In a country where 90% of food and beverage products are imported, the opportunities available to Australian exporters are ripe!
The recent Gulfood exhibition, held from 13-17 February and the largest annual food and beverage sourcing event in the world, saw participants from over 120 countries and 4000 companies come together to mobilise food trade in the UAE and beyond.
Population & Economy Overview
The UAE is currently Australia’s largest market in the Gulf region. And with a population of 9.6 million and a per capita GDP of US$43,103, the market is certainly large enough to warrant the effort! The population is also very diverse, with 88% made up of expats including from countries like Australia, EU and South Africa. Meanwhile, the economy continues to grow, driven by the UAE’s rich natural resource base and strong tourism industry, which is currently on display throughout the 2021 World Expo in Dubai, which is set to conclude this month.
The Emirati Consumer
So, what does the Emirati consumer look like? Boasting a high disposable income and young consumer base, they’re always willing to try new food products. This may explain why there’s such a high demand for imported foods, which is also supported by the high number of affluent foreign residents that call the UAE home. Meanwhile, the country is highly urbanised, with 86% of residents living in cities. This translates into growing demand for convenient meal options as urban lifestyles become increasingly hectic.
An Open Economy
The UAE maintains one of the most globalised economies in the world, with over 30 bilateral investment treaties and membership of the World Trade Organisation. Exporters will also be glad to hear that UAE scores well on the Ease of Doing Business Index, ranking 16th globally, while they maintain a strong logistics network, which is ranked 11th globally.
Plus, the fact that the UAE relies on agrifood imports for 90% of its food requirements is a testament to its openness to trade! This tradition of welcoming trade goes back to early Gulf history, when ships sailed to India along the East African Coast. However, it’s important to note that this openness to trade in the modern world creates an intensely competitive market, so exporters need to differentiate themselves with a unique offering.
Trending Food & Beverage Categories
And, where exactly does the opportunity for Australian food and agribusinesses lie? Overall, the UAE’s food and beverage industry is valued at over US$22.6 billion, with this figure set to rise to US$32.5 billion by 2026. Perishables like fruit and vegetables, meats, deli and bakery products have seen significant movement over the past few years. Pre-prepared and frozen foods are also growing as rising urbanisation creates a time-short consumer base. And significant growth will occur in dairy and soy food, pasta and noodles, soups, seasonings, dressings and sauces.
A Spotlight on Healthy & Organic Food
Healthy, functional and organic products are trending in Dubai among expatriates and UAE nationals alike as nutritional awareness and the trend of eating for wellness increases. In fact, a recent PwC survey indicated that 84% of respondents are focused on adopting a better diet. As is the case in many global markets, Emirati consumers are also interested in Australian products, due to the quality of foods on offer, especially in the high-value processed foods sector. The health and wellbeing trend extends to foodservice providers, who’ve introduced specialty foods including organic juices, alternative milks and low-calorie options. So if you’re in the health food, organic or premium space, be sure to consider the UAE as your next export market!
Key Channel Insights
When we look at retail food & beverage channels in the UAE, we can see this area is dominated by hypermarkets and supermarkets, which together account for 78% of total grocery sales. Plus, as urbanisation accelerates and the demand for convenience grows, consumer preference for modern retail outlets continues to grow.
On the foodservice side, operators continue to struggle amongst a dampened economic environment, brought about by the COVID-19 crisis in 2020. Despite a decline in foot traffic, the UAE’s competitive foodservice landscape continues to evolve with independent foodservice providers largely outperforming chained operators due to their innovative menus and tech savvy.
As we’ve seen on a global scale, COVID-19 also saw a rapid shift towards e-commerce in the UAE while grocery retailers also adapted their offerings to include extra large pack sizes, health-oriented product innovations, and a greater variety of free-from products. Meanwhile, the wellness trend was also felt in the health and beauty segment, with operators increasingly stocking immune boosting products.
So, whether you’re an alcoholic beverage consolidator or organic food manufacturer, be sure to consider the UAE, with its open economy, internationally curious consumer base, and high income population, as a potential market to achieve your global growth ambitions.
If you feel the UAE represents the right opportunity for you, be sure to get in touch with the Export Connect team to find out more and develop your export strategy!
We hope you’ve found these insights on the UAE market helpful. As always, if you’ve got any questions or want to discuss export opportunities for your company, feel free to drop us a line at Export Connect – we’d love to hear from you.