Mubasher: Saudi Arabia and the UAE were the largest food consumption centres in the Gulf region, according to Al Masah Capital special review report on the GCC food services sector released on Wednesday.
The two countries combined were home to nearly 77% of the overall GCC population in 2015, the per capita food consumption in the region averaged at 851.9 kg in 2012, with Kuwait recording the highest levels, followed by Saudi Arabia and the UAE.
Food services sector in the GCC has been rapidly growing over the past decade on the back of a flourishing economy, booming tourism, favourable demographics, rising urbanization and a sturdy rise in per capita income.
The sector appeals to consumers across a broad income and cultural spectrum, including locals, expatriates and visiting tourists from all over the world.
Over the past decade, this demand has been well supported by the entry of several international fast food, casual dining and health food restaurants in the region.
As per Euromonitor International, UAE ranked amongst the top 20 countries in the world in the food service markets worldwide in 2015, and grew around 56.3% at current prices between 2010 and 2015.
Consumer food services in the UAE reached AED 52,399 million ($14,266 million) in 2015 from AED 33,534 million ($9,130 million) in 2010.
Major changes in work and life styles as well as changes in the consumption patterns have led to increase in frequency of people eating outside their homes.
Additionally, rising obesity rates and related lifestyle diseases coupled with growing health awareness and a developing taste for a westernized diet, introduced by the increasing expatriate population, are bringing about a change in the region’s dietary habits, creating demand for organic and international foods, the report indicated.
In-line with the healthy eating trend, food service operators are increasing their focus on locally sourced ingredients and are continuously developing innovative set-ups to make the art of food eating experience more appealing.
Fast food or Quick Service Restaurants (QSR) remained the largest segment, accounting for 58.2% ($11.7 billion) of the GCC food services market in 2015, followed by Full Service Restaurant (FSR) with 31.5% market share ($6.3 billion), while Café and Bakery segment had a 10.3% share ($2.1 billion).
With the growing cultural diversity and greater recognition and preference for branded products, international chains perceive tremendous growth potential in this region.
Chained and specialist coffee shops are growing in popularity and exhibited strong growth during the last 3 years.
However, despite an ostensibly bright future, shortage of skilled staff, high real estate and manpower costs, and inadequate supply chain infrastructure are some of the key roadblocks that have plagued the industry’s development over the years.
High dependence on food imports, high rentals and occupancy costs and increase in competition has resulted in a tough environment where only the absolute professional and disciplined will flourish, the report concluded.
