DUBAI
The GCCs food services sector is headed for further growth, and is expected to hit a value of $29.3 billion by 2020 up from $21.5 billion in 2016 and $20.1 billion in 2015. According to a report issued by Al Masah Capital on Wednesday, the Gulf food service market is expected grow at an annual rate of 8 per cent, driven by a growing population and tourism sector, disposable income, and changing dietary habits.
The report stated that the increase in demand came despite sluggish economic conditions, adding that the growth will be largely driven by a ballooning middle class and increased penetration by international and local brands.
With the regions overall food consumption expected to have reached 48.1 million metric tonnes in 2016, the GCC is projected to build a strong brand identity in the food services space and is likely to continue strengthening its foothold in coming years.
In its report, Al Masah Capital pointed that that despite an economic slowdown in the GCC, private equity players have clearly preferred to increase their investment focus in the food services sector amid rising volatility and decline in oil prices since 2014.
The report also indicates that the fast food segment grew by 7.4 per cent, and is expected to continue its dominance in the market followed by the full service restaurant segment, which grew by 6 per cent.
Cafs and bakery segments, whose sales remained relatively subdued, with an annual gwth rate of 7.5 per cent between 2012 and 2016, are also expected to grow at around 3 per cent to reach $2.75 billion by 2020.
In the UAE and Saudi Arabia especially, governments are heavily investing in the hotel and retail spaces, to turn the region into a hub for hospitality brands, a move that will ultimately have a positive effect on the food services sector.
According to the report, trends that are likely to accelerate the food service sector growth include a rise in demand for healthy and organic food. This is mainly due to a rising rate of lifestyle-related diseases such as diabetes and obesity in the GCC as well as increased attention on health issues.
More players are now increasingly expanding their menus to also include healthier food options to cater to this expanding segment, and thus widening their revenue base as they attract more customers.
The GCCs food services sector is headed for further growth, and is expected to hit a value of $29.3 billion by 2020 up from $21.5 billion in 2016 and $20.1 billion in 2015. According to a report issued by Al Masah Capital on Wednesday, the Gulf food service market is expected grow at an annual rate of 8 per cent, driven by a growing population and tourism sector, disposable income, and changing dietary habits.
The report stated that the increase in demand came despite sluggish economic conditions, adding that the growth will be largely driven by a ballooning middle class and increased penetration by international and local brands.
With the regions overall food consumption expected to have reached 48.1 million metric tonnes in 2016, the GCC is projected to build a strong brand identity in the food services space and is likely to continue strengthening its foothold in coming years.
In its report, Al Masah Capital pointed that that despite an economic slowdown in the GCC, private equity players have clearly preferred to increase their investment focus in the food services sector amid rising volatility and decline in oil prices since 2014.
The report also indicates that the fast food segment grew by 7.4 per cent, and is expected to continue its dominance in the market followed by the full service restaurant segment, which grew by 6 per cent.
Cafs and bakery segments, whose sales remained relatively subdued, with an annual gwth rate of 7.5 per cent between 2012 and 2016, are also expected to grow at around 3 per cent to reach $2.75 billion by 2020.
In the UAE and Saudi Arabia especially, governments are heavily investing in the hotel and retail spaces, to turn the region into a hub for hospitality brands, a move that will ultimately have a positive effect on the food services sector.
According to the report, trends that are likely to accelerate the food service sector growth include a rise in demand for healthy and organic food. This is mainly due to a rising rate of lifestyle-related diseases such as diabetes and obesity in the GCC as well as increased attention on health issues.
More players are now increasingly expanding their menus to also include healthier food options to cater to this expanding segment, and thus widening their revenue base as they attract more customers.
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