UAE Food And Beverage Market - TURKISH BUSINESS COUNCIL
Trendsand OpportunitiesDUBAIUAE Food and Beverage MarketFebruary 2020Economic Research DepartmentDubai Chamber of Commerce and Industry1
OUTLINESection I: OverviewSection II: UAE Food and Beverage MarketSection III: Dubai Trade of Food and Beverage ProductsSection IV: Opportunities in Food and Beverage MarketSection V: Conclusions2
OverviewFood Security in UAEAccording to FAO “food security exists when all people, at all times, have physical and economic access to sufficient, safe andnutritious food that meets their dietary needs and food preferences for an active and healthy life”. UAE has taken several steps toachieve food security, such as vertical farming, developing food storage facilities, investing in agricultural lands in some Asian andAfrican countries, and some other initiatives. According to EIU, the Food Security Index of UAE has always been improving over thepast 5 years. Furthermore, the data also show that the UAE is the best performer among the GCC countries in the improvement ofGlobal Food Security Index over the past 5 years.UAE’s Global Food Security Index, 2014-20187372.5Score7271.4UAE70.9717071.75-year change in score of Global Food SecurityIndex in GCC, 2014-20183.0Bahrain1.9Oman69.51.8Saudi Arabia69Kuwait68201420152016Note: Scores are out of 100Source: Dubai Chamber based on EIU and Alpen Capital201720181.5-0.6Qatar -1.43
OverviewDriving Factors of Food Industry in UAEDriving factors of the Food and Beverage (F&B) sector in UAE are population growth, high GDP per capita and rising tourist arrivals. Inparticular, according to IMF, UAE population was around 10 mn, and the country had one of the highest GDP per capita in the worldin 2019. The Food Industry also being boosted by rising tourism, and the latest data show that in 2019, Dubai welcomed 16.7 mntourists.Population GrowthRising IncomeRising Tourist ArrivalsTotal population of UAE wasaround 10.7 million in 2019GDP per capita in UAE wasaround 39,749 in 2019In 2019, Dubai welcomed 16.7million touristsSource: Dubai Chamber based on IMF World Economic Outlook and Dubai Media Office4
OverviewUAE National Food Security Strategy 2051Five pillars of National Food Security StrategyUAE Target by 2021To make UAE within the top 10 inGlobal Food Security Index ranking.Domestic production targetfood over 100,000 tons by 2021.ofFacilitateglobalagri-businesstrade and diversify internationalfood sources.Enhance sustainable technologyenabled domestic food supplyacross the value chain.Reduce food loss and waste.Creation of more than 16,000 jobsin food sector in the country.Achieving economic returns of upto AED 22 billion in food sector.Source: UAE Food Security AgendaSustain food safety and improvenutritional intake.Enhance capacity to respond tofood security risks and crises.5
OUTLINESection I: OverviewSection II: UAE Food and Beverage MarketSection III: Dubai Trade of Food and Beverage ProductsSection IV: Opportunities in Food and Beverage MarketSection V: Conclusions6
UAE Food and Beverage MarketFoodAccording to Euromonitor, in 2018, the retail sales value of fresh food and packaged food in UAE reached USD 8.0 bn and USD 5.5 bn,respectively. Furthermore, between 2013 and 2018, UAE retail sales of fresh food grew with CAGR of 5.1% and retail sales value ofpackaged food grew with CAGR of around 3.9%.Fresh Food and Packaged Food Retail Sales Value (USD bn)Packaged FoodFresh Food9USD bn87654322013Source: Euromonitor201420152016201720187
UAE Food and Beverage MarketFood by CategoriesIn 2018, staple foods had the highest retail sales value and growth rate among the packaged food categories, followed by dairy,snacks, and cooking ingredients and meals. In the fresh food category, the largest sales value was observed for meat, vegetablesand fruits, but pulses had the highest CAGR of 7% between 2013 and 2018.Packaged Food Retail Sales Value by Categories,USD bn (2018) and CAGR (2013-2018)CAGRStaple Foods1.8Dairy1.6SnacksCooking Ingredientsand MealsSource: Euromonitor1.30.74.8%2.8%4.2%4.3%Fresh Food Retail Sales Value by Categories, USDbn (2018) and CAGR (2013-2018)MeatVegetablesFruitsNutsFish & SeafoodPulsesStarchy RootsEggsSugar & .7%5.4%3.8%7.0%2.0%3.0%2.8%8
