Kuwait Food Industry: Discussing the Healthy Snacks Trend with Jassim Al Wazzan, CEO of Hectare’s

Interview with Jassim Al Wazzan, CEO of Hectare’s (Al Wazzan Foodstuff Industries Group)

What is your assessment of the food industry in Kuwait? What is your scope of business within the sector?

Hectare’s is our brand name and our parent company’s name is Al Wazzan Foodstuff Industries Group. The main focus of the company is to manufacture high end products including chips, popcorn, and snacks. Recently, we have started a new venture in our new meat factory. In the sector in general here in Kuwait, not a lot of companies are focused on high end products. The main focus of the other competitors in the market is trying to feed the masses, rather than specific clientele. That is where we come in. There is a big need for quality products that people will enjoy. Later on, even if an ordinary person comes and tastes this product, he would rather spend a nickel or a dime extra to buy this perfect taste and perfect product, than eating a bad tasting product just for the price sensitive issue.

What was your inspiration to branch off into specialty snacks?

We established Hectare’s in 2016. A couple of years before that, our Chairman, who is also my dad, Mr. Muntaser Jassim Al Wazzan, who founded the company, was a member of Mezzan Holding Group, which was later listed on the stock market and sold. He was in charge mainly of the production side of the company. He decided that it was better for the company and for his kids to establish a company that has his kids work full time, rather than taking his money and putting them in real estate and having them stay home waiting for rent to come in. He wanted us to be proactive in our sector. We found a plot of land and a distinct product that we could invest in. The initial dream, because he was part of Mezzan for about 35 years, was to make a meat factory from the start, but the plan has changed from that. We travel a lot to the UK and when we went there, we saw a growing market from Tyrrells Chips and Kettle Chips that were dominating the market. Not a lot of people are eating normal chips anymore and they have all transferred their palates to kettle chips. So, we put the meat factory on hold, and we came back to Kuwait and decided to start a chips factory and a popcorn factory at the same time. From the time we acquired the land and were up and running it was about a year and the journey started from there.

What is your competitive advantage and your main point of differentiation?

We want to be the leaders in our segment, and I think we are going there. Our chips taste as good as the European chips in Kuwait. We really had a big impact on the kettle and popcorns that are imported. Penetrating the upper market of the coops will be our main target in the next three years.

What makes us different is our machinery. We have the Ferraris of machines in Kuwait. Since the English started the concept of kettle chips, we brought all our machinery for the kettle chips from England. We use high oleic sunflower oil. In fact, we are the only people in Kuwait that use sunflower oil. All our competition uses palm oil, still. Because they are price sensitive, any change in oils will affect their margins. It would be hard for them to come and chase us and switch to a higher oil later on. We get all our popcorn from the US because the US is the country to go to for popcorn. It is the landmark of corn. All our machinery for popcorn comes from the US as well. We took the best machineries in each segment and brought them to Kuwait. When it comes to popcorn, we are the first ones in the GCC to have a popcorn kettle line and use kettle corn. Usually, here in Kuwait, they only air pop the corn and then at a later stage they spray it with oil to add flavor. Usually, they only go with salted products. The product is not the same as kettle corn in the States. It is truly different. When packaging our products, we use nitrogen gas. We do not use any preservatives, so we take all the oxygen out of the bags and nitrogen flush that to keep the popcorn and chips fresh and crisp. We went all in when it comes to bringing a good product to the market. In terms of the packaging, we did a tour in the UK from a big marketing company. We wanted the European feel. Looking at agencies in Kuwait, we could not get this European feel in our bags. Our potatoes come mostly from Germany and we use the best potatoes out there. We use two varieties of potatoes in the factory: Lady Rosetta and Lady Claire due to their sugar content. If you take a normal potato from your kitchen and fry it, the first thing that happens is that it goes brown because of the high sugar content and dry matter. Potatoes have a lot of water. Not just any potato is a good potato for chips. We have two seasons of potatoes. We have potatoes coming from India half of the season and the other half of the season the potatoes come from Europe due to the climate situation. We use France and Switzerland for our main flavors. I see us as a European company but located in Kuwait. When it comes to our people, we have the expertise needed to run the factory. Our head factory manager comes from England, and he worked in the biggest companies of chips and popcorn manufacturing in England. So, we really brought the best of the best to run the Ferrari of machines. We did not split any expenses when it comes to having good quality products.

