The UAE-based company launched sour marshmallows - Nom Noms Marshmallows Cola - at trade fair yummex Middle East last week and plans to add further variants after building a 7,000 sq ft facility in Dubai.
Blooming Foods is targeting $10m-$20m revenue by 2020 driven by the Nom Noms brand.
Gap in soft candies market
Brand owner Blooming Foods was established in 2014. The family owners of the company had been in food manufacture, sales and distribution in Kuwait for roughly 50 years with snacks and bakery firm Kitco.
"Now they had the opportunity to look outside of Kuwait and to look at other industries. They have analyzed what's available in the [Gulf Cooperation Council/GCC] market and see a gap in confectionery - soft candies to start with," Blooming Foods' director of sales & marketing Laurence Bolger told ConfectioneryNews.
The company has built a green-certified facility (ISO 22000 and HACCP) at the National Industries Park, Dubai, which it says gives it access to international markets.
"We've built for the future. Today, we're not utilizing the full space at the facility, maybe only 25%,” said Bolger.
‘Perfect science’ of marshmallows
Nom Noms Sours Cola won the yummex Middle East Innovation Award for best sugar confectionery last week. The brand will retail for around 1 AED ($0.28).
The halal-certified product is made with beef gelatin and Blooming Foods claims it is the first sours marshmallow for the Middle East.
"Marshmallows are such a perfect science; you need to be very careful with them. It's a very soft product so if you add a sour or acidic flavor it will actually shrink and break down,” said Bolger
Blooming Foods says it has found a way to overcome this production challenge.
Cola is its first sours SKU, but it has plans to launch two or three more sour marshmallow variants under the Nom Noms brand, which are being finalized now.
"This is a way forward for marshmallows...we can innovate this category further," said Bolger. "Today there is nobody else in the region producing marshmallows."
‘Natural alternative’ flavors
Nom Noms will compete in the UAE against American marshmallow brand Campfire and Haribo’s fish gelatine products imported from Turkey, as well as Chinese companies offering a lower price point.
"In the market today there's only one company hitting a one dirham ($0.27) price point. We have a very soft and fluffy product compared to what they have and we're adding ‘natural alternative’ colors and flavors and nobody is in that area,” said Bolger. "Everybody else is using artificial colors and flavors.”
Bolger defined a 'natural alternative’ flavor as one that blends two or more natural source to obtain the result - for example, a strawberry flavor with real strawberry, combined with another natural source.
UAE’s evolving retail market
Nom Noms already has distribution in the UAE for its nine other non-sour marshmallow SKUs at retailers such as Co-op and Carrefour.
"The retail market in the UAE is developing quickly - going from an old-school grocery and smaller stores to bigger chains with multiple outlets,” said Bolger.
"Our business model is to have a distributor in each territory. We have distributors now in UAE, Bahrain and Jordan,” he said.
Blooming Foods sees further export potential in Saudi Arabia. "Just by economies of scale, Saudi will be a big market for us," said Bolger.
"We want to get volume going - we're a startup company - but we also want to build the brand...we have the potential to be doing $10-$20m turnover per year in the next three years,” he said.
Sugar taxes in the region
Nom Noms will operate in a market increasingly conscious of sugar-rich products. The UAE recently followed Saudi Arabia by placing excise taxes on energy and soft drinks.
"We don’t know how it’s going to pan out in the future,” said Bolger. “Maybe there will be a sugar tax on a wider range of consumer products in this area. We hope there isn't.
"…The Middle East faces a big problem with obesity and diabetes and this isn’t only with local people, but a lot of nationalities living here. Governments in the region are fighting it,” he said.