Trends and Opportunities in the UAE Food and Beverage Market

by Zaara 04, Mar 2022

Trends and Opportunities in the UAE Food and Beverage Market

The United Arab Emirates, with the help of a growing number of visitors, continues to lead the food and beverage sector in the Middle East region. In particular, the country and Dubai continue to attract foreign and home-grown F&B products. Food and beverage is the country's second-largest industry, significant in general for the local UAE, across the GCC, and the region’s large-scale economic growth and diversification.

 

With the Dubai Expo 2020 and other global occasions in the country, despite the fierce rivalry in the F&B sector of the UAE, there should be reasons for a positive attitude as the nation continues to develop as a tourist destination.

Food and Beverage Market in the UAE

With increasingly discerning buyers, the F&B market in the UAE is exceptionally competitive. Some F&B companies have been forced to make difficult decisions, for instance, to close poorer performing outlets, albeit much-needed, and some have exited brands that failed in the regional market. In contrast, restaurants have worked to advance a few aspects of their operations over the last few years. It seems like this might be the time for them to take a 360-degree look at their company: from the relevance of the concept in the market to organisational agility, to support function efficiency and results-driven financial monitoring.

In the UAE, growth in per capita incomes and population has contributed to increased food and beverage products. While many categories such as fruits, vegetables, cereals, coffee have experienced historical growth in sales, Halal meat, green tea, and fresh coffee, maybe some types with high potential. There has also been developed in the speciality organic food market, which could be a potential business opportunity.

Strength

  • It is projected that the UAE economy will resist growth and remain stable.
  • In the area, the business climate is among the most favourable.
  • By Business Monitor International BMI, the UAE rated 70.4 in RRI (Risk/Reward Index) for the F&B market, above the world average of 50 points.
  • Due to the high buying power of F&B, the economy was able to absorb the impact of VAT on the food industry.
  • For MGR majors, a large youth population signifies a substantial economic resource. 49.2 percent of people are young adults in the Emirates.
  • The UAE remains the most attractive food and beverage market in the country. Investors, and the only nation in the country to rank BMI RRI in the top 10 markets worldwide (placed in the sixth position out of 107 countries)
  • Rising demand for luxury goods and health food is resisting high disposable income.
  • Focusing on the growth of the halal sector by government authorities and working on the establishment of halal standards
  • An emerging field of online F&B distribution that has demonstrated strong demand
  • The nation is now more than 80% self-sufficient in milk and nearly 40% self-sufficient in its demand for eggs.
  • The UAE continues to endorse projects for organic farming.

Trends

  • Changing consumer taste and preference
  • Food safety, transparency and sustainability
  • The rising cost and increased uncertainty
  • Innovation and differentiation
  • Mergers and Acquisition
  • Food Sales - Estimated growth in food sales of 4.6 per cent in 2019 and an average compound growth rate of 6 per cent for 2019-2023.
  • In 2019, sales of beverages will rise by 6.9 per cent and in 2019-2022 at an average compound rate of 6 per cent.
  • The primary driver of growth in the food industry in the UAE will remain the preference for quality food, with the increase of health awareness also a key trend.
  • Dairy Sales - As dairy demand increases in line with more advanced consumer tastes, dairy sales will experience strong growth, growing at a CAGR of 6.9 per cent.
  • Baked Food - Baked items are expected to hit a CAGR of 7.1 per cent in sales over the years to 2022 in the Emirates. The growing adoption of diversified consumption designs will drive this.

Opportunities

  • In recent years, the food processing industry in the UAE has experienced a phase of substantial expansion. This trend is expected to continue as foreign investment and government efforts to improve domestic food production and self-sufficiency, production facilities have begun to emerge and diversify.
  • Value-added Dairy Products
  • The high level of milk consumption in the UAE enables major regional players to join the market.
  • Per capita consumption of dairy produces high, at around 80- 85kg yearly, and this lucrative industry is extremely vibrant and competitive, with many dairies in service.
  • Opportunities for growth in value-added milk products such as yoghurt, butter and cheese
  • Growth in food services (restaurants) - With a diverse population and a demand for different brands, the food services industry has expanded to become a significant industry in the UAE, with more than 16,000 outlets and shopping centres.

Business in the F&B Sector

Here are some of the highly used market choices highlighted:

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

It has a corresponding role to play at every stage, whether it is a small, medium or large-sized food company. Starting a restaurant in Dubai is one of the vital business choices that most business owners choose. Alternatively, you must get it documented if you decide to deal with processed foods. You need to know a few things before starting your company in the F&B sector before going in-depth.

The UAE acts as an immense base for the food and beverage industry and helps business owners to succeed in this industry in their business establishments. When dealing with the integration process at the initial beginning, it could turn out to be dangerous. Company owners, investors, and entrepreneurs tend to assist business advisors who are well-versed in the business establishment process to wave off such challenges and direct you accordingly.

At Commitbiz, we take the initiative to consider our client company’s needs and satisfy the requirements accordingly. Our business experts can manage the incorporation process while you focus on the planning part of your venture. Please contact us today to combine the food and beverage industry-we'd be happy to assist.

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