What products do you offer at Hectare’s?

Looking at our product range, we tried to listen and see what people wanted in Kuwait. When we first started, we learned that people really wanted a healthy product for their kids. We used to go to a lot of carnivals and events and the main questions we would get were if our products are non-GMO, gluten free, or MSG free. At the beginning, we did not know what that was. Later on, we talked to our suppliers, and it turned out that all our corn is GMO free and naturally gluten free as well. Then, when we looked at our products, I saw that we met the criteria of being a healthy snack without even labeling the product as such. It was something that was already there, but management had not focused on that yet. We decided to put those labels on the packs because we are what we claim to be, and we wanted people to see it for themselves. Most of our products are gluten free, GMO free, and MSG free. Our Chairman’s main goal is to never put MSG in the factory, and we try to avoid it. When developing new flavors later on, that was something especially difficult to convince our flavor companies to give us something MSG free. What they usually do is give us a flavor with MSG, then have us taste it, we fall in love with it, then when they remove the MSG, it becomes a totally new product. A lot of these people still are not convinced of the health benefits of MSG free, non-GMO, or gluten free. We put this as our number one concern and for any new products or previous products, everything was changed to be non-GMO, gluten free, and MSG free.

Are you seeing the Kuwaiti customer becoming more conscious of what they are eating?

We do see that as a trend now. The Kuwaiti population is quite young. A lot of them are going out and traveling abroad. They are more health conscious. I see that especially in the younger women in their 20s who have just gotten married, had a baby. I see them really being health conscious when it comes to what they feed their kids. We want to be health conscious, but we want to have a product that is good. You can see a lot of products that say they are baked, GMO free, gluten free, MSG free, but when you go and taste the product it tastes like cardboard. So, we really want a product that tastes good and have the customer come back again. Our product is expensive compared to other products. So, whenever a mom, a dad, a teen comes and opens my bag, I want him to come again because once you open a bag of chips, you will be hooked. That was the main focus of having the best of the best flavors. We try address all the complaints we have from flavor being too strong to not strong enough. That is the point of communication between us and our customers. We listen to their needs and adapt.

What are your plans for introducing new products, such as vegan products, low sodium products, etc.?

In the snacks market, every day we get a new invention and a new product. I go to almost all the shows and see the new innovations like popped chips which is where you put rice under extreme pressure and you get popped chips rather than fried chips. It is not only getting the product that is healthy, you want the product that really tastes good. That is the extreme challenge we have because now we have expanded into the kids range and we have entered into the corn extruded snacks. We did something with sunflower oil that has not been done before. We use real cheese. For the pellet range, they are all gluten free, MSG free, and GMO free. We try to make new products for the target segment. For our new venture for the next year, we will be focused mostly on our meat products. Hopefully, in two months’ time, the factory will start running. The most challenging thing will be to get really healthy meat products. We set the bar high when it comes to our Hectare’s chips and popcorn, so we have to do the same when it comes to the meat side as well.

What are your expansion plans within the region?

We built our factory here in Kuwait and we did the lines here to satisfy about 90% of the GCC market. Whenever the sales team tells me that production is not keeping up with demand, I can adjust. It is like a plug and play system. We rebuilt the infrastructure of the factory to be able to expand that within two months’ time – a month’s time of shipping and another month of installation. We can have the line up and running as fast as possible. It would be feasible at a later stage to have many factories across the GCC area. Whenever you have a conflict within each country, trade routes are blocked suddenly, and we really get affected. With many factories across the GCC we can cater to each country. Whatever happens to a specific country, the neighboring countries can assist them. Having a mini version of our existing factory in each country and having Kuwait as the main backbone to these small factories is a good vision to have for the near future.

Are you planning on expanding outside of the region, for example, into Europe, Asia, Africa, etc.?

Our dream is to expand above and beyond the GCC. But, when it comes to kettle chips and kettle corn, we know it is going to be a hard market to enter internationally. When the meat side comes in, having halal certified meat is a good backbone to have outside Kuwait. Building on that backbone, we can later use the chips and popcorn line for the US or the UK segments. Having a family name behind the brand means that outside Kuwait in the Arab world people will have more belief in the halal aspect of it and buy the product.

What is your vision for the company in the medium term, three years’ time?

