How to build a successful food business in the Middle East

The food and beverage (F&B) industry in the Middle East is facing a number of challenges that are making it increasingly difficult for businesses to succeed. But our message to any business with the ambition to take up space in this market is simple:

Don’t be discouraged.

The reality is that food isn’t an easy industry anywhere in the world. But one thing we know for sure is that food people are passionate people – and with straightforward strategies and clear goals, passionate people can build thriving food businesses in the Middle East.

What are the challenges F&B businesses face in the Middle East?

One of the biggest obstacles to businesses that want to grow in the region is the competition between international chains and local independent restaurants. In 2021, for example, data collected by Statista showed that an American restaurant chain (and international franchise) called Pizza Hut had 222 food outlets in Saudi Arabia, and 106 in the UAE – placing immense pressure on smaller businesses that operate with higher costs.

With the rise of food delivery services, customers also have more options (and more convenience) than ever before; so it’s harder for F&B businesses to stand out from the crowd and build a loyal following.

Then there’s the hike in food prices. The cost of food in the UAE increased 4.83% in May 2023 compared with the same month in the previous year. And according to the World Bank, inflation accounts for up to 33% of food insecurity in the MENA region in 2023. The increasing cost of ingredients, coupled with the high cost of labor and rent, is making it difficult for F&B businesses to maintain profitability. This has led to a number of businesses closing their doors – as they’re simply unable to compete with cheaper options.

And while many regulations in the region have been developed with sustainability and positive change in mind, regulatory changes do also create new barriers to entry (or barriers to success) for food businesses. In Saudi Arabia for example, new food safety regulations under the Saudi Food and Drug Authority (SFDA) are putting greater pressures on businesses to adhere to specific production and handling practices, while stricter labeling requirements mean that packaging must be compliant before a product can go to market.

These regulations are a good thing for consumers, and for the food industry in general. But they require businesses to have in-built agility in order to adapt quickly enough, and with minimal cost impact.

How can F&B businesses be successful in this region?

In spite of challenges (and let’s face it – no region in the world is smooth sailing for F&B), the Middle East holds huge potential for businesses that do their research and understand how to build resilience and success here.

Here are three straightforward tips for growing a successful food business in the Middle East:

1. Never cut corners on quality. Whether you’re selling a gourmet dining experience or doorstep food delivery, offer consistently high quality products and services. In a market with so much competition, it is important for F&B businesses to differentiate themselves by offering unique and delicious dishes, and excellent customer service.
   
2. Stay on top of industry trends and adapt to changing consumer preferences. This could mean offering more plant-based options, incorporating locally sourced ingredients, or offering healthier choices. By staying up to date on the latest trends, F&B businesses can better meet the needs of their customers and stay ahead of the competition.
   
3. It’s not just about what you serve – it’s about how you serve it, and who you are. Focus on building a strong brand and creating a loyal customer base. This could involve offering loyalty programs, regularly engaging with customers on social media, and consistently delivering on the brand promise. By building a strong brand, F&B businesses can establish a loyal customer base that will continue to support them, even in the face of competition.

By adopting these strategies, you can stand out from the competitive crowd and be the calm, confident food business that wins the heart of its customers.

InFlavour is the global B2B F&B event that creates space for the entire industry to come together. Source those quality products, be inspired by trends that work for your business, and take home strategic insights to help your business grow sustainably in the Middle East and around the world.