Despite the momentary decline of the food and beverage industry across the world, it’s safe to say that it’s back on its feet again, with the Middle East right at the forefront. Not only is the region home to sought-after tourist locations, but it is also among the world's fastest-growing food and beverage markets. 

Let's take a look at the prominent trends and spending patterns among the two most regionally important parts of the Middle East, UAE, and KSA.

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Consumer Are Finally Spending More

While it is true that consumer spending in both Saudi Arabia and the UAE has significantly increased, it has also come to the world’s attention that spending patterns have been emerging in various different flavors, especially over the last two years.

For example, according to an analysis conducted by the global management consulting firm, consumers in both Middle Eastern countries had significantly reduced their level of cutback. This was in comparison to the previous year, when they had tightened their belts in anticipation of potentially tougher times during the pandemic.

How Have the Buying Patterns Changed?

Over the last few years, inhabitants of KSA and UAE have shown increased sobriety in their spending. This entails that not only has their dependency on online channels sky-rocketed, but they have also started resorting to the option of delivery more than ever. 

These vulnerabilities account for only some of the many new behaviors observed within the changing atmosphere.

According to a study by AlixPartners, more shoppers are ordering their groceries online, with the majority of them looking for greater value for money. At the same time, thanks to the growing health and wellbeing consciousness, people in the UAE and Saudi Arabia are much more inclined towards healthy options as compared to a few years ago.

Moreover, consumers in both countries have started tilting towards environmentally friendly products and an overall reduced consumption pattern. In the UAE alone, consumers have shown a great interest in purchasing eco-friendly products that are sustainable, recyclable and compostable.

There are also many other factors that have greatly influenced buying decisions, such as:

• Energy and water consumption
• Reusable packaging
• Single-use plastic

The 2020 Analysis

According to an analysis by Frost and Sullivan, there were extremely high hopes for steady growth within the food and beverage market in both the UAE and Saudi Arabia. In the UAE alone, the expenditure on F&B was expected to increase from $34.6 billion in 2019 to $37 billion in 2020.

"The key determinants of the growth of F&B markets in the UAE and KSA are the convenience of online food platforms, rising health awareness, and of course, product differentiation," stated Prithviraj Roy, Frost & Sullivan's Food & Nutrition Consultant.

Unbeknownst to many, cereals have also appeared to be the most popular food item consumed in both countries, followed by meat-based products, dairy products, and fruits and vegetables.

According to the same analysis, one of the best ways to help market leaders attain higher revenues and margins is by focusing on gluten-free, whole-wheat, and organic products. This is because the demand for organic and balanced food has naturally increased over the course of time, thanks to governmental attempts and increasing awareness about curbing the intake of unhealthy food items.

How Must the Vendors Look Forward to?

Here are some opportunities that vendors must pay attention to in order to keep up with the changing trends within consumer spending:

• Both countries are witnessing a rapid change in lifestyles. Hence, the demand for packaged food is surging at a very high pace.
• The influx of expats into Dubai has further contributed to the growing diversity of cuisines and awareness of organic food. This calls for greater inclusion and variety, especially with regards to organic products.
• Both UAE National Food Security Strategy 2051 and Saudi Vision 2030 have a mutual goal of achieving food sufficiency and security by concentrating more resources into domestic production.
• Foreign investors are showing great interest in the meat processing, dairy, and confectionery segments of the market in both countries.
• Providing consumers with a unique experience requires vendors to be mindful of the fact that more and more youngsters are financially independent, which is essentially driving their need for more premium products in the market.

What Trends Can We Look Forward to?

Nutrient-Rich Menus

We cannot disregard the fact that the way people approach the concept of dining out today is far different from how they used to, only a few years back. With more and more people becoming balanced in their eating habits, it’s imperative for restaurants to focus on nutrient-rich menus. They must rethink their strategy to cater to these changes and offer healthy options and diverse menus.

Farm-to-Table Revolution

Ever since the trend of supporting local farmers and producers has gained momentum, restaurants across the UAE have started using seasonal produce to the best of their abilities. In fact, the farm-to-table revolution that the world collectively wishes to look forward to is only possible if eateries invest in organic and sustainably-grown produce, something that the new generation of consumers values to a great extent.

Higher Quality Experience

According to a report by JLL, customers value a higher quality experience more than anything else, at least in Saudi Arabia. There has also been a shift from fast food to fast-casual food, assisting the development of more food halls and entertainment options as opposed to congested food courts within malls.

Moreover, thanks to a growing number of young individuals with high disposable incomes, Saudi Arabia is now home to the largest domestic food and beverage market in the GCC (Gulf Cooperation Council).

The Bottom Line

In the end, we can safely conclude that while both UAE and KSA may have strategic differences, their consumer spending patterns are quite alike. Consumers in both countries have started drifting towards healthy and sustainable eating, encouraging more eateries to incorporate seasonal and organic produce within their menus. At the same time, consumers in both countries are also spending more on food, mainly because of the region’s thriving economy.

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