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GCC F&B Sector: Trends & Outlook

UAE F&B market report

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14 views26 pages

GCC F&B Sector: Trends & Outlook

UAE F&B market report

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h.wael
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
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You are on page 1/ 26

September 2021

GCC Food &


Beverage Sector
Industry to rebound from COVID-19
impact aided by new business models

Research Highlights:
The report examines the F & B market in GCC countries including prospects
for the sector, estimated market growth and market size and online ordering
trends. The report also discusses the COVID-19 impact and evolving
technological advancements that are redefining the F&B landscape

www.marmoremena.com
2

Table of Contents
CHAPTER 1 CHAPTER 7
07 Executive Summary 34 Global vs Local Players: Who will win?

CHAPTER 8
09
CHAPTER 2 37 High rentals: Will it spoil the party?
Industry Overview
CHAPTER 9
CHAPTER 3 40
12 Will Cloud Kitchen trend heads
Country Overview
up in GCC?
CHAPTER 4 CHAPTER 10
26 Top Trends in F&B industry 42
Who is buying whom? M&A deals in
F&B Space
CHAPTER 5
29 Online ordering & Takeaway: A key CHAPTER 11
44 Hurdles: The usual and the unusual
business segment
suspects
CHAPTER 6
33 Immunity Boosting Products – Will CHAPTER 12
45 Success story: Talabat Case Study
the rising trend last long?

Spearheading Actionable Middle East Research Since 2006 | www.marmoremena.com | Published Research, Consulting & Customized Services
3

List of Tables

Table 2.1 Restaurants types and key features Table 7.2 Regional QSR and Café chains in GCC

Country-wise Mobile Subscription & Total Retail Space & Expected Deliveries
Table 4.1 Table 8.1
Internet Penetration in million square meters
Key Players and Revenue Estimates Table 10.1 M&A Deals in F&B Sector in GCC
Table 5.1
(2020)

Table 5.2 Social Media Indicators Table 12.1 Talabat’s Timeline

Table 7.1 Portfolio of family owned Franchises Table 12.2 Talabat Key Information

Spearheading Actionable Middle East Research Since 2006 | www.marmoremena.com | Published Research, Consulting & Customized Services
4

List of Figures

Figure 2.1 GCC F&B Structure UAE Revenue from Operations


Figure 3.7
Forecast (in USD Millions)
Figure 2.2 GCC Nations GDP Per Capita Average Sales per Outlet - Kuwait
Figure 3.8
(USD)
KSA Average Estimated Sales per
Figure 3.1
Outlet, 2020 (USD ‘000s)
Kuwait F&B Revenue Estimates (in
Figure 3.9
USD Millions)
Figure 3.2 Aggregate Food Outlets in KSA

KSA Revenue from Operations Kuwait F&B Revenue Forecast (in USD
Figure 3.3 Figure 3.10
Estimates (in USD Millions) Millions)

KSA F&B Revenue Forecast (in USD Figure 3.11 Average Sales per outlet (USD ‘000s)
Figure 3.4
Millions)
Oman F&B Revenue Estimates (in
Average Sales per Outlet – UAE (USD Figure 3.12
Figure 3.5 USD Millions)
‘000s)

UAE F&B Revenue Estimates (in USD Oman F&B Revenue Forecast (in USD
Figure 3.6 Figure 3.13
Millions) Millions)

Spearheading Actionable Middle East Research Since 2006 | www.marmoremena.com | Published Research, Consulting & Customized Services
5

List of Figures

Figure 3.14 Total Food Service Outlets in Qatar GCC Rental Rates change in
Figure 8.1
percentage
Qatar F&B Sales Forecast (in USD
Figure 3.15
Millions) Figure 8.2 Retail Vacancy in Major GCC Cities
Figure 4.1 Global Food Chain Outlets

Unit Economies of Food Delivering Figure 10.1 Mergers & Acquisition in GCC nations
Figure 5.1
Companies in MENA region
GCC Rental Rates change in
Figure 8.1
percentage

