According to research by the alternative asset management firm Al Masah Capital, the GCC foodservice market would grow by 8% a year to reach US$ 29.3 billion by 2020, up from US$ 21.5 billion in 2016. The main drivers behind the outperformance are two: the emerging middle class and the international and new domestic players on the retail market. The overall food consumption in the region in 2016 would go beyond 48.1 million metric tonnes, three metric tonnes more than it was three years ago.
The GCC region has been working hard to establish a strong brand identity in the foodservice sector. The researchers expect that the tendency would continue in the next couple of years. The 25 million tourists coming along for the Dubai Expo 2020 and the rapid development of the local food-related brands would facilitate that.
Furthermore, the regional private equity investors would also play an essential role in the process. Despite the current economic situation, they prefer to diversify their portfolio and move the focus to food services as the market is less volatile. For instance, the restaurant segment marked a growth of 6% CAGR, while the cafes and bakeries reported 7.5% CAGR.
According to the researchers, the decrease in oil prices and the diversifications strategies of the investors were among the main drivers for growth in the food sector.
In addition to that, the GCC’s GDP’s growth would increase from US$ 1.35 trillion to US$ 1.9 trillion by 2021, meaning a significant portion of it goes to the food service providers.Furthermore, the governments in the region have been actively investing in the hospitality industry in the past decades. Therefore, the GCC has quickly turned into a promising hub for the big players in the hotel industry. Ultimately, it also positively affected the food service businesses.
As for the future trends, the report noted that the demand for healthy and organic food would increase in time. That is mainly due to the sharp increase in diabetes and obesity in the GCC. The media outlets and the government also perform campaigns to promote a healthy lifestyle among the population. Many restaurants started amending their menus to offer different food options.
The data has revealed that the UAE’s foodservice market’s size of US$6.7 billion is the biggest in the region. The food sector in Kuwait is also snowballing in the past years, and it is expected to reach US$ 2.05 billion by 2020. It is also worth mentioning that Oman’s food sector is witnessing a remarkable growth now, with many restaurants and franchising entering the country.