The Statista Market Forecast depicts an optimistic outlook for the food and beverage or F&B industry in Gulf Cooperation Council (GCC) countries. The food market is expected to grow by 4.39 percent from 2024 to 2028; revenue could amount to $135.5 billion this year. The largest market segment, confectionery and snacks, could hit $23.10 billion.
This upward trend is driven by various factors, including population and tourism boom and changing consumer preferences.
Saudi Arabia and UAE’s F&B industry
According to a report by Alpen Capital, a Dubai-based investment banking firm, the GCC region’s food consumption is on the rise. Saudi Arabia, the United Arab Emirates (UAE), Bahrain, Kuwait, Oman and Qatar will consume 56.2 million metric tons of food by 2027. This underscores the expanding appetite in the region.
Saudi Arabia, currently the largest consumer in the GCC, is expected to see a marginal decrease in its market share, from 57.1 percent in 2022 to 55.5 percent in 2027. In contrast, the UAE could witness a slight increase in its share, from 18 percent to 18.5 percent.
The UAE boasts over 2,000 food and beverage manufacturing companies. A report from the UAE Food & Beverage Business Group forecasts robust growth in F&B manufacturing, projecting it to reach $23.2 billion by 2025. The UAE has also been actively investing in the food sector in recent years. Their goal is to enhance food safety, sustainability and infrastructure. A new digital platform is in the works to promote investments and opportunities in the UAE’s F&B industry.
Meanwhile, in Saudi Arabia, the F&B market was valued at $28 billion in 2023. It’s a key driver of tourism, blending rich culinary traditions with modern gastronomic experiences. Beyond traditional dining, there’s also a growing interest in food technology, delivery platforms and sustainability. All this aligns with Vision 2030’s economic diversification and healthier living goals.
Key growth drivers
According to Anantharaman Ramanathan, group director of finance at IFFCO Group, “The GCC Food Industry holds immense potential for growth and innovation due to its strategic location and the region’s burgeoning population.” IFFCO Group is a leading UAE-based manufacturer of mass-market food products.
“This unique combination creates a fertile ground for food businesses to thrive. Moreover, he added that consumers have a rising awareness of health and sustainability, which is reshaping their preferences and driving the industry towards healthier and more sustainable options,” he added.
Sustainability is gaining prominence, with consumers leaning toward healthier food choices and businesses prioritizing eco-friendly practices. Apart from this, here are the major growth drivers in the GCC’s F&B industry.
Favorable demographics
The growing population — comprising youth, working-class professionals and a high proportion of expatriates — continues to be a major driver for the GCC’s food sector. And thanks to this diverse consumer base, the region has also seen an increase in demand for a wider range of cuisines — from Arabic to international ones. Demand will continue to grow as the population across the GCC could reach 62.2 million by 2027. The approval of a unified visa is poised to help substantially as well.
Digital growth
The past years saw the region’s F&B market embrace digital transformation. Now, the market boasts significant use of food delivery apps and online reservation systems. Apart from these, the rise of artificial intelligence (AI) will also impact the landscape. Experts predict that AI-driven menu customization, augmented reality dining experiences and efficient supply chain management will all play vital roles in the industry’s growth.
Government support
GCC governments are also taking extensive measures to enhance food security and production — particularly by optimizing logistics and boosting investments in the industry. For instance, Saudi Arabia is investing around 7 percent of its industrial sector funding, totaling over SAR94 billion, in food manufacturing to bolster self-sufficiency. Several GCC countries have also introduced policy reforms and initiated long-term strategies. For example, the UAE’s National Strategy for Food Security aims to lead in the Global Food Security Index by 2051.
Opportunities for entrepreneurs and investors
The F&B industry in the region continues to thrive — and it boasts several opportunities for entrepreneurs and investors alike.
Thanks to the region’s vast population and diverse consumer profile, businesses can introduce restaurant concepts catering to various preferences. There’s ample room for traditional cuisines, global offerings, unique fusion concepts, and niche gastronomic experiences.
Those more inclined to the digital side of the market can invest more in food technology, ranging from delivery platforms to management tools. As the demand for food grows, there’s a need for tech-driven solutions to attain efficiency. And as sustainability is placed at the forefront, people can also champion various healthy and eco-friendly initiatives. These include sourcing organic ingredients and reducing waste.
Beyond the core F&B sector, ancillary services such as logistics, packaging and food safety offer additional avenues for innovation.
Read: IMF warns of food security threat from fragmented commodity markets
Challenges to tackle
While opportunities for growth are there, challenges remain. The Alpen Capital report cited global economic downturns and geopolitical conflicts. The tensions, in particular, could further heighten inflation, negatively impact food security and disrupt supply chains. Another far-reaching consequence is agricultural and environmental degradation.
Speaking of environmental concerns, the GCC region has also been particularly facing aridity, high temperatures, limited rainfall and scarce non-renewable groundwater resources. This makes traditional agriculture challenging.
With limited arable land, the GCC nations heavily rely on food imports. The recent pandemic further underscored this concern about food insecurity. According to recent figures, over 85 percent of the region’s food requirements are imported. This reliance on imports exposes the GCC to global price fluctuations and inflationary pressures due to supply chain disruptions.
Final thoughts
The GCC’s F&B industry offers promising opportunities for growth and innovation. With a rising population, digital transformation, and government support, entrepreneurs and investors have fertile grounds to explore. However, the market also needs to address global conflicts and environmental constraints.
Now, as the industry continues to evolve, the need to embrace technological advancements and sustainability practices becomes even more essential. These strategies are both vital for the F&B market’s success in the long run.
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