The future of the F&B industry in the Middle East (2024)

The Middle East’s F&B industry has currently entered a paradoxical state; while there is clear evidence of incredible year on year growth, which is undoubtedly a reason to celebrate, these results come tempered by a variety of challenges that have easily made the sector one of the region’s most cutthroat fields in which to operate. Abdul Kader Saadi, managing director and owner of Glee Hospitality Solutions shares his thoughts

Today, F&B operators inch forward with a mixture of caution and optimism toward a future that promises great rewards for those that can grasp the opportunities, while also weathering myriad difficulties.

Focusing on the UAE
According to the regional research company, The MENA Research Partners, the GCC’s F&B sector is expected to grow 7.1 percent annually to reach USD 196 billion by 2021, up from USD 130 billion today. In terms of percentage, Saudi Arabia alone accounts for over half of the market share, followed by the UAE, with 31 percent. If we are to analyze the regional F&B industry from a strategic standpoint, then we should first focus on Dubai, which is perceived as the metaphorical window, both in terms of favored market entry and the ideal entry point to secure one’s foothold in the sector. In layman’s terms, many F&B investors want to successfully establish themselves in the UAE first, before making a move into new territory. However, although the country is seen as a prestigious, regional gateway, this same mass demand has caused the UAE market to reach maturity in terms of the global and local players it hosts. The market is currently extremely competitive and arguably close to being highly saturated. In light of the current operating climate, it is essential that up and coming F&B concepts offer a unique angle and an exceptional experience across all areas of food, service and social media, alongside others, in order to ensure a competitive edge that will be needed to survive.

In addition, the UAE has invested heavily in several vast entertainment spaces that include Ferrari World, IMG and Dubai Parks & Resorts, which, although offering promising avenues, are still far from reaching maturity in terms of the positive impact they could have on the F&B sector.

In terms of demand, consumer habits have also evolved in the UAE over time, with the result that F&B investors are having to adapt their models to cater to a changing market. Technology is now an integral part of the customer experience, with delivery apps like Deliveroo, Carriage, UberEats and Zomato greatly increasing the delivery percentage of the overall business market for F&B operators. This, in turn, is forcing F&B investors to keep their operation models continuously updated and stay vigilant when it comes to market trends, in order to remain in the top tier of successful operating restaurants.

In terms of challenges, the UAE’s market conditions are currently extremely difficult, and have been so for between 18 months and two years, due to a variety of factors, which range from a problem of oversupply to shifts in consumer habits. In addition, although delivery apps are benefiting customers, the added costs to F&B operators, which can sometimes be as high as 30 percent, have created a negative ripple effect across the business.

RELATED CONTENT What’s On The Menu: The Latest UAE Dining Trends

To summarize, the major factors set to drive growth in the UAE’s F&B industry are surging demand for fast food, especially among the younger generation, the popularity of online ordering platforms and an expanding tourist base that will create demand for more outlets with a diverse cuisine.

The Saudi shift
With the lion’s share of the market, Saudi Arabia is moving to open up its broader hospitality and entertainment industry, on the back of recent economic and sociopolitical changes. The knock-on effect has resulted in first-time expenditure in activities and services, such as cinemas, and increased market confidence in hosting upcoming Disney and Marvel shows and events, in a focused attempt to increase domestic spending. It should be noted that entertainment development holds a prominent place in the Kingdom of Saudi Arabia’s Vision 2030, which is targeting increasing domestic household spending on cultural and entertainment activities from 2.9 percent to 6 percent, and recapturing part of the USD 30 billion spent outside the Kingdom on tourism and entertainment by Saudi citizens.

Eating habits in Saudi Arabia have also changed, alongside these paradigm shifts, with the majority of the population under the age of 30 abandoning previously institutionalized ‘social barriers’. These include the removal of family sections previously enforced in restaurants and outlets, with the result that people are going out more, effectively changing the social/dining dynamic. This, in turn, is creating new opportunities that were previously culturally off limits in the KSA market for investors to explore and tap into.

Standards on the rise in Egypt
Egypt is another major contender in the broader MENA F&B market that merits consideration when assessing the future of the regional industry. Due to the devaluation of its currency, the country has seen a sizeable influx of investment, which has resulted in a rise in standards across its F&B sector. Several homegrown concepts have moved to up their game on the domestic scene, spurred on by the arrival of international brands and chains that have entered the local market and successfully established themselves there.

Broad view
Going forward, the Middle East’s F&B market will continue to present challenges, although with projections indicating clear profits in the future, it undoubtedly still holds a lucrative attraction for potential F&B operators keen to make their mark in the region. However, there are key issues relating to evolving consumer trends and sociopolitical and economic factors that will require attention to ensure a concept meets the essential survival criteria of remaining relevant and competitive.

The future of the F&B industry in the Middle East (2024)


The future of the F&B industry in the Middle East? ›

According to Mordor Intelligence, highlighted in the whitepaper, the F&B sector is expected to expand to $43.98 billion by 2029, with a compound annual growth rate (CAGR) of 17.09%. This growth is attributed to a resilient tourism industry, a strong economy, and a competitive environment in the UAE.

