Brands with bottle

As the makers of the some of the GCC’s best-loved drinks, Aujan Industries is the Middle East’s answer to Coca-Cola. Diana Milne meets Executive Vice Chairman Dr Kamel Abdallah to find out the secret to building brand power.

“We now have to work extra hard to maintain our leadership position because everybody is trying to copy us. They are even trying to copy our marketing campaigns”
-Dr Kamel Abdallah, Executive Vice Chairman, Aujan Industries

Advertising giant Saatchi & Saatchi coined the term ‘lovemarks’ to describe brands that are so loved by consumers that they transcend the products themselves and are known not for what they are but for the values they represent. Among those listed in the advertising giant’s top 200 are Coca Cola, Guinness, iPod, IKEA and Cadbury. One that it forgot to put on the list is Vimto – a drink so popular in the Middle East that it even features in the reconstruction of a typical Arab home at the Dubai museum.  “It’s got to the point where people completely associate Vimto with Ramadan and it has become ingrained in the local culture. People even tell jokes about it” says Dr Kamel Abdallah, Executive Vice Chairman of Aujan Industries, the company behind the brand in the Middle East since 1928. Vimto is not the only ‘lovemark’ in Aujan’s brand portfolio. It is also behind the hugely popular non-alcoholic beer Barbican and the juice drink Rani that is distributed to 56 countries worldwide. The strength of these brands has seen the company achieve phenomenal success, chalking up profits of US$500 million in just four years, one year ahead of target.

Today Aujan is the largest privately-owned, independent soft drink and confectionary manufacturer in the Middle East, with 2200 employees. Like most of the Middle East’s most successful companies, Aujan is family run, having been set up as Abdulla Aujan & Brothers in 1905.  However, unlike many of those companies, it is keen to ensure that it is run like any other private venture, with those who carry out the running of the firm chosen because of their credentials and not their family ties, and an emphasis on good corporate governance. Dr Abdallah says: “The success of the company is all down to good execution, leadership and strategy. We have been blessed with a board and a Chairman that have the vision to separate the ownership of the company from its management. This means that the management can concentrate on the execution of the Chairman’s vision. We are run like any other private company with good corporate governance and clear objectives it wants to achieve.”

Breaking the mould
This modern approach has seen the company set new standards in the region regarding the branding and marketing of its products, breaking the mould in terms of creativity and the use of new media. Barbican, which is aimed squarely at the male Arab youth market, has been the subject of several award-winning advertising campaigns, including the Supe-up Up Your Ride campaign which invited customers to send in a video of their car with the chance to win a free makeover of the vehicle. There were 1800 entrants and 86,000 people viewed the Barbican micro-site for the campaign.  Describing this success, Dr Abdallah, says: “We wanted to build a campaign where we didn’t talk down to the customer as much as the customers talked to each other. The uploads to the websites were unbelievable. We were getting 10 films a day that people had made on their digital cameras. Consumers found it to be a way for them to communicate with each other and that played a big part in our success. The passion for Barbican among the youth generation is unbelievable.” This success is a double-edged sword however, as Dr Abdallah says the company now has to work harder than ever to retain its market share as competitors are now seeking to emulate the success of its marketing campaigns: “We very much dominate the segment that we’re targeting which is the young Arab consumer. But we now have to work extra hard to maintain our leadership position because everybody is trying to copy us. They are even trying to copy our marketing campaigns.” The economic downturn means that for now Aujan does not plan to copy its own success by launching new brands – choosing instead to focus on its three existing strongest products; Vimto, Barbican and Rani: “We’ll always have innovations but probably not any new brands this year,” says Dr Abdallah. “Brands have a life of their own and starting them is not easy. You need to make sure you will be able to support them afterwards in order to have the right product, capacity and thinking.”

