The United Arab Emirates continues to lead the Food and Beverage market in the Middle East region, assisted by an increasing number of tourists. The country and Dubai, in particular, continue to attract international and home-grown F&B brands. The Food and Beverage is the second-largest sector in the country, important generally for the local UAE, across the GCC, as well as for the area which is enduring large-scale economic development and diversification.
Despite the fierce competition in the UAE's F&B market, thanks to the Dubai Expo 2020 and other global occasions in the region should provide reasons for a positive outlook as the nation continues to change as a tourist destination.
Food and Beverage Market in the UAE
The F&B market in the UAE is exceptionally dynamic, with progressively discerning customers. Some F&B companies have been forced to make tough— though much-needed—decisions, for example, to close poorer performing outlets, and some have exited brands which struggled in the regional market. While restauranteurs have worked to progress a few aspects of their operations over the last several years, it seems this may be the time for them to take a 360-degree look at their business: from the relevance of the concept in the market to operational agility, to support function efficiency, and result-driven financial monitoring.
Strength
- UAE economy is estimated to withstand growth and remain robust
- The business environment is among the most favourable in the area
- UAE scored 70.4 in RRI (Risk/Reward Index) for the F&B sector by Business Monitor International BMI, above the world average of 50 points
- The economy was able to absorb the effect of VAT in the food industry because of the high purchasing power for the F&B
- A large youth population signifies a significant economic resource for MGR majors. In the Emirates, 49.2% of the population are young adults
- The UAE remains the most attractive market in the region for food and beverages. investors, and is the region's only nation to score BMI RRI within the worldwide top 10 markets (placed in the sixth position out of 107 countries)
- High disposable income withstands increasing demand for premium products and health food
- A focus by the governmental authorities on the development of the halal sector and work on the establishment of halal standards
- An evolving online F&B delivery sector that has shown good demand
- The nation is now more than 80% self-sufficient for milk and almost 40% self-sufficient in its demand for eggs
- UAE continues to support organic farming initiatives
Growth Rate
- Food Sales - Growth of food sales projected at 4.6% in 2019 and an average compound growth rate of 6% for 2019-2023
- Beverages Sales - Beverages will grow by 6.9% in 2019 and at an average compound rate of 6% for 2019-2022
- Preference for Quality Food will remain the key driver of growth in the UAE's food sector, with the rise of health-consciousness also a key trend
- Dairy Sales - Dairy sales will experience strong development, rising at a CAGR of 6.9%, as dairy demand expands in line with more sophisticated customer preferences
- Baked Food - Baked products in the Emirates are projected to achieve a CAGR of 7.1% in sales over the years to 2022. This will be driven by the increasing adoption of diversified consumption designs
Opportunities
- A growing F&B processing industry - The UAE's food-processing industry has been undergoing a period of important expansion over the last few years; this trend is expected to continue as foreign investment and government efforts to increase domestic food production and self-sufficiency, production facilities have started to come up and diversify
- Value‐added dairy products –
- The UAE's high level of dairy consumption allows large regional players to enter the market
- Per capita consumption of dairy produces is high, at around 80- 85kg yearly and this profitable industry is extremely vibrant and competitive, with many dairies in operation
- Expansion opportunities in value-added dairy products such as yoghurt, butter and cheese
- Growth in food services(restaurants) - With a varied population and an appetite for diverse brands, the food services sector have developed to become a significant industry in the UAE, with over 16,000 outlets, and shopping centres
Business in the F&B Sector
Some of the highly availed business options are highlighted below:
- Restaurants, Hotels and Café
- Canteen in schools and hospitals
- Bakeries
- Butcheries
- Food Truck
- Food Catering Units
- Food Factories and Warehouses
- Food Packing Material Manufacturers and Suppliers
Be it a small, medium or large-sized food business; it has got a respective role to play at every point. One of the core business options that most business owners prefer is to start a restaurant in Dubai. Alternatively, if you want to deal with packaged foods, you need to get it registered. Before going in-depth, let us understand a few things you must know before starting your business in the F&B sector.
Food and Safety Requirement
In brief, critical requirements for all food and beverages imported into the UAE are:
- Food safety: before import, need pre-approval from the food control department of the UAE municipality of arrival. The approval permit should be attached to the shipment for customs clearance
- Labelling: need to indicate the dates of manufacture and expiration on the packaging and box in Arabic and English
- Restrictions: as noted above, the import of live pigs is prohibited; pork and pork products are considered particular goods, the import of which is released following approval of the competent authority (Ministry of Climate Change & Environment)
Labelling Requirements
Compliance with labelling requirements is one of the most challenging aspects for exporting to the UAE25. Labelling and adjoining explanatory statements for food must be provided in Arabic; where another language is used, it must be alongside the Arabic. Mandatory labelling of pre-packaged foods must include:
- product name
- a list of all ingredients declared in descending order of weight
- a list of food additives
- the name and address of the manufacturer and packer (in cases where the packer is not a manufacturer)
- date of production; and
- instructions for storage
For people unaware of the rules and regulation, this might seem a bit complicated process, but with business consultants like Commitbiz, your business in the UAE will be registered in a simple and hassle-free manner. Our experts are well-versed with the legal process and have years of experience in this field. Contact us today for more information.
The first part of the F&B Industry in Dubai is a bird's eye view on the market, growth, opportunities and a few requirements that everyone must be aware of before setting up a food business. Keep reading the second part to know anything and everything related to the Food and Beverage sector in the UAE.
