.

“It is very challenging now compared to when we started 12 years ago,” Ms Croft, says. “There is so much competition.”

ssahoo@thenational.ae

We are on the lookout for SME success stories. If you want to have your business profiled, contact us at business@thenational.ae

Follow The National's Business section on Twitter