Market Profile for Food and Beverage in UAE Market
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The United Arab Emirates (UAE) imports an estimated 90 percent of its food and beverage.1 In 2007 the UAE had a GDP of US$190 billion and a residentpopulation of around five million.6 The UAE is made up of seven emirates and is part of the Cooperation Council for the Arab States of the Gulf (GCC), the other members being Oman, Kuwait, Qatar, Saudi Arabia and Bahrain. The seven emirates have a large number of expatriates which make up the majority of the population, with UAE nationals comprising only about 20 percent of the total. The largest ethnicgroup is South Asian – expatriates from India, Pakistan, Bangladesh and Sri Lanka making up 50 percent. Arabs and Iranians make up 23 percent of the populations with the remainder 8 percent being Westerners and East Asians.2 Demographically, the UAE’s population is relatively young. Its population is growing at a rate of approximately three percent per annum, which is occurring through naturalgrowth, as well as a rapid expansion in the number of expatriates based there.3 The UAE is the highest consumer per capita of bottled water.4 The total consumption of food and food products is estimated at almost US$4 billion and in the food service market 50 percent is estimated to be food consumption in the luxury hotel industry.6With this growth the demand for imported food will continue to rise, asclimate and soil conditions the UAE prevents mass farming and product production, however secondary production such as value-added processing and manufacturing is increasing. Table 1 Food and Beverage market value and expenditure per capita, 2004 - 2008 $US Food and Beverage 2004 2005 2006 2007 2.73 2.92 3.11 3.32 UAE Food and Beverage Market (population Value ($US in billions) 2.12 2.28 2.46approx 5 Food only Market Value ($US 1.96 million) in billions) 698.78 715.15 730.92 748.11 Food and Beverage Expenditure per Capita ($US) 502.66 520.39 536.73 554.1 Food only Expenditure per Capita ($US)
Source: Datamonitor. Consumer Products Database
3.55 2.64 768.95 573.16
With more than 11,000 eating establishments are in the UAE6 major food and beverage multinationals have reportedit to be a profitable market in terms of margin returns. The fast food industry is also growing with reported growth during the last quarter of 2008. Business through large quick service and casual dinning restaurants is valued at over US$1billion and is nowhere near saturation. There are 450 franchise restaurants in the UAE
that are enjoying double digit growth. As in other marketsresidents and tourists in the UAE are expected to turn more to casual dinning and quick service restaurants during the global economic downturn. The UAE is now host to over 400 hotels with Dubai Emirates operating 66 luxury five star hotels.6 Due to the current global economic outlook there is a decrease in tourists, however prior to 2009 there was increasing growth in tourism which increased demand forimported food.5 As only food and beverage outlets located within certain establishments (primarily hotels) are permitted to apply for an alcohol licence, western resident expatriates, and tourists, are more inclined to dine there. Each hotel has a selection on eating places from coffee shops to fine dining and a five star hotel has a minimum of 15 restaurants. Along with the hotel and restaurant...
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