What is the future of F&B? ›

Beyond the sheer market size, the sector is undergoing notable transformations influenced by dynamic consumer preferences, technological advancements, and a heightened emphasis on sustainability. As we approach 2024, F&B businesses must remain agile and align with these evolving trends.

What is the future of food service in Saudi Arabia? ›

The Saudi Arabian General Authority for Investment (SAGIA) forecasts that spending on food service will grow by 6% per annum over the next five years (far ahead of the overall population growth of 1.8%), with food consumption reaching SAR 221 billion (USD 59 billion) by 2021.

How big is the F&B market in Saudi Arabia? ›

Saudi Arabia's Food and Beverage (F&B) market is the largest and most attractive in the Middle East during 2018-19, valued at $45 billion.

What trends are on the rise in today's food and beverage industry? ›

Sustainable practices have become a top priority for both consumers and businesses in the food and beverage industry. From reducing food waste and adopting eco-friendly packaging to sourcing local and organic ingredients, there is a growing emphasis on environmental responsibility and ethical consumption.

What is the forecast for the food and beverage industry? ›

Total revenue in the Food & Drink market is projected to reach US$2.03bn in 2022. Total revenue is expected to show an annual growth rate (CAGR 2022-2027) of 11.38%, resulting in a projected market volume of US$3.80bn by 2027.

What is the next big thing in food industry? ›

Consumers shifting to alternative protein sources, including lab-grown food, is the most significant trend in the food industry. Further, the increased awareness of nutrition and health concerns during the pandemic drives the demand for nutraceuticals and personalized nutrition.

What industry is booming in Saudi? ›

Saudi Arabia's construction industry is rapidly growing with new trends and ambitious projects. It's now one of the fastest-growing construction markets in the world. The Saudi construction market is expected to be worth USD 70.33 billion in 2024 and is projected to increase to USD 91.36 billion by 2029.

What challenges will Saudi Arabia face in the future? ›

A nuclear-armed Iran would pose a substantial security challenge for Saudi Arabia. Iran in nuclear breakout mode would trigger a war with the United States and Israel, a war that Saudi Arabia could be pulled into as regional escalations spiral and its airspace is used by the allied campaign against Iran.

Is Saudi Arabia self sufficient in food? ›

Approximately 80% of Saudi Arabia's food is imported, however domestic production has been on the rise. In September 2023, the Government announced self-sufficiency had been reached for fresh dairy products and eggs, with sufficient excess for export.

What are the top 3 industries in Saudi Arabia? ›

Saudi Arabia: Economy
Economic TriviaSaudi Arabia is the world's largest petroleum exporter.
Top IndustriesCrude Oil Production; Petroleum Refining; Basic Petrochemicals; Ammonia
1 more row

What is the biggest F&B chain? ›

Key Takeaways. The largest restaurant companies worldwide are primarily international chains. Compass Group and Starbucks are the two largest restaurant companies as of June 2024. McDonald's is the largest fast-food chain.

What is the biggest F&B brand? ›

Nestlé is the largest food and beverage company globally, with headquarters in Switzerland. The company has been around since 1866 and operates in 191 countries worldwide.

What are the trends in the food industry in 2024? ›

The Rise of Plant-Based Foods in 2024

Plant-based foods are a fleeting trend and a fundamental shift in our eating habits. As 2024 approaches, we expect more plant-based options in supermarkets and restaurants.

What is the fastest growing food industry? ›

The DTC (direct-to-consumer) food segment is one of the fastest-growing sectors in this space. DTC brands cut out intermediary retailers. Which lets them capture more profit margin (and/or offer lower prices) than traditional players.

What are the three trends in the food industry? ›

In this blog post, we'll be covering some of the top trends, from the up and coming technology in the food and beverage industry to what today's consumers expect: Sustainable practices are continuing to be a top priority. Increased interest around healthier foods. The rise of plant-based diets.

What is the future of food industry? ›

The future of food should be sustainable, regenerative, and resilient. Achieving this takes leaders across industries to show courage and collaboration. Together with clients and alliances, Deloitte is helping to transform the food ecosystem.

What are the food beverage trends in 2024? ›

2024 is seeing a surge in health-focused consumers, prompting beverage brands across the board, from sugary sodas to premium wines, to rethink their offerings and introduce innovative, wellness-oriented products.

What is the future of ready to eat? ›

According to a report by Market Research Future, the global ready-to-eat food market is anticipated to witness substantial growth, reaching a CAGR of 7.2% from 2021 to 2027. A rising trend in the ready-to-eat food industry is the heightened consumer interest in healthier, natural options.

What is the future for fast food business? ›

What Is the Future of Fast Food? To keep up with trends and a high demand for quick service, the future of fast food looks very technological. Tech solutions like self-ordering kiosks and tableside devices will increase in popularity.

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