UAE Food and Beverage MarketBeveragesAs reported by Euromonitor, in 2018, UAE retail sales value of soft drinks reached USD 5.1 bn. From 2013 to 2018, UAE retail sales of softdrinks grew with CAGR of around 5.7%. The largest category in this group was bottled water, juice and carbonated water. It is alsoworth mentioning that Ready to Drink (RTD) coffee had the highest CAGR of 22% between 2013 and 2018.Soft Drinks Retail Sales Value, USD bn (2018) andCAGR (2013-2018)6Soft Drinks Retail Sales Value by Categories, USDmillion (2018) and CAGR (2013-2018)Bottled Water2,201Juice51,378CarbonatesEnergy Drinks4322013Source: Concentrates543%RTD Tea166%Sports Drinks1314%RTD Coffee622%9
UAE Food and Beverage MarketNew Trends in FoodUAE Sales Value in 2018 (USD m) and CAGR (2013-2018)Naturally Healthy FoodOrganic FoodFree-From Food 473 m 31 m 29 m9.7%17.7%18.3%Nuts & Seeds 162 m20%DairyBaby FoodDairy 128 m6%High Fibre 48 m8%Olive Oil 36 m7%Sauces &DressingsMeat, Fruit &VegetablesHoney 35 m7%Biscuits & SnacksFruit SnacksSource: Euromonitor 43 m4% 10 m30% 9 m22%Gluten Free 4 m13% 15 mDairy Free35% 8 m7% 3 m8%AllergensFree 3 m14%Lactose Free10% 3 m10% 1 m10
UAE Food and Beverage MarketE-commerce in Food IndustryUAE has one of the highest internet penetration rates in the world, with almost 99% of its population using the internet. Moreover,many people in UAE use smartphones. This gave a push for the growth of food and drink internet retailing in UAE over the past fewyears. According to Euromonitor, between 2014 and 2019, UAE F&B internet retailing more than tripled and reached USD116 millionin 2019. In general, there are many e-commerce websites or mobile applications in UAE which offer food delivery services or theyconnect big supermarkets to consumers. Moreover, this market in UAE is growing very fast and there are also some specialized ecommerce websites that focused only on for instance, in organic products, or meat and seafood products.Food and Drink Internet Retailing in UAE, USD million, 2014-2019115.998.171.582.155.731.62014Source: Euromonitor20152016201720182019e11
OUTLINESection I: OverviewSection II: UAE Food and Beverage MarketSection III: Dubai Trade of Food and Beverage ProductsSection IV: Opportunities in Food and Beverage MarketSection V: Conclusions12
Dubai Trade of Food and Beverage ProductsTotal tradeThe Dubai Customs’s latest data show that in the first three quarters of 2019, Dubai imports of F&B products from the world reachedUSD 9.6 bn, and it grew with CAGR of 1.7% from 2012 to 2018. Furthermore, in 2019 (Q1-Q3), re-exports of F&B products reached USD2.9 bn, and had a CAGR of 4% between 2012 and 2018. The data also indicate that the share of re-exports in imports of F&B productsof Dubai with the world grew from 22% in 2012 to 30% in 2019, 8 percentage point growth.Dubai Trade of Food and Beverage Products withthe World (USD bn) and CAGR (%, 2012-2018)USD bnExport1614121086420ImportDubai’s re-export share in imports of Food andBeverage products from the world (%)Re-export 8%CAGR 1.7%30%22%CAGR 4.0%CAGR 0.1%2012 2013 2014 2015 2016 2017 2018 2019Q1-Q320122019 Q1-Q3Note: Food and Beverage Trade includes all products from HS01 to HS23, excluding HS05 (Products of animal origin) and HS06 (Live trees, flowers etc.).Source: Dubai Customs13
