Ramadan is a time for families and friends to come together and celebrate over a meal after sundown. And that is big business for food retailers.

With families often serving as many as three meals a night after the daily fast, food consumption can as much as double in the holy month, retailers say. During Ramadan last year, UAE residents spent US$441 million (Dh1.61bn) on food, according to AC Nielsen. That was a 27 per cent increase on Ramadan 2007, which was already 21 per cent higher than 2006, the research firm says. Sales figures for specific items show the scope of business food retailers do during Ramadan.

Vimto, a popular fruit cordial and the main drink in the UAE with which to break fasts, sold about 20 million bottles last year, with 80 per cent of those sales made over four months near and during Ramadan, according to Clayton Buckley, the vice president of marketing for the drink's producer, Aujan. Tang, an orange-flavoured powdered drink also used to break the day-long fast, sells the equivalent of about 76 million glasses in the holy month in the UAE alone, says Paul O'Neill, Tang's category marketing manager for powdered beverages in the GCC.

About 40 per cent of Tang's total annual sales take place in the month before and during Ramadan, Mr O'Neill says. Across the Gulf, the total is close to 700 million glasses, he says. While retailers in the UAE have seen sales of items from clothing to cars fall so far this year by as much as 40 per cent, food is one segment that has been resilient, but not immune. Based on sales in the months before Ramadan in September last year, and in the run-up to the holy month this year, people are simply not buying as much food, says Shubhagato Bhattacharjee, the head of retail measurement services with Nielsen, based in Dubai.

"Food consumption has been slowing down ? and as a result of this, Ramadan 2009 may not show such prolific growth as did Ramadan 2008," Mr Bhattacharjee says. Comparing food sales between December last year and May this year to the six months between July and November last year, when the economic downturn began to bite in the UAE, sales continued to rise but at a much slower rate, he says. Food sales overall rose just 0.3 per cent, while total beverage sales were 6.8 per cent lower, according to Nielsen.

Sales of dairy products were up just 2.3 per cent, while sales of impulse foods such as biscuits were up 9.7 per cent. Purchases of staples such as rice and beans were up 4.8 per cent while infant and baby-related foods were down 3.7 per cent. But food retailers are optimistic. Lulu hypermarkets have seen a 15 per cent rise in food sales compared with Ramadan last year, says V Nandakumar, the corporate communications manager at Emke Group, which runs the supermarkets.

"The usual food products are doing brisk business, and there are a lot of Ramadan promotions going on," Mr Nandakumar says. Aujan, which is based in Saudi Arabia, is looking at 5 per cent sales growth this year, Mr Buckley says. But overall, the company is expecting to have sales roughly 20 per cent higher than last year, he says. "The consumer offtake has exceeded our expectations for 2009," he says. "We're not seeing the impact of the economic crisis on Vimto."

Aujan has had to adjust its strategy, however. While being the go-to drink during Ramadan is an enviable position, it also has its drawbacks. Mr Buckley says that as Ramadan was 12 days earlier this year, the holy month overlaps the summer holiday period, which affects buying behaviour. "Consumers normally go away in July and August," he says. "Next year, Ramadan overlays in July and August. What are consumers going to do? Are they going to stay with their families, and not travel? Are they going to experience Ramadan outside of their home countries? We need to understand the impact of that."

Mr Buckley says Aujan has increased its supply of Vimto by 20 per cent to parts of Egypt, such as Sharm el Sheikh and Alexandria, where Saudis and other GCC residents are expected to spend their holidays. Aujan has also turned its focus to Lebanon, he says. "We didn't want them to experience Ramadan without it." So, as consumers moved, "we took our product and brought it to them." Aujan has also increased its advertising budget by 10 per cent, partly to benefit from extremely low advertising rates, Mr Buckley says.

The competition has increased efforts as well. Supermarkets have launched their own home label versions of the popular fruit cordial, and other beverage makers such as Tang have aggressively marketed in Ramadan, he says, though according to Mr Buckley this has had little impact. "What we know is our volume is better than last year; what we don't know is how the market has moved," he says. Tang is expecting sales growth of more than 10 per cent growth over last year, Mr O'Neill says. It would be a good performance but not as robust a performance as last year's.

The GCC is the third-largest market for Tang, just behind Brazil and Mexico. To stay competitive, Tang has increased its marketing budget and paid for more TV advertising during the popular Ramadan shows. Mr O'Neill acknowledges that customers who are watching their wallets more closely may be trading down to cheaper alternatives. "I have no doubt it will happen but this year we are ahead of expectations," he says. "We're expecting double-digit growth and there doesn't seem to be a huge trend right now that people are leaving Tang in droves.

"People have to eat, people have to drink. So it might be something that you will continue to buy on a weekly basis. You might change brands to try to save a couple of dirhams. But at the end of the day, it's only a couple of dirhams. "We're not as open to the economic downturn as some of the larger purchases some people can make." aligaya@thenational.ae