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This is the fifth edition of our annual series, which examines the current state of the Food & Beverage (F&B) industry. In addition to the United Arab Emirates (UAE), we have expanded our coverage this year to include the Kingdom of Saudi Arabia, Kuwait, and the Sultanate of Oman.

Over the past few years, we have endeavored to fill a gap in the UAE F&B market: the absence of reliable and relevant information for stakeholders. This time, we have taken a further step in our journey to bring you flavors from the region, addressing feedback we have received from many of you. We have found that each market represents a unique set of opportunities and challenges.

We were originally looking forward to releasing this report earlier this year, based on research conducted in the second half of 2019. However, seeing the ramifications the pandemic had on the sector and its performance, we decided to step back. We updated our research to reflect what we have witnessed in the market over the last eight months.

This report captures the views of operators and consumers across the region and draws comparisons amongst countries around consumption preferences and behavior, including a second survey in summer 2020 to gauge operator and consumer sentiment in response to Covid-19.

We have continued our analysis of financial and operational benchmarks for various segments within the sector. At the time of writing this report, the world is going through a phase of unprecedented uncertainty, with customer-facing businesses generally bearing the brunt. How well the industry fares will likely depend on how soon the virus is contained and the level of associated lockdown restrictions.

In the UAE, 2019 market dynamics remained largely consistent with 2018, though we did see some signs of normalizing performance. The pandemic has brought with it a new set of challenges to overcome, and most operators will rely heavily on the support of the government and key stakeholders.

Given recent policy changes in Saudi Arabia, the market presents an interesting and evolving opportunity that is drawing operators’ attention. While the Kingdom has always had the potential to become the largest F&B market in the region, it may at last fulfill this. While short-term expectations have been hampered by Covid-19, Saudi Arabia is still the next frontier in the region for F&B operators.

Kuwait, launchpad of the region’s most prominent home-grown concepts, paints a picture similar to the UAE. It boasted the highest spend on delivery in the region in 2019. In Oman, we saw that despite being the smallest F&B market in the GCC, the Sultanate fared marginally better than the UAE and Kuwait on the back of growth in consumer demand in the run up to the pandemic.

Consumers across the region continue to demonstrate value-seeking behavior, compelling operators to incorporate deals and promotions as a key tactic. While most consumers surveyed expect to resume their pre-pandemic dining habits by early 2021, several operators in the GCC appear to be bracing for hard times, with most expecting reduced sales through mid-2021.

Recovery may prove tricky. However, operator performance through recent downturns indicate that those who can hone their strategy, test their methods, and remain afloat throughout the potentially lean periods will enter the recovery poised for expansion. We would like to extend our heartfelt thanks to the operators who voluntarily shared their insight and experience with us – you help to make our report rich and relevant every year.

We hope you find the publication useful. We would be delighted to discuss the findings with you and hear your feedback.