Dubai Trade of Food and Beverage ProductsTrade PartnersIn 2019 (Q1-Q3), Dubai had diversified imports of F&B products and major import partners include the USA, India, Brazil, Australia andothers. The data also indicate that during the same period, Dubai also had diversified exports of F&B products, and major exportpartners in this product group include Oman, Iraq, Saudi Arabia, China, Somalia and other countries. In general, both figures indicatethat Dubai mainly imports F&B products from far countries such as the USA, Brazil and Australia, and exports them to the Middle Eastand African countries.Dubai’s Major Partners in Imports of Food and BeverageProducts from the World, % share, 2019 Q1-Q311%10%47%9%4%4%3%3% 3%3%3%USAIndiaBrazilAustraliaNew �s Major Partners in Total Exports of Food andBeverage Products to the World, % share, 2019 Q1-Q311%8%6%3%3%3%56%3%3%2% 2%OmanIraqSaudi ersNote: Food and Beverage Trade includes all products from HS01 to HS23, excluding HS05 (Products of animal origin) and HS06 (Live trees, flowers etc.).Source: Dubai Customs14
Dubai Trade of Food and Beverage ProductsMajor Traded ProductsDubai Customs data also indicate that Dubai traded with many types of products with the world in 2019 (Q1-Q3). In imports, themajor products included fruits and nuts, meat, dairy, beverages and other products. In exports/re-exports major products are fruitsand nuts, beverages, dairy, meat and others.Dubai’s Major Imported Food and Beverage Productsfrom the World, % share, 2019 Q1-Q322%Fruits and nutsFruits and nutsMeat (bovine, sheep, chicken)Beverages (soft drinks, spirits)Dairy15%5%Coffee, tea, spicesCereals5%8%6%6% 7%7%Other edible foodVegetablesCereal preperationsCocoa & products of itOthersDairy16%22%Beverages (soft drinks, spirits)13%6%Dubai’s Major (Re-)Exported Food and Beverage Productsto the World, % share, 2019 Q1-Q3Meat (bovine, sheep, chicken)11%4%4%10%5%Other edible foodCoffee, tea, spicesAnimal or vegetable fatCereal preperations5%7%7%9%Vegetable preperationsMeat preparationsOthersNote: Food and Beverage Trade includes all products from HS01 to HS23, excluding HS05 (Products of animal origin) and HS06 (Live trees, flowers etc.).Source: Dubai Customs15
OUTLINESection I: OverviewSection II: UAE Food and Beverage MarketSection III: Dubai Trade of Food and Beverage ProductsSection IV: Opportunities in Food and Beverage MarketSection V: Conclusions16
Opportunities in Food and Beverage MarketForecast for F&B Products Sales in UAEAccording to Euromonitor’s forecast, from 2018 to 2023, UAE sales of packaged food, fresh food and soft drinks will grow with CAGR ofaround 3.5%, 5.2% and 1.2%, respectively. In packaged food, the growth of retail sales value will be the highest in staple food,followed by cooking ingredients, snacks and dairy. In fresh food, the largest growth is expected in meat, pulses, nuts and vegetables.Moreover, in soft drinks category, the largest growth will be in ready to drink (RTD) coffee, bottled water, concentrates, tea and otherproducts.Forecast for UAE’s Packaged FoodRetail Sales Value, CAGR (2018-2023)Staple Foods5.1%Cooking Ingredients& Meals4.3%Forecast for UAE’s Fresh Food RetailSales Value, CAGR %Sugar and SnacksDairySource: Euromonitor2.6%1.7%4.3%Eggs4.0%Fruits4.0%Fish and SeafoodStarchy Roots3.7%1.9%Forecast for UAE’s Soft Drinks RetailSales Value, CAGR (2018-2023)RTD Coffee8.3%Bottled Water4.4%Concentrates3.9%RTD Tea3.3%JuiceSports DrinksCarbonatesEnergy Drinks2.1%-3.6%-4.9%-8.6%17
Opportunities in Food and Beverage MarketEXPO 2020The growth of F&B sector in UAE is expected to continue with the upcoming mega event EXPO 2020. In particular, this event will offerlarge opportunities in F&B sector. EXPO 2020 expected to host 25 million visitors, and estimated onsite sales of F&B products expectedto be 545 million. Moreover, around 85,000 meals will be served per hour during the six months event.VisitorsF&B SalesExpo 2020 expected to hostEstimated onsite F&B salesduring the event worth25 million visitorsSource: Alpen Capital and EXPO 2020 DubaiUSD 545 millionMeals85,000Aroundmeals will beserved per hour in EXPO 202018
