Monday, October 18, 2021

Dubai And Abu Dhabi’s F&B Sector Expected To Turn A Corner

The food and beverage (F&B) sector is primed for growth in both Dubai and Abu Dhabi over the coming years, according to a new report released by JLL.

The UAE’s F&B sector was impacted by measures designed to prevent the spread of COVID-19, however,with restrictions in restaurants easing and hotels running at full capacity, the industry is now ready for rapid recovery, says the JLL report.

“The recovery in the UAE’s F&B sector is predicated on a combination of factors, including higher levels of overseas visitors due to travel restrictions continuing to ease globally, through to improving consumer confidence among the resident population which has been helped by the success of the country’s vaccine roll-out,” said Alexis Marcoux-Varvatsoulis, Foodservice Consulting Lead at JLL MENA, who today released the report at the Arabian & African Hospitality Investment Conference (AHIC) in Dubai.

“While we anticipate that demand for F&B will increase across the UAE, this does not necessarily mean that there will be a need for more restaurants to open, but rather for the existing ones to re-invent themselves and for some to re-locate to newly created higher-populated residential or business areas to capture demand within those localities.”

The report highlights how JLL researched and categorised almost 45,000 foodservice units across eight cities in the UAE, Saudi Arabia and Europe. Of these, Dubai ranked highest in terms of the largest number of outlets per resident and the most variety in terms of categories and available cuisines.

Projections from Euromonitor, the global research and insights portal,also shows that the UAE’s consumer foodservice industry will largely reverse the contraction seen last year by posting strong growth over 2021-2023 – predicted to be around 26%. JLL’s report highlights that in the early part of this forecast period, the hosting of Dubai Expo 2020 is anticipated to provide a fillip to the emirate’s consumer foodservice activity as both tourism and business travel bounce back.

Looking ahead, JLL has examined the food and beverage trends that are set to lead the way in the UAE:

  1. Local brands go international

When the foodservice market was in its relative infancy, international brands were imported to the UAE. However, as Dubai’s F&B sector has matured, an increasing number of home-grown brands have been developing. This includes companies such as Orange Hospitality, Solutions Leisure, Gates Hospitality, and many others which continue to refine their own concepts to shape Dubai’s foodservice sector. In addition, the city’s unique home-grown foodservice concepts are now being introduced to other global cities such as London and Moscow.

  1. Experiential dining

Dinnertainment is a concept where F&B and entertainment are merged within a destination outlet. Traditionally in the UAE, the dinnertainment market has been dominated by restaurants focused on children’s entertainment. By comparison, dinnertainment for adults typically existed in the form of table and live music. However, in the past few years, in-line with global trends, the UAE has seen an increase in interactive licensed dinnertainment concepts where diners can take a break from the dining table to engage in activities such as bowling, electronic gaming, etc. While dinnertainment remains a relatively new concept, it will invariably continue to develop across both Dubai and Abu Dhabi in the years to come, especially since dining is increasingly becoming a social occasion.

  1. Food Halls

Currently, six food halls are operational within Dubai and one is under development. Abu Dhabi is also starting to adopt this concept; one is currently trading and another one is due to begin operating in the near future. Two other food halls – the locations of which remain confidential – are also set to open in the country by 2023. Although interest in developing this type of F&B is growing, tenants will have to differentiate their offerings from existing or upcoming competitors in order to stand out – especially as this dining concept continues to gain in popularity.In the short to medium-term, JLL expects more food halls to be delivered across the UAE given the success they have generally enjoyed so far.

“In the longer term, we expect to see the appearance of “local” driven, stand alone, developments that will act as social hubs for a community. These will not only be unique to each city, they will promote its local talent and drive awareness of new and exciting concepts,” addedMarcoux-Varvatsoulis.

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