AIR Group Limited, the world’s largest producer of shisha molasses and owner of the famous Al Fakher brand, has released new research on the role of shisha in microbusinesses such as bars and cafés in the Middle East, Europe, and the United States. The study involved comprehensive interviews with bar, restaurant, and café owners and managers in key markets, including the UAE, Saudi Arabia, Germany, Spain, and the US.
Shisha as a High Margin Product
Approximately 80% of the businesses surveyed identified shisha as their highest margin product. Ronan Barry, Chief Corporate Affairs Officer of AIR Group, stated, “This highlights that shisha ranks among the most fairly distributed fast-moving consumer goods (FMCGs) globally.” In most FMCG categories, the majority of the value accrues to the brand owner, with only scraps left for the broader value chain. In shisha, however, the value is distributed more equitably, with the lion’s share going to the smallest businesses that serve the consumer experience.”
Shisha’s Economic Impact on Hospitality Venues
“We have long suspected that shisha is the Most Valuable Player (MVP) in the hospitality sector. These businesses enjoy margins on shisha of up to 95%, compared to about 5% on average in food,” he added. This insight highlights the significant financial impact shisha has on the profitability of these establishments.
Dependence on Shisha for Business Survival
There are over a hundred thousand hospitality venues serving shisha, and according to AIR’s survey, if these businesses did not serve shisha, their survival would be in doubt. Almost half of the respondents indicated they would close their doors without it. Garth Beer, who oversees a shisha catering business serving numerous establishments, remarked, “Shisha is vital for attracting customers to a venue and ensuring they stay longer.” In some cases, it’s ‘come for the shisha, stay for the food,’ while in others, it’s ‘come for the food, stay for a shisha.’ The after-dinner shisha can be the difference between a profitable table and a non-profitable one.”
Challenges in Traditional Shisha Service
Nevertheless, the growth of shisha services is still out of reach for many bars and restaurants because of the reliance on charcoal to heat the molasses and produce smoke. Charcoal poses a fire hazard and produces toxic chemicals, requiring significant investments in safety and ventilation.
Introducing the OOKA System
AIR’s innovative charcoal-free, pod-based shisha system allows more microbusinesses to enjoy shisha services without these concerns. OOKA has already been embraced by nearly 250 bars and restaurants in Germany and the UAE, reflecting its growing popularity in the hospitality sector.
Positive Feedback from Venues
Mario, General Manager of a premium nightclub in Dubai, remarked, “We regrettably had to exclude shisha due to smoke and fire safety concerns, even though guests have asked for it. Since introducing OOKA, the feedback from our customers has been fantastic. We’re on track for a record season, and it’s clear that OOKA will be a major contributor.” This sentiment underscores the demand for shisha in upscale venues and the potential for increased revenue through innovative solutions like OOKA.
Commitment to Collaboration
AIR will continue to work with hospitality businesses worldwide to support them in adopting shisha and OOKA while providing training for their staff to ensure a top-tier customer experience. This commitment to collaboration highlights AIR’s dedication to fostering success within the microbusiness community.
