- August 4, 2021
- Posted by: Waqas Siddiqui
- Category: Business & Economy
UAE F&B Industry Market Outlook – 2021
The UAEs Food & Beverage (F&B) industry is one of the major contributors towards the country’s economy with revenues estimated at AED 86 billion ($23 billion) in 2020 and a CAGR of 5.5%. The UAE’s diverse and growing population combined with the strong purchasing power and consumer preference to dine out were some of the major contributing factors driving the growth of the F&B industry in the UAE.
Over decades, the country has attracted investors to invest in UAEs F&B industry thanks to strong growth potential and demand emanating from both retail and HORECA (Hotels, Restaurants & Catering) segments.
UAE F&B Market Potential
UAE is one of the most diverse countries in the world hosting more than 200 nationalities. According to a conservative estimate, the UAE has over 20,000 registered restaurants and cafés in the country with more than half of them in Dubai. The growth in the F&B sector has been driven by consumer appetite for a wide range of cuisines.
Post COVID-19 UAE F&B Industry Recovery
Statistics from the Federal Competitiveness and Statistics Centre (FCSC) published data suggesting that the F&B in UAE was one of the sectors that posted a significant growth rate in the post COVID scenario. The FCSC data shows increases in price indexes covering the seven sectors that constitute the UAE’s Consumer Price Index (CPI). The UAEs Food and Beverage sector recorded 107.57 points in May compared to 106.82 points in April for the year 2021. The FCSC also suggested that the demand for F&B sector in UAE will further increase in the coming years.
Increase in F&B e-Commerce Sales – UAE
During the pandemic, consumer behaviour saw a drastic change, with the majority of them preferring online orders over dining out. The online sales within the UAEs F&B sector surged in 2020 reaching a value of AED 1.5 billion (USD 412 million), recording a year-on-year growth rate of 255%. While the e-Commerce purchase value in the country has nearly doubled in recent years, supported by the Covid-led digital shift has changed consumer behaviours. Though the trends are back to normal with residents preferring to dine out, the demand for online F&B in UAE will still be on rise with its sales value expected to reach AED 2.2 billion (USD 619 million) by 2025, with an annual growth of 8.5% over the 2020-2025 period.
Read: UAE’s Food and Beverage e-Commerce presents investment opportunities
Investment Opportunities in UAE F&B Sector
Despite a global economic slowdown because of the pandemic, the UAEs F&B sector continues to perform better compared to other sectors. With Dubai being one of the first city to control and open up during the COVID19 pandemic and its efforts in cementing its position as a strategic re-export hub in the Middle East and Africa (MEA) region, the F&B sector is expected to witness further growth in the years to come. In addition, the overall expenditure on F&B products in the UAE is estimated to increase by 7% on an annual basis from AED 136 billion (USD 37 billion) in 2020 to AED 150 billion (USD 41 billion) by the end of 2025 making it a great destination for F&B related business investments.
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