UAE Restaurent Analysis

Food-Service Market – UAE

Prepared By:-S.A.Rahman

Table Of Conte

Industry Analysis 3

Industry Analysis - Overview 4

Industry Segments 6

Industry Trends & Developments 7

Key Players – Hotel Segment 9

Key Players – Fast-Food Segment 10

Factors Supporting The Market Growth 11

Factors Affecting The Industry Growth 12

nts (1/2)

Table Of Contents (2/2)

Market Analysis 14

Fast Food Market - Overview 15

Largest Food Product Groups 16

In-Demand Food Categories 17

Food-Service Channel 18

Customer Analysis 19

Demographic Trends 20

Consumption Trends and Patterns 23

Industry Analysis

Industry Analysis - Overview (1/2)

The value of food and non-alcoholic beverages purchased by the UAE (UAE) foodservice sector is currently valued at Dh5.25 billion (US$1.43 billion) in wholesale prices in the year 2004In consumer values, the UAE foodservice market is worth a massive Dh16 billion (US$4.36 billion) in the year 2004The total value of spending in UAE's food industry is estimated to have exceeded Dh 6.47 billion (in wholesale prices) in 2006

5.255.83

6.47

0

1

2

3

4

5

6

7

2004 2005 2006

Industry Size(Billion Dh)

CAGR – 11%

*Above mentioned figures are taken from the study by BIS Shrapnel: Foodservice in the Middle East — the UAE, 2005–2006

Industry Analysis - Overview (2/2)

The UAE food services market is estimated to have grown at 11 % in 2005 and 2006 and the growth is likely to be sustained in the future as well, according to the “Foodservice in the Middle East — the UAE, 2005–2006”

Food Service Industry in the UAE due to its sharp growth, has witnessed a growing demand for food ingredients due to an increased appetite for Western-style foods, agrowing population and tourism, this in turn is attracting manufacturers of food products and services from across the globe, in particular the food sector

Industry Segments

The UAE Food Services Industry is segmented into three major segments. Namely:-

Food-Service Industry

Other Market Outlets:-It included ship chandlers, catering etc.,

Hotel And Restaurant:-tourist/business visitors which

(along with healthy portion of the resident expat community) fuel a

vibrant and growing hotel and restaurant sector

Retail Outlets:- This segment strives on the resident expat community which, in turn, represents 80% of the population base

Industry Trends & Developments (1\2)

The growth in the UAE food services market may be attributed to several factors, including:-– Growing population, – Significant rise in the number of tourists visiting the country, – Increase in the number of hotels– Increase in tourist in-flow

The UAE had around 7 million tourist arrivals in 2007 according to UNWTO– Studies indicate that the total spending by tourists in the UAE will reach

$7.6bn in 2009– In 2009, the number of international tourists is expected to decline due to

the global economy crisis

Industry Trends & Developments (2\2)

26% of UAE residents eat out at a quick service restaurant at

least once a week, with the frequency of visits to this type of

outlet being some 65% higher among Emiraties and expat Arabs

Dubai and Abu Dhabi account for 80% of total foodservice

demand amongst the seven Emirates

Quick Service Restaurants (QSR) sector is attracting more

international names due to the fact that the UAE has been able to

register double digit growth year on year for the last five years

Key Players – Hotel Segment

Company Number Of Hotels Approximate Number Of Restaurants

Jumeirah International 8 100

Le Méridien (Starwood) 8 80

Sheraton Hotels and Resorts(Starwood) 7 66

Rotana Hotels 7 50

InterContinental/Crowne Plaza 6 41

Hilton 8 40

Hyatt 3 36

Al Habtoor Group (Metropolitan Group of Hotels) 4 30

Kempinski 3 30

Radisson SAS Hotels and Resorts 4 30

Jebel Ali International 3 20

Marriott 3 10

The One and Only Royal Mirage 1 7

Dusit Dubai 1 6

Leading Up-Market Hotel Groups Ranked by Number of Restaurants

Key Players – Fast-Food Segment

Company Number Of Outlets Number Of Average Transactions Per Day

KFC, 62 (13 in Sharjah) Not Available

McDonald's, 60 700 to 800

Burger King, 19 restaurants (4 in Sharjah) 500 to 550

Pizza Hut, 12 (3 in Sharjah) Not Available

Leading Fast-Food Chains

The number of stand-alone restaurants exceeded 11,000, serving both residents and tourists and is growing by 5% every year. Over the last 10 years, a number of new (mainly US based) fast food restaurant franchises and other food service establishments including coffee and speciality dessert purveyors, entered the market. There are 4,250 restaurants & cafeterias operating in Dubai, 3,000 in Abu Dhabi, and 2,775 in Sharjah (according to MEF Magazine , October 2008).

Factors Supporting The Industry Growth

Population growth, currently averaging over 7% per annumRising rates of private consumption expenditure which also have the effect of driving up Food-Service expendituresThree-quarters of the population are non-nationals, with a large percentage of this segment being male bachelors (in fact, males outnumber females two-to-one)Given the prevalent working lifestyle, most people are compelled to eat at least one meal per day while at workThe impact of tourists visiting the country annuallyOne single Hardee’s outlet sells 20,000 burgers per day

Factors Affecting The Industry Growth

The number of international tourists is expected to decline due to

the global economy crisis

50% of the UAE population are low paid expatriate workers

brought in to work in the booming hotel and real estate

construction industry and are not relevant to the high value food

service industry, or the modern retail supermarkets

Market Analysis

Fast Food Market - Overview

The UAE imports over 80% of its food products(2006)

