• US$7.63 billion (AED 28 billion) is the annual revenue of 2,000 food and beverage companies in the UAE.

• Food and beverages represent 25% of the country's industrial sector.

• Snacks and bakery drive sector growth

• Food and beverage industry to reach US$23.2 billion (AED85.4 billion) by 2025

Dubai, UAE; The UAE Food and Beverage Manufacturers Group (F&B) has released its 2023 Annual Report, providing a comprehensive and detailed overview of the country’s food and beverage sector, and for the first time analysing consumer preferences, retail dynamics and demand for each food and beverage category, amidst an environment of high inflation and price volatility across the Middle East and Africa markets.

The report highlights the strong growth of the food and beverage trade, highlighting the key trends shaping the sector and the growing importance of access to consumer brands. It notes that snacks and bakery products are leading the growth, outperforming the overall sector average. Despite rising prices, consumer preferences point to continued growth in demand for premium products. The report also highlights the vibrant growth of small producers and manufacturers, outpacing the growth rates of larger market players.

The number of companies operating in the food and beverage industry in the UAE reaches more than 2,000 companies, with annual revenues of 7.63 billion US dollars (28 billion dirhams), and it constitutes 25% of the industrial sector’s GDP, which places it second after the oil and gas sector in terms of contribution to the GDP.

The report includes some findings and insights based on a retail sector survey conducted by Nielsen Research and Studies, and reflects the shifts in spending patterns and consumer behavior.

Key points

The report categorized the results into seven (7) categories, with the convenience foods, snacks and bakery categories outperforming the overall food and beverage market growth rate, with bakery growing at over 50%. The snacks, chocolate and biscuits category also achieved strong growth, with chocolate growing at 20%, supported by popular brands.

Meanwhile, the beverages segment saw significant growth in the UAE, with the sports drinks category growing by 15%, despite a 134% increase in soft drinks prices, indicating that smaller players in the beverage market are outperforming industry leaders. The storable food category saw a long-awaited post-pandemic recovery, with sub-segments such as eggs, cooking oils and confectionery growing by 18%, 30% and 21% respectively, with all categories seeing price increases.

The survey indicated that the dairy segment is witnessing a growth rate of 16% on the back of increasing awareness among consumers about the importance of a balanced and healthy diet. At the same time, the frozen food category witnessed a slowdown in overall growth, while frozen meat witnessed a significant growth of 18%, outpacing the overall growth rate of the frozen food category, driven primarily by price improvements.

The baby food industry is facing a challenge as inflation is driving up overall growth through increased product prices. However, overall consumption is declining due to a shift towards mother-to-child and home-made alternatives, coupled with declining birth rates, making it important for the industry to adapt to evolving market conditions.

Commenting on the report, Mr. Saleh Lootah, Chairman of the Emirates Food and Beverage Manufacturers Group, said: “The 2023 Annual Report reflects the resilience and dynamism of the UAE’s food and beverage sector. The sustained growth in key sectors and the emergence of small manufacturers and producers as important contributors to the sector confirm the industry’s ability to adapt to changes. With the transformations driven by economic factors and growing consumer demands, the Annual Report is an important tool for stakeholders in the sector to make their decisions based on comprehensive and detailed information, studies and analyses, which contributes to enhancing and sustaining growth.”

The report also highlights general trends in the sector such as the decline of baby food and infant formula, the growth of organic baby food brands, and the increasing importance of access to consumer brand choices.

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About the Food and Beverage Manufacturers Group in the Emirates

Established in 2012 under the auspices of the Dubai Chamber of Commerce and Industry, the UAE Food and Beverage Manufacturers Group (F&BMG) serves as a unified platform for food and beverage manufacturing companies in the UAE. The group is committed to promoting industry development, providing a platform for companies to address key challenges, foster collaboration and drive innovation. Our mission is to facilitate growth and excellence in the food and beverage industry, encourage innovation and contribute to the development of the sector, its companies and its workers. We aim to improve business by developing a dynamic and collaborative environment for industry professionals.

© Press Release 2023