Applied Research

Project

Final Report

on
“To study the Demand Fulfilment changes
faced by the dairy industries amidst the Covid-
19 Pandemic in the UAE”

By: Aniketh H- GJ22GL054

 Introduction
The UAE dairy products in the market were valued at US$1.66 billion in 2020
and the forecast is that it will reach US$2.47 billion by 2026 with a CAGR of
6.89%. There are over 42,000 dairy cows in the UAE and the primary dairy
units are utilizing the milk that is Generated within UAE. Export of milk from
UAE is 17.5 million US$ (74%) and 5.85 Million US$ (25%) of Yogurt. The
increase in consumption of Value-added dairy products during the pandemic has
led to the increase in operational efficiency of dairy industries.The research is
essentially targeting four regions namely- Abu Dhabi, Dubai, Sharjah, Rest of
UAE.

RESEARCH OBJECTIVES

• To understand the efficiency of supply chain management systems

around demand management during the pandemic.
• To understand the Procurement Route of Milk Units from Farm to Fridge.
• To determine the dairy verticals that are most affected by the course of
the pandemic.
• To determine the change in SCM trends during the management of
demand.
• To Gain foresight on sectors which have the highest demand for dairy.
• To Understand the change in consumer behavior towards Dairy products
during Covid.
Literature Review
Author (year). Topic of the
Major Findings (Bullet
S/N Article. Name of the journal, Variables used in article
points)
Vol issue no.

Van Dijk, Z. (2021, 27 oktober). Evolving Consumer

Upward trend for UAE dairy preference leading to change
1 Seasonality
products. Dairy Global. in demand and supply of
Geraadpleegd op 13 april 2022, dairy products

Dairy Market | 2022 - 27 |

Trends and Opportunities
Industry Share, Size, Growth -
for distribution channels Size curves and
2 Mordor Intelligence. (2022, 13
affecting the demand distribution.
april). UAE Dairy Market.
forecast of Dubai Market
Geraadpleegd op 13 april 2022,

Techsci Research pvt ltd. (2021,

1 september). UAE Dairy
History of UAE's Dairy
Products Market Size, Share,
3 Industry and other Competitive Data
Growth, Trend & Forecast 2026|
economical factors
TechSci Research.
Geraadpleegd op 13 april 2022,
 Strategies to mitigate the impact
of COVID-19 on supply chain
Firms adopting Agile
disruptions: a multiple case
4 production and Regulating Store Attributes
analysis of buyers and
inventory planning
distributors | Emerald Insight.
(2021, 8 maart).

Localizing the efforts with

How the food industry is
flexible delivery options and Effective delivery system
localising supply chains. (2021,
5 enhancing seasonal logistics and available transport
23 februari). Dwtc.Com.
and adopting innovative capacity
Geraadpleegd op 14 april 2022
technology

Salaam Gateway. (2021, 2

september). Dubai’s F&B
leaders spotlight food Sustainable supply chain is High Demand of Dairy
6
sustainability. Salaam Gateway - the way forward Vertical
Global Islamic Economy
Gateway.

Consumption trend
Dairy Packaging in the United How is the consumption increasing the
7 Arab Emirates. (2022, 14 april). trend increasing the packaging and
Euromonitor. packaging quality quality

Bio, A. A., Laine, M., Chehtman,

Challenges faced by
A., Conway, J., Amatya, A., &
industries to Re-establish
Euromonitor International.
8 presence in local market after Digital space/Technology
(2022, 13 april). Five Consumer
E-commerce took over in the
Trends to Inform Dairy
pandemic.
Innovation. Euromonitor

PESTLE Analysis

United Arab Emirates is a luxurious Middle eastern country on the Arabian

Peninsula. The World bank reported that the UAE was one of the 25 largest per
capita GDP in 2014. The Country earns most of its wealth from oil exports and
other fossil fuels. With Other supplementary income between tourism and other
industries.
To support this study, we are conducting a PESTLE analysis to take a close
look at the socio-economic status of the UAE.

