GCC’s growing food and beverage market: An opportunity for entrepreneurs and investors?

The food and beverage (F&B) industry in the GCC region is a powerhouse that continues to grow and evolve, offering opportunities for entrepreneurs and investors alike. The industry in our region is expected to reach a market value of USD 94bn this year, with projections suggesting it will hit USD 128bn by 2029.

In this article, we will explore the current state of the GCC’s F&B industry, its potential trajectory over the coming decade, the drivers behind this growth, and where the key opportunities lie.

What’s driving the GCC F&B industry?

The F&B industry in the GCC is driven by a combination of factors, including a growing population, increasing tourism, and changing consumer preferences. Currently, it contributes significantly to the region’s overall economy while aligning with many of the GCC’s overall goals to further diversify from oil-based economies.

Here are some of the key drivers:

• Sustainability:?Sustainability is gaining prominence, with consumers and businesses alike showing a growing interest in eco-friendly practices and sourcing. Local sourcing and reducing food waste have become important aspects of the industry, aligning with the wider future plans of GCC countries.

• Diverse consumer base:?This has led to a demand for a wide range of cuisines and dining experiences, from traditional Arabic food to international fast-food chains. With even greater ease of movement between GCC countries now possible thanks to the Unified Tourist Visa, visitor numbers are likely to increase, with food tourism playing a growing role in that trend.

• Digital transformation:?The F&B industry in the GCC has witnessed a significant digital transformation, with the proliferation of food delivery apps and online reservations. This trend is expected to continue, making it essential for businesses to have a strong online presence. AI-powered menu customisation, augmented reality dining experiences, and efficient supply chain management will all play a greater role.

• Health and wellness:?Health-conscious consumers are driving a shift towards healthier food options. This trend is reflected in the rise of organic and low-fat products and the increasing popularity of fitness-focused dining establishments.

Entrepreneurial and investment focus

Entrepreneurs and investors are presented with a myriad of opportunities within the dynamic landscape of the GCC F&B industry.

• Restaurant concepts:?The GCC’s diverse population and robust consumer base create an environment ripe for inventive restaurant concepts. Entrepreneurs can tap into the market by introducing niche and fusion cuisines, catering to the diverse tastes prevalent in the region.

• Food tech:?Investing in food technology is a promising venture, encompassing areas such as food delivery platforms, restaurant management software, and kitchen automation solutions. As the demand for convenient and tech-savvy solutions continues to rise, entrepreneurs can capitalise on this trend by contributing to the evolution of the industry’s technological landscape.

• Sustainability initiatives:?Entrepreneurs can carve a niche by focusing on sustainability initiatives within the F&B industry. This includes adopting environmentally friendly practices, such as sourcing organic ingredients and implementing strategies to reduce waste. By aligning with the growing demand for eco-conscious choices, businesses can not only contribute to environmental well-being but also attract a conscientious consumer base. These changes in the F&B sector are seen as part of the GCC’s overall commitment to sustainability, actively contributing to the UN Sustainable Development Goals (UN SDGs) and adhering to the principles of COP28 to be held in Dubai this month.

• Supporting services:?Opportunities extend beyond the core F&B sector, encompassing supporting services such as logistics, packaging, and food safety. Entrepreneurs and investors can explore these ancillary services, recognising that a well-organised and efficient support system is integral to the overall success of the food and beverage ecosystem.

The UAE F&B industry – deep dive

The UAE has emerged as a thriving hub for the food and beverage industry, experiencing exponential growth over the past few decades and making it a prominent contributor to the nation’s economy. Tourism plays a significant role in this, as the UAE welcomes millions of visitors each year. The country’s commitment to hosting international events has also accelerated this growth.

Dubai, in particular, is renowned for its dining experiences, hosting a wide array of Michelin-starred restaurants, celebrity chefs, and innovative culinary concepts. Within the MENA region, the UAE secured sixth place in total consumer spending on food and non-alcoholic beverages and is the leader in the Middle East’s F&B market. It’s estimated that by the end of this year, F&B revenue for the country will reach USD 38bn.

Several planned initiatives and investments in the food sector will help advance food safety, sustainability, and infrastructure in the future. One example is the new digital platform aimed at promoting investments and opportunities within the UAE’s F&B industry. This initiative is part of the country’s strategic efforts to stimulate growth, attract investments, enhance trade opportunities, and fulfil its objectives for food security. The platform will link a variety of stakeholders, including investors, manufacturers, trade partners, and financial institutions, and aims to onboard 300 UAE companies by the end of 2023.

Saudi Arabia F&B industry – deep dive

The Saudi Arabia F&B market is valued at USD 28bn in 2023. The industry plays a pivotal role in fostering tourism with the country’s rich gastronomic heritage, coupled with the allure of modern culinary experiences, attracting both domestic and international food enthusiasts.

Investment opportunities in Saudi Arabia’s F&B industry extend beyond traditional eateries. The advent of food technology has seen a surge in investments in delivery platforms, restaurant management software, and sustainable practices. The nation’s commitment to Vision 2030, which includes economic diversification and the promotion of a healthier lifestyle, further assists this upward trajectory. Meanwhile, the government is seeking to boost food manufacturing localisation and bring in more female industry leadership as part of their National Industrial Strategy.

Saudi Arabia’s F&B market exhibits real innovation, with entrepreneurs exploring various avenues to cater to the diverse preferences of locals and the country’s many visitors. This includes services outside the actual production and serving of food and beverages. One notable area is restaurant design, with creatives in Saudi Arabia pushing the boundaries to bring customers more captivating, innovative F&B spaces.

Conclusion

The F&B industry in the GCC is set for remarkable growth over the next decade, with diverse opportunities for entrepreneurs and investors. Key trends, such as sustainability initiatives and digital transformation, will shape the industry’s future. While the UAE and Saudi Arabia stand out as major players, other GCC nations will also play a significant role. Across the GCC, entrepreneurs and investors can consider not only direct involvement in the industry but also supporting services to capitalise on this flourishing sector.