UAE food and beverage sector expected to grow 17% annually – News

The foodservice market in the UAE is expected to grow at a compound annual growth rate (CAGR) of 17.09 percent, according to a new study.

A white paper from JLL, titled “A Flavorful Journey: A Comprehensive Look at the Evolution and Trends in the UAE’s F&B Sector” cites figures from Mordor Intelligence which show that the country’s food and beverage (F&B) sector is expected to reach $43.98 billion by 2029 from $19.98 billion this year.

While a resilient tourism industry has driven this growth, the continued rise of the F&B sector has also benefited from a strong economy and competitive environment prevailing in the UAE, where GDP growth of 3% in 2023 is expected reach 4%. and five percent in 2024 and 2025, respectively. Government initiatives, favorable regulations and dynamic demographics, particularly in newly developed areas, have further strengthened the sector’s performance, particularly in Dubai and Abu Dhabi, the report said.

Kostas Papadakis, Head of Foodservice Consulting for MENA at JLL, said: “Driven by a surge in domestic and international tourism as well as a growing multicultural consumer base, the UAE F&B sector today reflects today not only economic growth, but also dynamics. culinary evolution. From the rapid expansion of fast food to the thriving fine dining scene to the rise of specialty coffee, the diversity and innovation of the UAE’s F&B offering highlights a market in tune with preferences consumers and global trends. Additionally, from the sector’s commitment to sustainability, personalized culinary experiences and the success of local concepts, it is clear that the country’s gastronomic landscape is becoming a global powerhouse, further strengthening the diversification strategy of the United Arab Emirates.

In Dubai, the expansion of inner areas, such as City Walk, Jumeirah 1, Dubai Investment Park, Dubai Hills and Dubai Creek, as well as the development of commercial, industrial and residential sectors in these areas have contributed significantly to strengthening path. of the city’s restaurant industry. On the other hand, the growth of the sector in Abu Dhabi stems from the thriving tourism industry and growing demand from residents of areas with new attractions and new entertainment concepts, such as the vibrant Al Mamsha promenade on the island of Saadiyat, the addition of Al Reem Mall and Reem Central Park on Al Reem Island and the Yas Bay waterfront on Yas Island.

In line with the growing importance of Dubai and Abu Dhabi in the region’s culinary scene and food culture, foodservice categories have also evolved in tandem with consumer demand. Fast food retained the largest market share in the first half of 2023 in Dubai and Abu Dhabi, accounting for approximately 36% and 35% of the restaurant market, respectively. The higher cost of living in Dubai compared to other cities influences residents’ culinary preferences, steering them towards more affordable dining options like fast food. In Abu Dhabi, the city’s rapidly expanding industrial zones, such as Musaffah, have spurred higher demand for this segment as its quick-service model meets the needs of busy workers looking for convenient meals during their work breaks .

The increased focus on convenience has also increased the popularity of the all-day dining, casual dining and fast food categories, with all-day dining in Dubai and Abu Dhabi seeing an annual increase of 40 percent and 30 percent in 2022, respectively, while the number of new fast-casual units in both cities jumped 40 percent during the same period.

Fine dining continues to expand, with Dubai seeing annual growth of almost 20% in 2022 and a further increase of 8% in the first half of 2023, as emerging areas become a hotspot for high-quality culinary experiences. Furthermore, the number of five-star hotels in Dubai also supports the growing landscape of the fine dining segment, as it increased from around 59,000 keys in 2021 to over 66,000 keys in 2023, a growth rate of 11% and representing approximately 43 percent of the total existing hotel stock. Similarly, Abu Dhabi saw a remarkable 33 percent annual increase in the number of new fine dining units in 2022 and a further increase of 11 percent in the first half of 2023. The expansion of areas previously renowned for their dining destinations Fast and casual dining, such as Yas Island, to sophisticated fine dining destinations are a prime example of this growth.

The growing preference for specialty coffee and high-quality brews has led to a steady increase in the number of new Refuel and Relax units in Dubai, with a sharp increase of 25 percent in 2022, while Abu Dhabi saw a moderate increase of 12 percent in the same period. period.

As consumers become more informed and emphasize the importance of health, wellness and sustainability, they are increasingly inclined to turn to F&B brands that align with their values environmental and ethical. Food transparency has become a strategic differentiator in the UAE’s competitive food and beverage market, with increased attention paid to the origin of ingredients and the environmental impact of food choices. Personalized culinary experiences where chefs can showcase their talent and share their stories, knowledge and passion for their craft are also gaining momentum.

Consumers are increasingly seeking meaningful experiences, and new dining concepts provide opportunities to connect and develop a sense of community, bringing together individuals with similar interests and values. Furthermore, the explosion of local concepts in the UAE culinary landscape in recent years and their subsequent success in international markets further enhances the reputation of the country’s culinary offerings on the global stage.