Dubai has a vibrant dining and hospitality culture with restaurants popping up in almost every corner, yet most of the food served in these restaurants is imported. Food and beverage (F&B) products form a large chunk of imports as there is very little arable land in the Emirate to support domestic demand. Dubai imports almost 80-85% of its F&B products from around the world.
The F&B sector is turning out to be significant as the Dubai Government plans to enhance its exports and reduce its import dependency. Farm suppliers, farms, F&B processors, logistics, and retail outlets for food form the value chain. Frost & Sullivan predicts the emergence and explosive growth of the Halal food industry as a Mega Trend.
Farm supplies, such as animal feed and seeds, are mostly imported and only agricultural equipment and fertilizers are manufactured in Dubai. In order to expand the market, a large land bank is required for forage pressing, production plants, and milling plants.
Food processors have been operating in Dubai since the eighties and the sector is showing significant growth. An important reason for this is its highly developed infrastructure and markets which offer competitive advantages, even to new entrants. Strong FDI inflows into the sector, especially in the free zones, have also helped. The increasing focus on sharia compliant Halal foods and the proposed Dubai Industrial City (DIC), a 6 million-sq-foot halal cluster, is expected to capitalize on the food processing market in Dubai. Dubai’s vision of becoming the global capital of the Islamic economy and increasing global awareness about Halal foods is expected to boost the Halal food industry.
Logistics operations in Dubai play a major role in the F&B sector as Dubai imports over three quarters of its F&B products. It is estimated that of the more than 10 million tons of food mobilized within the UAE each year, including imports and local production, about 3.27 million tons is wasted. So Dubai is now focusing on intelligent food logistics to maximize asset utilization and minimize food waste and costs.
Innovation is the need of the hour in Dubai’s arid environment as there is an ever increasing demand for quality food. Methods like indoor vertical farming, Hydroponics and Aquaponics can help to boost domestic produce. The Gulf Cooperation Council’s (GCC) first indoor vertical farm is now in operation in the Al Quoz area of Dubai.
The United Arab Emirates (UAE) is expected to become the second fastest growing food market in the GCC at a CAGR of 4.4% during 2017-2021.
