Exceptional, July – December 2015
Dr. Ata Atmar, Bateel: Dates with a difference
How do you turn the humble date into a global gourmet brand? Dr. Ata Atmar explains the secret of Bateel’s phenomenal growth.
Jumeirah Beach Road is one of Dubai’s most elegant avenues. Among its swish villas, malls and boutiques, Town Centre is one of the more understated shopping addresses. Upstairs, Café Bateel is bustling with mid-morning activity as a waitress brings coffee and the company’s Managing Director, Dr. Ata Atmar, settles down to tell the story of how he created a luxury brand.
A life-size replica camel and a luxury car adorn the entrance to a neighboring restaurant. The elegant chairs and tables in the company’s signature green and brown colors set the tone of Café Bateel’s overall ambience, which also extends into the surrounding outdoor seating area.
The shelves carry an abundance of freshly baked cakes, chocolates, croissants and, most importantly, Bateel’s dates.
These are no ordinary dates, though. In addition to plain dates in a variety of shapes and sizes, there are dates filled with roasted or caramelized nuts, or, for more exotic flavor fusions, with candied ginger, lemon or orange peel. There are dates coated in Belgian chocolate, not to mention date cookies, date jams and even date mustard. Everything is beautifully packaged, making the products ideal gifts for feasts and holidays.
Bateel’s owner, Ziad Al Sudairi, spent the 1980s building up property, automotive and other businesses under the umbrella of his investment vehicle, Badrahn Enterprise.
Atmar had arrived in Saudi Arabia in 1983 to work as a consultant to the finance ministry and the private sector, and in 1989, Al Sudairi asked him to help build Bateel and devise a strategy to market dates — a standard commodity in supermarkets — as a premium product.
Atmar, who is now 65, was born in Afghanistan but left at the age of 16. He spent the next 20 years of his life in the US, initially studying economics and gaining a PhD from Clark University in Massachusetts. He became a Professor of Economics at Stonehill College near Boston and married an Irish-Italian woman from that city. “I am an economist,” he says. “I became a businessman in the course of developing the Bateel brand. Economics is a profession where you can apply the basic principles to any business.”
Dates grown in Saudi Arabia are of very high quality. Although there are more than 400 established date varieties in the kingdom, Bateel grows only 20 of the finest at its farm in Al Ghat, 250km north of Riyadh. Bateel established its first “gourmet boutique” in the Saudi capital. As it grew, the company opened outlets in 15 countries around the world, from Jakarta to London.
In 2007, it opened its first café in Dubai, followed by several more in the UAE and one in Saudi Arabia. Today, Bateel has 70 retail outlets that include gourmet boutiques, cafés and duty-free shops. These are located mainly in the Middle East, but the company also has a presence in Europe and Asia, and one location in Africa.
Atmar realized Bateel’s potential about 10 years ago. “It was a homegrown brand with international standing that everybody could relate to,” he says, “so I slowly gave up my other jobs. Now, I am fully devoted to this one.”
As the business grew, Bateel decided to branch out. “Once you have a luxury shop, you cannot survive on dates alone,” Atmar says.
Today, dates make up a quarter of the business, but Bateel is also moving into other gourmet products like chocolate, cakes and fine dining. It sources pasta from Italy, all the ingredients for its bread and croissants come from France, and it selects products from seven coffee companies. The policy is to supply boutique stores, which operate on a franchise model, with in-house products, while retaining control over the café brand.
“We like to own the cafés ourselves, as they require a lot of attention,” Atmar explains. “If they go out on franchise, it will kill the brand.”
Bateel also had a marketing problem. “We produced dates, but the problem was the production process. Product differentiation was needed to make the Bateel brand [stand out]. We needed to find a marketing platform.”
Opportunities for growth
Bateel had used its own funds to grow until five years ago, when it started drawing on bank finance. Then, in January 2015, the solution to the marketing problem emerged: L Capital, the private equity arm of luxury brand LVMH, bought a stake in Bateel. As well as providing finance, L Capital has an advisory role, with a seat on the board.
Atmar drove a hard bargain. “It took a lot of negotiations,” he says. “We wanted to make sure we got the finance and all the benefits that come from such a fantastic company and iconic brand. It took a year and a half. If we find that, in three years’ time, we need more money to grow, we would be happy for LVMH to increase their stake.”
Atmar has big plans to expand the business. “We have only penetrated 20% of the market in the Gulf. Some 80% is still there for us, and our plan is to conquer the entire Gulf market. In the next two to three years, we will go to Kuwait, Qatar and Oman. There is a tremendous growth opportunity in a market where the brand awareness is already there.”
He cites impressive figures of 27% growth in Q1 2015 compared with a year earlier and annual growth of about 25% in 2014. “We need to grow fast,” he explains. “We have invested a lot in infrastructure, with a 70,000m2 production factory and a 10,000m2 manufacturing plant. All these are assets that need to be leveraged. We have plenty of growth potential without building another big factory.
“We want to triple the revenue in the next five years; 100% growth within three years is achievable.”
Conquering the Chinese and US markets is a longer-term task. “In both those markets, we need to go in with a lot of finance to establish a market presence that is large enough to enable us to compete,” Atmar says. “China is a market we are looking at very seriously. We want to build the management bandwidth that allows us to do that.”
He was surprised to find awareness of the brand in India, where he recently attended an L Capital conference, and to learn that Bateel figures prominently in Japanese guidebooks. “I sometimes get 10 Bateel gift boxes in Ramadan from people who don’t know I am associated with the company!” he adds.
“The concept we have produced did not exist before. Vertical integration of farming, processing and manufacturing has given us total control over the supply chain. We have created a new category of premium casual dining — five-star food quality at four-star prices. We are affordable luxury.
“When you have a premium brand, you have to be premium in all aspects: higher wages, better training and proper monitoring of quality and execution,” he concludes.
“Once you define your brand, you want to be the best. Whether it’s raw materials, the people you employ or your products, there is no magic wand. It’s about authenticity, quality and innovation.”