Opportunities in Food and Beverage MarketMENAIt was mentioned before that the Middle East and North African countries have a significant share in Dubai’s total exports of F&Bproducts to the world. The region will continue to be the major trade partner, due to a high expected consumption growth of F&Bproducts in the world, according to Euromonitor. In particular, MENA countries expected to have high sales value growth in meat andpoultry, seafood, pulses, grain and cereals and other products over the next five years.Forecast of F&B Consumption in the World by Region,CAGR (2018-2023)Middle East & North Africa9.9%Sub-Saharan Africa8.8%Latin America7.4%Asia PacificEurope4.4%Australasia4.3%North AmericaSource: Euromonitor6.7%3.4%Forecast of F&B Value Sales in MENA by Categories,CAGR (2018-2023)Meat & Poultry5.2%Seafood5.2%Pulses, Grains & CerealsBeverages3.8%3.6%Fats and Oils3.4%Confectionery & Snacks3.3%Cooking Ingredients3.2%Dairy2.9%19
Opportunities in Food and Beverage MarketPotential Products for ImportsPotential F&B Products for Dubai imports2019 (Q1-Q3), YoYchange in volumeDubai F&B imports volume (2019 Q1-Q3) vs. YoYchange, 2018-2019 (Q1-Q3)60%40%20%0%-20%-40%-60%1263 5 41,000Thousand ton2,0002019 (Q1-Q3), YoYchange in valueDubai F&B imports value (2019 Q1-Q3) vs. YoY change,2018-2019 (Q1-Q3)60%140%50%43627ValueGrowthCAGR of volume(2011-2018)Meat (bovine, sheep,1. chicken)48%52%4%Beverages (soft drinks,2. spirits)42%6%5%3. Cereal preparations9%12%4%Vegetable & 1234AED BillionSource: Dubai Chamber based on Dubai Customs data54.5. Products of the millingindustry6.Cocoa & products of it7. Fruits and nuts-20%-VolumeGrowth7020%Short Term Growth ofLong TermDubai Imports, 2019 (Q1- Growth of DubaiQ3), YoY changeimports6These figures and table show Dubai’s imported food and beverage products from theworld which had a high short term (2018 vs 2019) volume and value growth rate. Inaddition, these products also had high long term import growth rates. For instance,between Q1-Q3 of 2018 and 2019, Dubai import volume and value growth of meatproducts from the world grew by 48% and 52%, respectively. Besides, Dubai import volumeof meat from the world grew with CAGR of 4% from 2011 to 2018.20
Opportunities in Food and Beverage MarketPotential Products for Re-exportsDubai F&B re-exports volume (2019 Q1-Q3) vs. YoY change,2018-2019 (Q1-Q3)2019 (Q1-Q3), YoYchange in volume800%Short Term Growth of Dubai Long Termre-exports, 2019 Q1-Q3,Growth ofYoY changeDubai re-expCAGR ofValueVolume Growthvolume (2011Growth2018)1600%400%2200%36 4 790%-200%-58100200300Thousand tonDubai F&B re-exports value (2019 Q1-Q3) vs. YoY change,2018-2019 (Q1-Q3)1600%2019 (Q1-Q3), YoYchange in valuePotential F&B Products for Dubai re-exports11200%800%400%0%-400%32 46 59 70.082.0AED BillionSource: Dubai Chamber based on Dubai Customs data4.01. Meat (bovine, sheep,chicken)2.Fish and Seafood3.Oil seeds and oleaginous fruits4.Cocoa & products of it5. 64%20%6. Meat preparations26%21%3%7. Coffee, tea, & spices9%26%0%8. Beverages (soft drinks, spirits)8%-2%10%9. Cereal preparations8%66%1%These figures and table show Dubai’s re-exported food and beverage products to theworld which had a high short term (2018 vs 2019) volume and value growth rate. Inaddition, these products also had high long term re-export growth rates. For instance,between Q1-Q3 of 2018 and 2019, Dubai re-export volume and value growth of meatproducts to the world grew by 747% and 1,155%, respectively. Besides, Dubai re-exportvolume of meat to the world grew with CAGR of 14% from 2011 to 2018.21
Opportunities in Food and Beverage MarketInvestment OpportunitiesF&B Business Environment1st/18thFood Manufacturing13%/17%According to FitchDubai’s F&B manufacturingConnect Risk Rewardcontributes 13% of theIndex, UAE ranked 1st inmanufacturing valuethMENA, and 18 globally inadded and 17% of theF&B investmentmanufacturing output.environment attractivenessin 2020 (Q1)Opportunities: Processedcereals, meat, fruits andvegetablesSource: Fitch Connect, Dubai Exports, Dubai FDI, Thomson ReutersAgriculture 1,000There are around 1,000hydroponic projects inUAE.Opportunities: drought,heat, and salt-tolerantcrops, vertical andhydroponic farmingHalal Food 1,863 bn 1,303 bn20172023Global halal foodexpenditure will reach 1,863 bn by 2023 andDubai wants to become ahub in ‘halal’ food.22