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6

Executive Summary
The food & beverage industry is one of the promising sectors in the GCC region and has shown a strong appetite for growth
for a longer period. The Covid-19 pandemic has led to a severe downfall in the industry growth and reduced the demand for
people’s spending. The industry is one among the most affected by Covid-19 due to lockdowns, travel restrictions and social
distancing. The dine-in spending in the region also stands affected. The F&B industry in GCC is different from other regions
where high number of expatriates and young generation define the growth path for the industry. The emerging online culture
of the young, tech-savvy population has pushed the foodservice operators to evolve and adapt. It has become necessary for
businesses to meet the diversified demands of the people. UAE and the Kingdom of Saudi Arabia are the key regions that
contribute to the industry growth and has become pioneers in industry transformation. The region has many global and local
players meeting the rich and varied demands of the consumer market. Chief among the reasons for changing eating patterns
in the region is the emergence of Quick Service Restaurants (QSR) chains such as KFC, Burger King, Pizza Hut and regional
outlets like Herfy, ChicKing that provides high quality foods at an affordable price in faster service. The ongoing pandemic has
changed the behavioural pattern of eating out and the food restaurants are adjusting their business to cloud kitchen and
online delivery to meet the new trends.

The industry has changed its face since the Covid-19 pandemic. Online food ordering and delivery platforms have changed
the way people consume food. The innovation of technology has given power to the consumers to get their favourite foods in
a few minute’s time. Travel restriction and social distancing further fuelled the growth of online ordering platforms. Players
like Talabat, Zomato, FoodonClick have helped businesses to transform operationally to meet the evolving trends. Talabat has
clocked over 4 million monthly visits in April 2021 and average daily orders on an average exceeds 100,000. New business
models like cloud kitchen and Kitchen-as-a-Service model have encouraged all restaurants to meet the increased demand.
Overall, the future outlook for the Food & Beverage industry is expected to be stable. While increasing awareness of health
and convenience of online food ordering could drive market growth.

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7

Executive Summary
The industry has a wide variety of players from local and overseas. The major QSR share is held by food chains like Herfy,
McDonalds, KFC, Burger King, Pizza Hut and Subway. These six franchises alone have over 2,700 food outlets in the GCC
region. Americana group operates the majority of the franchise chains in the region such as KFC, Hardee’s Krispy Kreme.

The GCC region imports majority of the meat from outside the region and they mostly import meat from Asian and South
American countries. The industry has a certifying body for checking the quality of the meat. International Halal Accreditation
Forum launched in 2016 with 10 founding members has over 35 countries as members now. This body encourages and
facilitates the adoption and implementation of natural standards for food quality.

High supply of retail places has impacted the rental prices. The rental rates have reached the upper level and were falling for
the past few years. The top cities like Dubai, Abu Dhabi, Riyadh and Jeddah are expected to add 1.08 million square meters of
retail space in 2021 in addition to the existing space of 11.6 million square meters. Property owners are offering deep
discounts and offers for attracting and retaining the tenants. The rental rates have fallen approximately 8% in those four cities
in 2020.

In addition to rental rates, the foodservice operators are face challenges in the implementation of Value Added Tax (VAT) for
the products. The implementation of tax is triggered by low oil prices and as a measure to diversify the country’s income
sources. The introduction of VAT may likely impact the consumer’s purchase but it is unlikely to stay hindrance for the long term.

GCC region also benefits from higher living standards that will encourage high consumer spending. Consumers are also
becoming highly selective in their product preferences, comparing quality and price differentials in a holistic manner,
presenting opportunity for retailers. At the same time, investors and operators are increasingly looking to gain market share
by establishing new outlets.

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8

Did you know?


• The total food service outlets in the GCC nations is estimated to be more than 134,000 in 2020.

• The overall market expenditure of Saudi Arabia on food and beverage is estimated to be more than USD 50 billion in the
year 2020.

• KSA is a leading market for QSR chains such as McDonalds, KFC and Pizza Hut and they have 304 stores, 220 stores and
222 stores. respectively.

• Total restaurant sales of UAE are expected to reach USD 8.9 billion by 2025

• Kuwait market is the third largest among the GCC nations and the Food & Beverage sector accounts for 1.6% of the non-oil
GDP

• The Food & Beverage in Oman market is expected to reach the pre-pandemic level of business in the year 2022.

Interested to know more about the GCC Food & Beverage Sector? Find out in our latest report on the sector.

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9

Why purchase the report


• Timely Report on a COVID-19 Impacted Sector: The Food & Beverage Sector is one of the severely impacted sectors by the
lockdowns imposed due to COVID-19. The Report provides the impact by each of the GCC markets and when the expected
rebound to pre-pandemic levels is expected to occur in these markets.

• Market-wise Coverage & Analysis: The report provides market wise insights on a range of aspects pertaining to the GCC
Food & Beverage sector including the pre-pandemic growth trends in each of the GCC markets, the market size before the
pandemic and expected market size post pandemic, the new business models taking shape in the industry and key positive
and negative factors impacting the industry.

