A Guide on the UAE Food and Beverage Sector

by Zaara 05, Nov 2021

A Guide on the UAE Food and Beverage Sector

Food serves to be one of human life's essentials, without which life on earth is unlikely. Every nation on this planet has its way of preparing its food, which turns out to be distinctive from another country. Many commercial operations are carried out, such as restaurants, cafes and hotels, holding the food as an ultimate foundation. It is a well-known reality that one of the popular foreign tourist hubs turns out to be the UAE. The market for food and drink has reached a paradigm shift along with the rising population.

The retail sales for apparel, white goods, footwear have been diminishing on a global front and replaced by the food and beverage industry. The United Arab Emirates ranks first in the minds of investors and company owners when it comes to business integration. This guide is for passionate people who hold the mentality of dreaming big and are looking forward to investing in the F&B sector in the UAE or starting a company.

It will also give you an in-depth understanding of the F&B industry, and the business opportunities it has so that you can start a business in Dubai.

Food and Beverage Sector in the UAE

Like the other business sectors in the UAE, the UAE has also concentrated on creating a perfect forum for the food and beverage industry. The government has taken several measures to uplift the sector and has initiated the most favourable steps that have made the sector its mark. There are many reasons for investing in the food and beverage industry in the UAE. Below are some of the outlines of the Food and Beverage Industry in Dubai:

The United Arab Emirates, if we regard it internationally, is one of the leading markets in terms of consumer spending on eating habits. From 2017 to 2026, the average annual growth is forecast at 7.3 per cent.

You can see that household spending has been rising steadily and projected to increase by 2026 at an exponential rate. Even in terms of consumer spending, the UAE market is one of the most lucrative markets. If we study it in detail, we can see that a few parameters guide the entire F&B industry. Let's take a step forward and take a look at the fundamental variable.

Drivers of Food and Beverage Sector in the UAE

The food and beverage sector stands as one of the world's most productive markets. The following points are the main drivers for the industry when it comes to the United Arab Emirates zone.

  • A demographics-the high degree of youth presence
  • Elevated growth in GDP
  • Strong per-capita GDP
  • A multicultural framework
  • A dedicated destination for visitors
  • Continuous progress in the tourism, retail and hospitality sectors
  • The high demand for F&B products for fitness, lifestyle and luxury-related products
  • The extensive, demand for competition
  • Shows and Activities
  • Expo 2020 upcoming

The UAE has a population of more than 200 different nationalities with different cultural values and tastes of food. Below are some of the dominant cuisines that dominate the UAE food and beverage sector:

        Top Cuisines in the UAE

     Contribution to the Industry

Arabic

57%

Indian

57%

Italian

52%

Japanese

48%

American

53%

 

Now, you need to have a clear understanding of different cuisines you can concentrate on. However, being a business investor in this field, you need to have a clear account of the region's prevailing market scenario.

When it comes to competition with GCC countries, the UAE has set a benchmark. The MENA region has researched to understand the potential that the F&B market holds.

You can see that the industry is grabbing a huge market. Company owners and professionals dealing with the food business in Dubai now have full flexibility to choose from any of the options available. Let's have a look at the market options you should take advantage of.

Food Business Options in Dubai

Here are some of the highly used market choices highlighted:

  • Hotels, restaurants and cafés
  • School canteens and hospitals
  • Bakeries
  • Butchery
  • The Truck with Food
  • Catering Units for Food
  • Warehouses and Food Factories
  • Manufacturers of food packaging products and suppliers

As you are now aware of the numerous business opportunities that are open to you, let's take a step forward and consider how an SME, national and foreign company contributes to the F & B industry's entire ecosystem.

If it is a small, medium or large-sized food company, at every stage, it has a corresponding role to play. Starting a restaurant in Dubai is one of the leading business choices most business owners prefer. Alternatively, you need to get a license if you want to deal with processed foods. Click here to learn more about registration for packaged food.

How to Set up a Restaurant or Cafeteria in Dubai?

To set up a restaurant company in Dubai, you need to pursue the below-listed proceedings.

1. Obtaining Licences for Food and Business

First and foremost, you need to issue a trading licence issued by the authorities concerned. Now, you need to hold two forms of charges when starting a restaurant business: a food licence and a trade licence. It will be provided by the Department of Food and Safety when it comes to the food licence, while the DED will issue the trade licence. To carry out the process in a trouble-free manner, you need to make sure to request the necessary documents.

2. Choose a Strategic Position

It turns out to be necessary to move onto the next stage of selecting a suitable location for your company once you receive the respective permits. It is essential to remember that when your target audience is available, you can open your restaurant. If your restaurant is not available, it will pose problems to select a place at random. As the region has various choices, such as Mainland, Free Zone and Offshore, Dubai offers the full versatility to choose the best venue.

3. Draft The Business Strategy

Now, proper implementation will only take place if you have a handy strategy that will allow you to concentrate better. You need to have an appropriate idea of various aspects before starting the process of setting up your restaurant in Dubai, and adequate preparation needs to be outlined. The company's growth is an integral part of the complete process. While drafting a blueprint for your company, you need to take a holistic view.

4. Get an Estimation of the Cost.

As mentioned above, at the initial stage itself, you need to consider financial planning. The second choice that most food lovers prefer when it comes to business integration is a food truck company, which is mobile and at a lower cost.

How to Set up a Food Truck Business in Dubai?

You need to go through the following measures to continue with the food truck business:

1. Submission of the Company Plan to the DED

The food truck company also requires substantial approval by the DED, much like the restaurant business. Also, licenses obtained from the Dubai Municipality, the Roads and Transport Authority (RTA), the Dubai Electricity and Water Authority (DEWA). Your business plan must be accepted by all possible parties to continue.