Opportunities in Food and Beverage MarketFinding Potential Buyers: Case Study for Frozen Chicken Exports to Oman1. Open www.trademap.organd type HS code of theproduct (e.g. HS020714-Frozenchicken), and country you wantto export (e.g. Oman), andpress Companies.2. In the next page, select theproduct category you want toexport (e.g. Poultry and poultryproducts).3. Get the list of companies inproduct and country you areinterested in (e.g. 20 importingcompanies of poultry productsin Oman).Note: Register first on the website and it is free.Source: Trademap23
OUTLINESection I: OverviewSection II: UAE Food and Beverage MarketSection III: Dubai Trade of Food and Beverage ProductsSection IV: Opportunities in Food and Beverage MarketSection V: Conclusions24
ConclusionsThe UAE remains the most attractive market in the region for food and beverage.In UAE, the consumption of staple food, meat, and beverages is growing strongly byvalue and volume.Health, taste, nutrition, convenience and online shopping are becoming a new drivingfactors of food industry in UAE and MENA region.There are also large investment opportunities in food manufacturing, halal food andinnovative agriculture.UAE is becoming a major hub for F&B trade in the MENA region.Dubai Chamber International Offices can help importers and re-exporters of food andbeverage products to grow in their respective countries and regions.25
References and useful links Alpen Capital. “GCC Food Industry Report 2019” http://www.alpencapital.com/industry-reports.html# (accessed February 2020). Dubai Customs. “Dubai Trade Statistics” /Pages/default.aspx (accessed January2020).EIU. “Global Food Security Index” https://foodsecurityindex.eiu.com/Index (accessed February 2020). Euromonitor. “Global Industry Outlook Report - Gulfood 2020”. https://www.gulfood.com/outlook-report (accessed February 2020). Euromonitor. “Food and Drink Internet Retailing in United Arab Emirates 2018”. tretailing-in-the-united-arab-emirates/report (accessed February 2020). Euromonitor. “Fresh Food in United Arab Emirates 2018”. ed-arab-emirates/report(accessed February 2020). Euromonitor. “Naturally Healthy Packaged Food in United Arab Emirates 2018”. ged-food-in-the-united-arab-emirates/report (accessed February 2020). Euromonitor. “Packaged Food in United Arab Emirates 2018”. nited-arabemirates/report (accessed February 2020). Euromonitor. “Soft Drinks in United Arab Emirates 2018”. ted-arab-emirates/report(accessed February 2020). Fitch Solutions. “United Arab Emirates Food & Drink Report” ed-arab-emirates-food-drinkreport (accessed February 2020). IMF “World Economic Outlook by Country” eodata/weoselgr.aspx (accessedFebruary 2020).Trademap “Bilateral Trade Statistics” https://trademap.org/ (accessed February 2020). UAE Food Security Agenda. “National Food Security Strategy”https://foodsecurity.gov.ae/en/download f (accessed February 2020).26
Dubai Trade of Food and Beverage Products Trade Partners Dubai's Major Partners in Imports of Food and Beverage Products from the World, % share, 2019 Q1-Q3 Source: Dubai Customs 14 Note: Food and Beverage Trade includes all products from HS01 to HS23, excluding HS05 (Products of animal origin) and HS06 (Live trees, flowers etc.).
the Food & Beverage industry in the United Arab Emirates From the chef’s table Food for thought 3. Antipasti We examine the current state of the UAE’s F&B market and understand the interplay of demand and supply dynamics The UAE continues to lead the Food
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For market intelligence and information on doing business and exporting to the UAE, please see the U.S. Commercial Service in the UAE web page and the United Arab Emirates Country Commercial Guide prepared by the U.S. Commercial Service team in the UAE. More information about the UAE, check out the CIA Country Factbook - UAE.
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