• Key Data Points: The report presents important data points such as,

• Number of Food & Beverage Outlets

• Trends in Sales per Outlet

• Number of outlets of leading QSR Chains

• Revenue Estimates by Different Size Categories

• Economies of Food Delivery Companies

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A 360. View

F & B Industry
structure

Key pain
Growth drivers
points

GCC F & B
Industry

Local versus Sales per outlet


Global players trends

Online Cloud Kitchen


Ordering trends

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11

Key Discussion Points


• Growth in F & B Outlets ( Example: Qatar)
2,600

2,400

2,200

2,000

1,800

1,600

1,400

1,200

1,000
2016 2017 2018E 2019E 2020E 2021F 2022F 2023F 2024F 2025F

• Pre Covid-19 and Post Covid-19 Recovery of Sales per Outlet ( Example: Oman)
2,500

2,250

2,000

1,750

1,500

1,250

1,000
2016 2017 2018E 2019E 2020E 2021F 2022F 2023F 2024F 2025F

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12

Excerpt: Global Food Chain Outlets


900

800

700

600

500 McDonalds
KFC
Pizza Hut
400
Pizza Hut

300

200

100

0
Kuwait Bahrain UAE Saudi Arabia Oman Qatar

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13

Excerpt: Unit Economies of Food Delivery Companies in MENA

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registered with the Registrar of Companies in India.

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About Marmore
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“Research Provider of the Year - 2018” award by Global Investor, a Euromoney Group company. To learn more, visit www.marmoremena.com

OUR JOURNEY SO FAR /marmoremena @marmoremena

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Business Verticals

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Challenges faced by Challenges faced by


Shift in economic powers foreign consultants local companies

 Understand the Cultural fit  Ability to analyze the big picture


and find opportunities
Energy markets  In-depth regional awareness and
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Refer our Report on Consulting

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Why partner with us?

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KEY PROJECT
BACKGROUND KEY CHALLENGES MARMORE APPROACH
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Advent of modern and Coordinating the interview Marmore conducted extensive
disruptive technologies schedules of over two meetings and interviews ranging Recommendations for
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and threats to the existing help in the development of In the Kuwait banking sector, player were provided. The
financial order. In this FinTech related policy Chief Executive Officer (CEO) recommendations covers a mix
context, a quasi within the set deadline was and Chief Information Officer of long- and short-time line
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An Egypt-based asset The energy sector company Marmore developed the
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the non-listed investments of
largest Egyptian consumer represent the fair value of client and publicly available
the company.
utility companies in the energy these investments. Diverse data. Extensive research was
sector. The project required us nature of these investments, carried to find out greater Marmore received very
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the company. their fair value. taken to arrive at the fair value. company for consideration to re-
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Two prominent methodologies value approach instead of cost
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Client testimonial flow and trading comparable
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We are definitely looking for more cooperation in the future the sum of the parts valuation of
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Marmore compiled all the
bank in the GCC region the market by establishing a strategies we created a lot of
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manner and prepared a
market beyond its home market. As the concept is still the pain points in entering the
detailed report with multiple
country required to develop relatively new for the GCC market with digital only presence
market penetration
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international markets. For each of the customer
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sport and relevant marketing
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Select Client Testimonials

We were fortunate to work with Marmore on Marmore team is very professional, from Marmore has provided both timely and reliable
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requests. They were prompt in addressing any and they did a great. Many changes have the research activities of Acreditus across all
concerns raised and we felt at ease been done and they were very flexible our client focus areas of credit, rating and
approaching the team with our needs. We with us. It will not be our last project for Islamic finance advisory. I sincerely hope to
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not hesitate to highly recommend Marmore projects soon.
Abdullah Molla
for their business intelligent services.
Head of Communication & Business Khalid F Howladar
Dr. Fatima Al Awadhi Development, Riyadh Valley Company Managing Director and Founder
Founder of Kuwait-based Aesthetic Clinic of Acreditus

The experience of working with Marmore We have worked with Marmore in many Marmore services were very useful and
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understanding of our requirements and in-depth research approach,quality reliable service in a challenging task.
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tasks was excellent, without any delays the regional business dynamics and
and the tasks were handled in a provides exact, tailored solutions. Mrs. Rana Adawi
professional manner. Chairperson and Managing Director
Ahmad Khamis of Acumen Asset Management

Nigel Sillitoe CEO, Bloovo.com


CEO, Insight Discovery - UAE

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