22 Feb

Food and beverage trends: Assessing the appetite of the UAE market

The momentum behind the UAE’s food and beverage market has been building for some time. Thanks to the steady growth over the years, by 2018, fresh and packaged food sales had already totalled USD 13.5 bn. In the years since, government food strategy, an affluent and diverse population, and a demanding appetite for new cuisine have sent this growth into overdrive.

Today, revenues in the UAE’s food industry alone stand at USD 37.9 bn. And as the UAE enhances its reputation as a global culinary capital, intricate tasting menus, sustainable produce and free-from foods are taking centre stage.

For ambitious entrepreneurs, the potential opportunity is enormous. So, if you’re ready to take it, keep reading to find out the best way to enter this vast and growing market.

A look inside the UAE food and beverage market

The UAE has taken great strides to diversify its economy in recent years. As a result, the country’s food and beverage industry is one of its fastest-growing, ranking sixth in the MENA region for total consumer spending.

Closer to home in the Middle East, the UAE market leads the way, thanks to rising disposable incomes, increasing visitor numbers and a growing, diverse population. By 2025, per capita spending in the UAE food and beverage industry is expected to reach USD 3,900. Within this large and growing market, several trends are driving rising revenues.

The emergence of the Emirates as a culinary capital is bringing top chefs from around the world to open new eateries and grab attention with unique and blockbuster menus. These luxury fine dining experiences are marketed heavily to tourists, and with UAE visitor numbers expected to exceed 30 million per year for the forseeable future, demand has never been higher.

In the beverage industry, the non-alcoholic sector is also experiencing notable growth. In 2023, revenues are expected to reach USD 1.6 bn with annual growth of almost 3% up to 2027, primarily driven by a shift away from traditional high-sugar beverages in favour of healthier alternatives.

This is just one factor behind a growing demand for healthy, eco-friendly and free-from products that is set to be a major growth area in the coming years.

The UAE also remains a crucial market for global food imports, exports and re-exports.

Food and beverage trade exceeded USD 20 bn across the first three quarters of 2021. Imports accounted for around USD 12.8 bn of this figure, followed by exports (USD 4.1 bn) and re-exports (USD 3.3 bn). We can expect these numbers to increase as the UAE takes steps to diversify import sources and increase its focus on homegrown produce as part of its National Food Strategy 2051. By 2051, the initiative aims to take the UAE to the number one spot in the Global Food Security Index by providing support to enhance local production, increasing global partnerships and implementing resilient agricultural practices.

Opportunities in the UAE food and beverage sector

A greater focus on local agriculture presents a fantastic opportunity for anyone with the means to produce or assemble food and beverages ready for sale. This could mean farming or manufacturing from scratch, packing goods for local retail, selling to restaurants wholesale or preparing produce for export.

The National Food Strategy’s aim to diversify imports and forge new international trading relationships is also good news for those looking to source and re-export foodstuffs and beverages around the world.

Another area with significant growth potential is the luxury restaurant sector. The UAE’s fine dining scene is thriving, being home to 12 Michelin-starred eateries and with 18 ranked in MENA’s Top 50. As the sector continues to grow, so does the demand for more premium and exclusive foods and beverages – those who can source them will have no shortage of potential customers.

But perhaps the biggest opportunity in the UAE food and beverage market right now is in eco-friendly products and processes.

The UAE’s rulers have invested significantly in this area and will continue to do so as part of the National Food Strategy’s commitment to ‘sustainable food production through the use of modern technologies.’

This focus on sustainability and innovation is likely to generate further opportunities in areas such as vertical and hydroponic farming as well as in the production of crops tolerant to drought, heat and salt.

An increasing consumer appetite for eco-friendly options will also drive growth in this area. Greener options such as organic produce saw revenues of USD 34 m in 2020, and this sector is expected to achieve a compound annual growth rate of 9% by 2025.

This demand for greater sustainability stretches beyond food and beverages and into how they are packaged and consumed. The UAE plans to ban single-use plastic shopping bags by 2024 and plastic cups, plates and cutlery by 2026.

This move is indicative of shifting attitudes to waste and presents a significant opportunity for businesses that can source or manufacture greener alternatives. The opportunity also extends to sustainable food packaging and eco-friendly storage and shipment containers such as those made from wood, cardboard or bamboo.

Starting a food and beverage company in the UAE

The UAE sits firmly at the heart of the MENA region’s culinary and sustainability evolution. So, businesses out here are best placed to get ahead of market changes and seize the many opportunities on offer in the country’s thriving food and beverage industry.

If you want to know more about starting an F&B business in the UAE, our expert team at RAKEZ can help. We’ll guide you through every step of the process, from understanding the benefits of investment in Ras Al Khaimah to choosing and applying for your business license to obtaining all permits and approvals required to trade.

Contact RAKEZ today for a free company set-up consultation. Call +971 7 204 1111 or send an email to info@rakez.com.


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Last Updated on 12/29/2019 9:23:05 PM

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