Bright future ahead for GCC food industry

ALKESH SHARMA / Emirates Business

Strongly backed by prosperous economy and sturdy rise in the per capita income of the residents, the food services industry in the GCC region promises to grow significantly in the coming years.
According to Al Masah Capital Ltd, region’s leading investment firm, GCC food services market stayed at US$18.8 billion in 2014 and it is predicted to witness a growth at Compound Annual Growth Rate (CAGR) of 6.8 percent to reach US$24.5 billion in 2018.
Industry experts say increased number of expats, favourable demographics and augmenting purchasing power of individuals are some of the deciding factors while pegging this robust growth of food services sector.
“Geographically GCC is one of the perfectly located region for investors or entrepreneurs to get into food service industry. Millions of expats are working in this region and they prefer trying different cuisines, creating a scope for new restaurant and café chains to flourish. No other region offers this kind of lucrative avenue,” Nick Berry, Managing Director of Take Away Foods chain, told Emirates Business.
“Last year, we recorded a growth of up 15 to 25 percent in our operations across the GCC market and we are hoping to repeat the same performance this year,” he added.
Also, upcoming big events, especially Expo 2020 in Dubai, have given a much-needed boost to the food industry and many big players are expanding their operations in a bid to capture the untapped market.
Shailesh Dash, CEO Al Masah Capital, said, “Rising population is one of the key drivers of food consumption.
“The rising flow of tourists to GCC has helped drive demand. As most major foodservices outlets are concentrated in the tier I and II cities of the GCC countries, the rapid growth in urbanised population is expected to act as a stimulus to the growth in the food service sector.”
According to Al Masah Capital, Saudi Arabia led the region and accounted for nearly half of the GCC’s food service market. It registered total food service sales of around US$8.9 billion. It was followed by the UAE that recorded total sales of US$5.3 billion.
“We have annual food festivals, exhibitions and shopping festivals held in the region that provide a boost for growth,” pointed out Dash.
Besides churning out good money for the owners, food service industry has also provided direct as well as indirect employment to hundreds of youths in this region.