1. Political Factors:

• All seven emirates have their own governing bodies, allowing

flexible control across the country.
• The downside of the UAE is that it often creates political conflicts
with neighboring countries over land ownership and oil refineries.
• The UAE has sound commercial relationships with several
countries around the world.
2. Economic Factors:
• The UAE's GDP per capita is very good at US $ 41800.00.
• The unemployment rate in this country is also very low.
• The UAE's current CAGR is 4.73%.
• The country has one of the highest direct investments in the region.
3. Social Factors:
• Residents usually have a comfortable lifestyle, thanks to their well-paid
work
• As a result, globalization causes a cultural mix within the country.

4. Technological Factors:
• The relatively young population is highly tech savvy, that allows
companies to leverage technology.
• The amount of wealth UAE possess gives it the liberty to invest in any
number of equipment and make it stand at the forefront of
technological development.

5. Legal Factors: In the case of a country, there is little understanding of the

legal factors that affect the whole country.

6. Environmental Factors:
• United Arab Emirates has a fairly hot and dry climate and can produce a
variety of results. In such cases, productivity can be reduced and
agriculture can be difficult. Cold dairy products have the potential to sell.
• The country is close to some coastal areas.

SWOT Analysis

1. Strength-
• Strong brand in local and regional markets.
• A sustainable financial system that can support new development
projects.
• Skilled and unfamiliar staff and managers.
• Many years of experience in the local market in the dairy industry.

2. Weakness-
• Significant problems with employee satisfaction levels in the
company.
• High turnover rate in the company.
 • Lack of factory flexibility as the market will need it due to its size.

3. Opportunities-
• A growing middle class in the regional market.
• Stable economies of UAE, Qatar and Oman.
• The growing infrastructure of the UAE.
• Increasing the popularity of dairy products due to health problems.

4. Threats:
• Rigid Market Competition.
• Major threats to new entrants.
• Potential deterioration of the global or regional economy.
• Availability of flexible products.

Research Methodology

Secondary Research: Based on our Academic and industry literature review

through articles and journals we identified the Dependent and independent
variables.
Dependent Variables: Is your demand management system future-proof, able
to learn and predict customer demand by category, by product and by channel.
Independent Variables: Procurement, Production, Distribution, Assortment,
Inventory availability.

Primary Research:

• Questionnaire design: A brief Questionnaire will be designed to

illustrate if the demands of the customers are being met and if the
 industry is being able to match the same demands logistically at different
geographies.
• Expert Interviews in the industry: We will be reaching out to experts
in the industry to try and assess the steps they are undertaking in order to
manage their demand pre and post the pandemic.

Qualitative Questionnaire Design for Industry Expert (Anonymous):

• How has procuring milk from farmers affected during Pandemic?
• What product has had the highest demand post covid?
• What are the different sectors that have contributed to the loss of
demand in the dairy industry?
• What were the challenges faced while maintaining the Labour workforce
when there was a constant highs and lows in demand?
• What is the average cycle time duration between Order processing to
Shipping?
• What are some of the biggest issues faced with Utilising the plant
capacity and how did you manage to overcome them?
• What were the measures taken to improve the shelf life of products?
• What are the logistical problems faced while distributing milk
considering the pandemic and lockdown restrictions?

Research Findings and Analysis:

 Procurement for Milk from farmers has increased since even the demand
for milk was high. As a result, an extra 3 million litres of milk were
procured every day and paid an extra 800$ Million to the rural producers.
 Over the course of the pandemic there was a drastic change in the
consumer behaviour which made them more health conscious because of
which people shifted from loose milk to packaged milk.
 During peak of the pandemic, the demand for milk-based products
skyrocketed, Cheese increased by 80%, cottage cheese increased by 40%,
and the demand for condensed milk increased by 100%.
  There was a major loss in demand for the dairy industry amidst the
Pandemic as sectors like hotels, Catering services and Restaurants
stopped operations and reduced their procurement for Dairy.
 Massive impact on Sales as these organised sectors accounted for 20% of
the overall revenue for the sectors.
 Many labourers such as truck drivers and factory worker lost their job as
less milk meant less trucks and less operation of factories.
 As a result of this the Factory plant started to operate at 115% capacity to
meet the demand.
 To meet demand faster, plants from other companies which were lying
vacant was hired.
 Except for the ice cream vertical, all the other dairy verticals were
operating at full capacity.
 As trucks could not reach every Geography, Other modes of transport
was adopted such as railways, to reach different parts of the country.