2. Select a Suitable Contractor and Get a Truck

In the next step, you need to buy a truck where the business operations performed. At the same time, according to the regulations set out by the Dubai Municipality, you must employ a fit-out contractor to build the vehicle (DM). You need to send a copy of the layout to the municipality until it is finished. Another notable point is that only ready-made items are permitted to be sold in the food truck industry by your company.

3. Obtain HACCP Approval (Hazard Analysis Critical Control Point)

It is essential to take the utmost care when it comes to the kitchen where the food is cooked and packed. Both your kitchen and truck need to receive permission from the respective authorities. If you do not have your kitchen, you need to apply an arrangement between the investor and the central kitchen. Now, in this situation, the permit is given on the kitchen's behalf. Obtaining a certification from HACCP ensures that the product served is secure.

4.Obtain your licence

You need to receive your food truck licence from the respective authorities after applying for the above criteria. As you can carry out the tasks legally, this food truck permit will stand as a passport for your company.

5. Pick the Best Location

You need to pick a perfect place for your company until you apply for the above criteria. Initially, it is best to evaluate the market and then choose an appropriate location based on your intended audience.

Dubai's food processing sector is the next business segment.

Food Manufacturing Sector in Dubai

When it comes to the food manufacturing sector, the business owners and investors have got the flexibility to select from any of the following categories:

  • Natural (Organic) Food Manufacturing
  • Baby Food Manufacturing
  • Cereal Food Manufacturing
  • Flavours and Fragrances Manufacturing
  • Ice Manufacturing
  • Poultry Products Manufacturing
  • Meat Products Manufacturing
  • Lime Manufacturing

Before you move ahead towards the manufacturing activity, there are absolute essentials to be met as per the guidelines of the Dubai Municipality.

Essential Criteria to be Met

  • Dedicated building plans
  • Requirements for proper lighting and ventilation
  • Adequate plumbing and sewage disposal system
  • Required food production equipment

Streamlined Operation of F&B Manufacturing Industry

There is a confident presence of distinct departments in the food and beverage manufacturing sector to smooth the production process.

Food Trading Company in Dubai

You have a wide range of choices about the items that you can initiate your business activities when it comes to food trading.

How Can a Food Trading Business Launch in the UAE?

You need to follow a specific process in sequential order, as shown below, to start the food trading business process in Dubai:

1. Decide the Trade Name and Receive the Initial DED Approval

The first and foremost task is to search the business name for your venture. Now, there are clear rules specified by the Government of Emirates when it comes to naming, which you need to adhere to. If the name is not fitting, the Department of Economic Development (DED) has the full authority to decline the approval of a trading name. You need to make sure that the DED receives initial support so that you can concentrate on the other processes.

2. Draft and Sign the Documentation from the Dubai Notary Public

The Memorandum and Articles of Association are one of the primary business documents that must be submitted to complete the process of company incorporation in Dubai. Once drafted, they need to be signed by the Dubai Public Notary.

3. Get your Physical Space

Next, you need to make sure that you have physical space for your business. When it comes to getting involved in the business process, the selection of physical space turns out to be an essential step. Once you get an office or warehouse for rent, you need to get the Ejari tenancy contract.

4. Send the Documents to DED and Obtain the Payment Voucher

After complete attestation, the entire collection of documents sent to the DED. Make sure the payment voucher from the DED is received.

5. Send the Documents from Dubai Municipality-Food Management Section

When dealing with the food company, you need to receive approval from the Municipality of Dubai, for which you must request a full collection of approval documents.

6. Acquire a Licence and Initiate Business Operations

You can carry out the appropriate business operations once you obtain the proper business licence. The licencing serves as a legal permit that gives you the green light to proceed to carry out the company activities. Therefore, you have a complete idea of the business of trading.

Critical areas of Cost Saving for your Food Company

You should have an idea about the distribution of the costs that will take place in the complete phase before you start a company. The main areas where you need to distribute your investment are listed below.

You can see that a general idea about the expense that needs to happen is illustrated in the graph described above. The variation now occurs in the choice of the zone, company agency, target audience, etc. It is recommended to go ahead with the expert consultants to work it out deep down for your business. Next, let's look at the essential criteria that will exceed the standards of the food and beverage industry.

Expo 2020 and Its Impact on Food and Beverage Industry

The world has been waiting continuously for the World Expo 2020, which will take place on the grounds of Dubai, UAE. The event will take place over six months and is projected to draw the interest of 25 million visitors. At the same time, for different business markets, the event would place itself as a game-changer. When it comes to the targeted industries, the food and beverage sector tops the list. KPMG has researched the effect of the Expo on the F&B industry. Below, you can take a glance at the highlights.

You can see that there is an industry-related continuous growth forecast, which means it is one of the lucrative investment platforms. Investing in the F&B market today will bring profitable returns for your company.

The region of the UAE is a solely lucrative destination for the food and beverage industry; we may conclude. There are a vast number of possibilities that occur in the UAE under the umbrella of company incorporation. Coping with the initial phases is one of the most critical components, as the country has to comply with legal laws and regulations. The inclusion of even a slight fault could result in the business proceedings cancelled. Company investors and owners tend to go forward with competent business consultants who are seasoned and possess the expertise of the industry to escape such unnecessary circumstances.

In offering the best business setup strategies, business integration consultants such as Commitbiz Consultants take the utmost care. We take care of all your company needs right from the integration process to the creation of crucial foundations such as finding an office room, accounting, taxes, product marketing and legal proceedings. Our experts are well-versed in the whole process and have tailor-made solutions to suit your business needs. Do have a word with our experts if you are looking forward to setting up your business in Dubai. Contact us today, and we'd be happy to support.

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