Regenerative farming and food producer Wide Open Agriculture (ASX: WOA) has signed a deal with MKMI General Trading to have its Dirty Clean Food branded oat milk distributed across multiple territories in the Middle East.
MKMI is a leading distribution partner for the retail and food service sectors in the Middle East and has been recognised as a supplier of high quality, ethically produced foods from around the world.
Under the agreement, MKMI will become the exclusive distribution partner for sales, marketing and management of Dirty Clean Food’s OatUP within the United Arab Emirates (UAE), Saudi Arabia and Kuwait markets.
MKMI has committed to buy a minimum of $150,000 in product each year for the first two years.
Wide Open Agriculture has confirmed potential for additional purchases beyond this minimum amount and said MKMI is expecting strong interest and uptake from the region.
“Securing a distribution partner for the Gulf Cooperation Countries (GCC) demonstrates the international market appeal of our carbon-neutral oat milk products, and the company views these markets as robust growth levers, which are critical to gaining global market share,” the company stated.
Wide Open Agriculture will provide all technical information and materials necessary for MKMI to begin trade and retail marketing.
The first shipment of product is expected to be delivered to MKMI by February with initial sales anticipated within the first quarter of 2022.
Under the terms of the deal, Wide Open Agriculture has agreed to 24 months of exclusivity with MKMI from 3 December 2021.
The company will commence production of new flavours which will be made available to MKMI if desired. These flavours include Barista Oat Milk, Chocolate Oat Milk and Cold Brew Coffee Oat Milk.
Wide Open Agriculture said discussions with additional potential international distributors are “advancing”.
Today’s announcement follows the news in late November that Wide Open Agriculture had locked in a distribution deal with Woolworths (ASX: WOW) for the sale of its oat milk across Australia, and plans to raise $22 million to fund its Dirty Clean Food manufacturing and expansion strategy.
The Middle East alternative dairy market
According to a report by the British Centres of Business, the alternative dairy market in the Middle East is forecast to grow at a compound annual growth rate (CAGR) of 12.5% to reach $2.8 billion by 2026.
Consumers in the Middle East have shifted toward plant milk as a healthier alternative to dairy with sales in the UAE alone estimated to have increased by up to 50% in 2020.
Dirty Clean Food chief executive officer Jay Albany said the company is “thrilled” to enter the Middle East market and offer consumers premium regenerative products to meet the growing demand for healthier food and beverage options.
“We are well-positioned to gain a foothold in the GCC, which is home to some of the fastest growing economies in the world,” he said.
MKMI managing director Stephen Price said the two businesses aligned in terms of “providing the best premium and sustainable products across this diverse market”.