We want to be the leaders in our segment, and I think we are going there. Our chips taste as good as the European chips in Kuwait. We really had a big impact on the kettle and popcorns that are imported. Penetrating the upper market of the coops will be our main target in the next three years. Once we put the bar up high, we can only stay there and there is no use entering the market and starting to fight over who does the best promotion, etc. Being in different segments in that category will help our brand equity and help us to introduce new products at the same level. In any expansion, whether it comes with the meat or any other snacks expansion, we want to be in a different segment rather than to follow the competition. It is always better to have the competition follow us in our innovations rather than us following them. When it comes to the meat side, Kuwait lacks good manufacturers of processed foods and meats. The companies that are here have stayed stagnant. They are happy with what they have. The innovation that they have is based on the local knowledge of what nice pastrami feels like or what a nice turkey sandwich feels like. They have been stuck in the same palate that they have had for the past 40 years, and they are happy with that. But when it comes to us, I want to bring the European and the American taste back to Kuwait. That is what we did in the chip segment and people really enjoyed the new flavors like sweet chili or coconut vanilla or cheese or balsamic vinegar. People are prone to learn about new flavors, but you have to go the extra mile and have people taste new products so they can fall in love with them. The challenge we face is getting a consumer to go and buy the new product off the shelf. We had a lot of in store tastings, we sent a lot of boxes to friends and family, and word of mouth is our strength. That is how the success story of Hectare’s began. The more you give out for people to try and taste, the more impact you will have. People will not go and spend $1 on new chips that they have never tasted rather than going and buying 10 packs of the chips that they usually buy. Looking at Kuwait’s demography and population sizes, the future is with Hectare’s because all the teens are going pro Hectare’s, I see Hectare’s in all the universities, I see all the new moms giving their children Hectare’s as a snack product. It is something we like to live up to by having something that our consumers will believe and trust. The company is built on foodservice first of all. When it comes to the meat side, we are going to be the first foodservice company in Kuwait to cater to the big franchises and all the machines are certified by them. We chose all the best machines out there. Most are German machines when it comes to the meat factory. We are also going to go into distribution of chicken as well. But the main focus of the meat segment for the factory will be on the retail segment and business to business.

What inspires you? What drives you to do what you do?

The first inspiration I have is our Chairman, my dad, Mr. Muntaser Jassim Al Wazzan. He really went above and beyond in starting a factory. For us, coming to work every day and getting the knowledge from such a role model really is inspiring because to get into an industry with no background in manufacturing, whatsoever, and to get the intel and insight of what he went through the past 35 years running two or three production facilities really gives us the upper hand. It is really nice to come every day and see what he is thinking. He has the best poker face of any man I have ever seen so it is hard to try to meet his expectations. But not everybody has the chance to have a father figure and at the same time a friend figure to guide you through these experiences, whether it is building a meat factory or a chips factory. To take all this money and spend it on a chip factory or a popcorn factory and not knowing if it will work really takes guts. It is nice to learn from him because it really takes courage to invest a big portion of your net worth in an idea, a concept, especially here in the Middle East. Nobody had ever heard of a kettle popcorn in Kuwait for the past 15 years and to bring a new concept here and introduce it to the market and see the people fall in love with it is really breathtaking. At Hectare’s, we do not like to call ourselves managers or CEOs; we are partners, one family here. We all do everything, whether I am going to the market in the morning and helping the sales force or whether I am in the factory chatting with the sales production team or whether I am in storage. We barely stay in the offices. Another part of our inspiration is the people and the support we have. It is really nice when people hold a bag of Hectare’s on the beach, and you see them by coincidence and talking to them and chatting to them really brings a smile to our faces. There is no greater joy than to see your customers actually enjoying your products by themselves without having the push of you telling them what to buy or what to taste. It is like seeing a butterfly in its natural habitat. This is especially true when I go to the market and go see our shelf space and interact with the customers there and they tell me how good our products are and how they did not believe that somebody can do such a product here in Kuwait.

Where did the name Hectare’s come from?

The name Hectare’s comes from a unit of measurement that farmers use when they plant their fields. When we used to go to suppliers and ask them about potatoes, they used to always introduce their farms as 100 hectares or 1000 hectares. The same happened when we went to our corn suppliers. So, we took the name because it really is a symbol of where our raw material comes from – the farmers.

For more information, please visit: www.hectareskw.com.

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