Having hit its US$500 million target a year ahead of schedule, Aujan’s eye is now on regional expansion and it has now entered the Iraq and Iran markets. Dr Abdallah claims Aujan is currently the only international company to have build a factory in Iran – a reflection of the bureaucratic and logistical challenges involved in setting up a business there: “Iran required a higher tolerance for risk and a long-term vision.  There is the risk of sanctions there at any time. The regulatory frameworks are very complicated. We also faced other challenges such as the intellectual property rights protection. There isn’t a good system there for protecting brands.  We had to work hard to protect our brand because we knew we were fighting copy cats.” The effort was well worth it: Iran is now Aujan’s biggest market in terms of dollar value after Saudi Arabia. “We thought it was worth the challenge,” says Dr Abdallah. “Iran has a population of 70 million and a good per capita income.”

Daring to venture into the Iraq market, where competitors feared to tread, has also reaped rewards for Aujan. It is now the company’s third largest market and it is planning to invest heavily in marketing its products on Iraqi television channels. The challenges it faced in setting up there were primarily security related, as Dr Abdallah explains: “In Iraq security is paramount.  Getting a team on the ground is challenging, particularly because of border controls. Some borders would close, some would open. There were also issues with customers and wholesalers in terms of payment terms and getting money,” he goes on to say.

Thinking big
Aujan’s success in Iran and Iraq has spurred it on to further expand outside its domestic market, the GCC, and to become ‘super-regional’. It now plans to target North African markets, and further afield, South East Asian and Eastern European markets. In North Africa it already has market share in Egypt, Libya and Sudan – where Dr Abdallah says it benefits from pan-Arab television advertising and good word of mouth: “We advertise on a lot of Pan-Arab television programmes. In addition, there are many Sudanese, Egyptians and Libyans working in the GCC and so they are familiar with our products.” Aujan now hopes to target new North African markets including Morocco. In Eastern Europe it sells products in Romania, Bulgaria and Albania where it dominates the fruit juice sector. It hopes to achieve similar success in Afghanistan where it has a five-year expansion plan.

This confidence in the future of the company’s international sales is impressive given the worsening global economic conditions. So far Aujan appears immune to the woes befalling many of its fellow GCC companies, having announced a 26 percent rise in 2008 third -quarter revenue and a 20 percent growth in sales. The company recently opened a new US$54 million factory in the Dubai Investment Park, which will boost its production capacity by 50 percent and announced plans to launch an US$40 million factory in Iran and to spend another US$50 million on expanding its main factory in Dammam, Saudi Arabia. That’s a lot of drinks. At present Aujan produces one billion cans or bottles of soft drinks a year. The figures, once the new factories on board, are pretty mind-boggling. Despite having hit its US$500million target a year early. However Aujan is not resting on its laurels. Dr Abdallah reveals it is already planning its strategy for the next phase of expansion and says we can only expect big things.

Aujan’s brands
Barbican: Launched to great acclaim in the 1980s, Barbican is aimed at the GCC’s growing youth market. A flavoured malt beverage, Barbican is aimed at the younger generation and keeps its leading market position by embracing regional changes in trends, imagery and consumption habits.Barbican is now available in a wide choice of flavours.

Rani: Originally launched in the region in 1982, Rani has been sold across the Middle East for over a quarter of a century. It was launched as a new concept in juices, with a recipe that combines smooth juice and real fruit pieces.
Rani has experienced tremendous growth across the Middle East and North Africa, and is now sold in over 56 countries worldwide.

Vimto: First introduced from the UK to the Middle East in 1928, Vimto is one of the most well-known brands in Aujan’s portfolio. It is particularly popular during Ramadan and has been consumed during over 80 Ramadan Iftar celebrations within the region,.
In addition to the original bottled cordial recipe, Vimto is now available as a carbonated, ready to drink can.

The Aujan’s industries heritage
Abdulla Aujan & Brothers was set up in the GCC in 1905 as a family operation trading in tobacco, rice and beverages. In 1928 the company obtained the exclusive rights to import and distribute Vimto in the Middle East, following the drink’s success in the UK. Shortly afterwards it became Aujan Industries and enjoyed two decades of growth starting in the 1950s and by the 1970s had established itself across Saudi Arabia and other parts of the GCC.
In the 1980s it launched its first home-grown brand, Rani, and by 1999 sales of the drink had exceeded 10 million cases. It also launched Barbican, a malt beverage, which it aimed at the Arab youth market.It continues to market Vimto and its two home-grown brands having established a strong R&D department.