Recommendations:
1) End To End digitalization: Partnering with an IT based company which
discovers, designs, and develops advanced information technology to
create a full-fledged digital system to manage and track every small detail
of supply chain operations which is carried out in the Dairy factory.
These will help us track our order successfully, for instance, how many
trucks are engaged and in which area, Helps understand which truck or
plant is at idle capacity and this will help direct the excess workload to
them and this can make every aspect of demand management optimally
utilised. Thus, gaining a complete overview on the supply chain enables
identifying the dairy vertical which is idle and how the resources of the
same can be used to the milk supply chain.
2) Cattle feed arrangements: Upon identifying that milk has the highest
demand. Therefore, in relation to procuring the right units of milk for the
growing demand, providing an extra surplus of cattle feed for the farmers
will help us meet our end goal of fulfilling demand.

3) Incentivising Labour Forces: After employing the labour force into

different streams of the dairy vertical, it is important to invest in their
future as ultimately their efforts and hard work is what helps us meet our
end goals.

4) Tying Up with Local Delivery Partners: It has been noticed that most
people have been staying at home during Covid-19 and they have been
 reluctant to step out to their nearest retail stores, though there is a high
demand for milk, people are still refusing to go out to buy it themselves.
This is when we have identified Online delivery partners who can get the
milk delivered “JUST IN TIME”.

References:
o Van Dijk, Z. (2021, 27 oktober). Upward trend for UAE dairy products.
Dairy Global. Geraadpleegd op 5 mei 2022, van
https://www.dairyglobal.net/industry-and-markets/market-trends/upwa
rd-trend-for-uae-dairy-products/
o United Arab Emirates Dairy Market | 2022 - 27 | Industry Share, Size,
Growth - Mordor Intelligence. (2022). UAE. Geraadpleegd op 5 mei 2022,
van
o TechsciResearch pvt ltd. (2022). UAE Dairy Products Market Size, Share,
Growth, Trend & Forecast 2026| TechSci Research. Geraadpleegd op 5
mei 2022, van https://www.techsciresearch.com/report/uae-dairy-
products-market/4122.html
o Strategies to mitigate the impact of COVID-19 on supply chain
disruptions: a multiple case analysis of buyers and distributors | Emerald
Insight. (2021, 8 maart). Impact of Covid 19. Geraadpleegd op 5 mei
2022, van https://www.emerald.com/insight/content/doi/10.1108/IJLM-
11-2020-0455/full/html
o How the food industry is localising supply chains. (2021, 23 februari).
Dwtc.Com. Geraadpleegd op 5 mei 2022, van
https://www.dwtc.com/en/industry-insights/how-the-food-industry-is-
localising-supply-chains
o Salaam Gateway. (2021, 2 september). Dubai’s F&B leaders spotlight
food sustainability. Salaam Gateway - Global Islamic Economy Gateway.
Geraadpleegd op 5 mei 2022, van
https://www.salaamgateway.com/story/dubais-fb-leaders-spotlight-
food-sustainability
o Dairy Packaging in the United Arab Emirates. (2022). Euromonitor.
Geraadpleegd op 5 mei 2022, van https://www.euromonitor.com/dairy-
packaging-in-the-united-arab-emirates/report
o Bio, A. A., Hariya, N., Euromonitor International, Euromonitor
International, Euromonitor International, & Euromonitor International.
(2022, 13 april). Five Consumer Trends to Inform Dairy Innovation.
Euromonitor. Geraadpleegd op 5 mei 2022, van
https://www.euromonitor.com/article/five-consumer-trends-to-inform-
dairy-innovation