UAE Food and Beverage Sector Set for Robust Growth at 17% CAGR

Strong Growth in the UAE Food and Beverage Sector

The UAE food and beverage (F&B) market is projected to expand significantly, growing at a compound annual growth rate (CAGR) of 17.09% by 2029. A JLL report indicates that the sector is expected to grow from $19.98 billion (AED 73.36 billion) in 2023 to $43.98 billion (AED 161.37 billion) by 2029. The growth is supported by a strong economy, a competitive environment, and a booming tourism industry enabling 3% GDP growth in 2023 and projected growth of 4% and 5% in 2024 and 2025 respectively. 

Economic and Demographic Drivers

Several factors contribute to the UAE F&B market expansion, including favorable government regulations, strong economic fundamentals and a growing multicultural consumer base. JLL’s research highlights how these elements, combined with a dynamic demographic in newly developed areas of Dubai and Abu Dhabi, have led to the sector’s increased performance. Economic growth is further boosted by the plans of the Dubai government to invest AED 25 Billion (USD 6.8 Billion) towards new initiatives.

Diverse Culinary Landscape and Consumer Preferences

The UAE’s F&B sector reflects the country’s economic growth offering a wide range of culinary options from fast food to fine dining and specialty coffee. This diversity aligns with the sector’s commitment to personalized dining experiences further strengthening its position as a global culinary powerhouse. Additionally, the rise of homegrown food concepts reflects the UAE’s strategic focus on diversification.

Geographic Expansion and Urban Development

In Dubai, the development of areas such as City Walk, Dubai Hills and Dubai Creek has significantly strengthened the city’s foodservice market. Abu Dhabi’s foodservice growth is tied to its tourism boom and increased demand in residential and commercial developments, including Saadiyat Island and Yas Island. These locations have become focal points for new attractions and vibrant dining experiences. 

Research Konnection is a leading market research company in the UAE. Contact us at hello@researchkonnection.com for F&B research and setups. 

Shift in Dining Preferences

Fast food remains a dominant segment in both Dubai and Abu Dhabi, capturing around 36% and 35% of the market, respectively, in the first half of 2023. Fine dining has experienced remarkable growth, particularly in Dubai, where the number of fine dining units grew by 20% in 2022 and an additional 8% in H1 2023. Abu Dhabi saw similar trends, with a 33% rise in fine dining units in 2022 and an 11% increase in H1 2023. Specialty coffee has also gained traction, with a 25% surge in new units in Dubai and a 12% rise in Abu Dhabi during the same period.

Sustainability and Health-Driven Choices

As consumers become more health-conscious and environmentally aware, brands that emphasize sustainability and food transparency are gaining popularity. UAE consumers are increasingly interested in where their food comes from and the environmental impact of their choices. This focus on health and ethical values, along with a demand for personalized dining experiences, has shifted the competitive dynamics of the F&B market.

Homegrown Concepts Leading Global Recognition

The success of homegrown food concepts in the UAE is elevating the country’s culinary reputation on the global stage. These innovative foodservice offerings, often aligned with consumer demand for meaningful experiences and community connections, reflect the UAE’s evolving and expanding food culture.