Approximately 50% of imported products are re-exported to GCC* countries, former Soviet states, the Indian Sub Continent and Eastern Africa(2006)

The UAE Fast Food Market is valued at USD$ 117 million in the year 2006

Fast food outlets in UAE is 315 in 2006

It is estimated that 26% of UAE residents eat at a fast food outlet at least once a week

Sources: “UAE food services market valued at Dh6.47b”, gulfnews.com, March 08, 2008, April 15, 2009, <http://www.gulfnews.com/business/Commerce/10195778.html>., “Malaysia seeks to leverage USD 5.52 billion food services market in the UAE”, arabwideweb.com, September 16, 2008, April 15, 2009, < http://www.arabwideweb.com/english/Events_News.asp?id=13>

*Gulf Co-operation Council (GCC) comprises of 6 countries, namely: Bahrain, Kuwait, Oman, Qatar, Kingdom of Saudi Arabia, UAE

Largest Food Product Groups

“Foodservice in the Middle East — the UAE, 2005–2006” says the four largest product groups purchased by foodservice operators are

– Meat, poultry and fish, accounting for just over 30%

– Beverages accounts for 18%– Dairy products accounts for 13%– Rice bread, pasta and cereal accounts for

12.9%– Others accounts for 26%

Further study shows that the fastest growing product types in the food service are poultry, lamb/mutton, fresh fruit and vegetables, processed meat and liquid milk

Sources: “UAE food services market valued at Dh6.47b”, gulfnews.com, March 08, 2008, April 15, 2009, <http://www.gulfnews.com/business/Commerce/10195778.html>., “Malaysia seeks to leverage USD 5.52 billion food services market in the UAE”, arabwideweb.com, September 16, 2008, April 15, 2009, < http://www.arabwideweb.com/english/Events_News.asp?id=13>

Food Groups purchased by Food-Service Operators

30%

18%13%

26%

12.90%

Meat, Poultry & Fish Beverages

Dairy products Rice, Bread, pasta & Cereal

Other Products

In-Demand Food Categories

Based on research interviews carried out with distributors, the fastest growing categories in the segment are poultry, lamb/mutton, fresh fruit and vegetables, and processed meat and poultry (i.e., halal)

Also noteworthy is the increasing popularity of low-fat versions of products, Asian sauces and ingredients, bakery products, coffee and specialty cheeses

The highest growth and best overall prospects for food and beverage suppliers are projected to be in the premium channels that cater to tourists and wealthier locals

Food-Service Channel

The Food-Service Channel– 4 and 5 star + hotels in the UAE account

for 17% of the total Food-Service expenditure

– 1, 2 and 3 star hotels account for 21% of the total Food-Service expenditure

– Casual dining account for 21% of the total Food-Service expenditure

– Fast-Food outlets account for 38% of the total Food-Service expenditure

– Others (i.e Ship Chandlers etc.,) constitutes just 3% of the total Food-Service expenditure

Sources: “UAE food services market valued at Dh6.47b”, gulfnews.com, March 08, 2008, April 15, 2009, <http://www.gulfnews.com/business/Commerce/10195778.html>., “Malaysia seeks to leverage USD 5.52 billion food services market in the UAE”, arabwideweb.com, September 16, 2008, April 15, 2009, <http://www.arabwideweb.com/english/Events_News.asp?id=13>

The Food-Service Channel

21%

21%

3% 17%

38%

4 & 5 star hotels 1,2 & 3 Star Hotels Casual dining

Fast food Others

Customer Analysis

Demographic Trends (1/3)

Population Break-Up by Age-Group– In 2004, those between the ages of

15-50 years constituted almost 70% of the population

– This population segment represents a high number of working expatriates

– High percentage of working expatriates are disposed to purchase ready-to-eat meals

– They are compelled to eat at least one meal per day while on the job, which pushes up the demand for fast, easy to consume meals


Population Break-Up by Age-Group

25%

69%

6%

Below 15 Yrs 15-50 Years Above 50 Years


Population Break-Up by Nationality (2004)– The UAE nationals make up only 10%

of the population– The Asian community mainly people

from South Asia (i.e. India & Pakistan) and the Far East (China, the Philippines) form 60% of the population.

– The Western expatriates account for 15%,

– The non-local Arabs account for only 15% of the total population


Population Break-Up by Nationality

60%

15%

10%15%

Locals Asian Westerns Other Arabs


Population Break-Up by Income-Group

46%

23%

25%6%

Lower Middle Upper Elite


Annual Income (2004)(DHS)

Percentage Wise Break-Up

Income Group

Less than 24,000 21 Lower

24,001-36,000 4.3 Lower

36,001-48,000 5.3 Middle

48,001-60,000 23.5 Middle

60,001-108,000 17.2 Middle

108,001-180,000 16.3 Upper

180,001-300,000 6.3 Upper

Above 300,000 6.1 Elite

Consumption Trends and Patterns (1\2)

26% of UAE residents eat out at a quick service restaurant at least once a week, with the frequency of visits to this type of outlet being some 65% higher among Emiraties and expat Arabs

Asian cuisine is the most popular of all cuisines and is growing the fastest

Lebanese food is also continuing to be popular as it suits Arabic tastes and is also relatively healthy

Since Asians & Arabs constitute the majority, rice consumption is very high in the UAE

Consumption Trends and Patterns (2\2)

Dairy products are popular in the region while statistics suggest UAE consumers eat around 80-85 kg of dairy products per capita per year

It’s believed by some that the market for energy drink in the Middle East is growing rapidly as the Muslim population looks for a beverage that’s is fun but not alcoholic

Analysis Complete

UAE Restaurent Analysis

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