The brick and mortar food and beverage (F&B) sector in the UAE is set for a strong comeback post-pandemic, with traditional formats getting replaced by newer and innovative concepts and entry of more experienced competitors, a sector expert predicted.
The soon-to-be opened Expo 2020 Dubai is expected to further fuel the recovery of the sector, with onsite sales of F&B products projected to rake in $545 million during the six-month period, which is estimated to see around 85,000 meals served per hour during the mega event.
“There is something unique about the in-restaurant dining experience that can never be reproduced through delivery, though the ‘convenience’ factor will help the online players to continue to take a portion of the market share, as we are seeing globally,” Panchali Mahendra, Dubai-based managing director of Atelier House, a hospitality advisory, development and operations management firm, told Arabian Business.
“F&B has always been recognised as a highly competitive industry – it is for this reason that the UAE brick and mortar concepts may be replaced by newer, better [ones] or more experienced competitors – but will always have the opportunity to thrive,” added Mahendra, who is the first woman in F&B and the hospitality industry to receive the UAE Golden Visa.
However, Mahendra, who played a pivotal role in Atelier bringing the internationally acclaimed Michelin star restaurant Marea to Dubai, and launching an ethnic Indian brand Mohalla, said the fine-dine players need to upgrade their digital capabilities due to the increased industry challenges brought in as a result of the pandemic.
“We have also seen the emergence of many food aggregators and cloud kitchens,” she said.
Mahendra said the UAE was becoming a major hub for F&B trade in the Middle East and North Africa (MENA) region with over 20,000 restaurants, and according to the UAE National Food Security Strategy 2051, the country has set a target of getting into the top 10 of the Global Food Security Index, achieving economic returns of up to AED 22 billion in the food sector by this year.
Mahendra, however, cautioned that it may take another two years for the pandemic-battered brick and mortar F&B sector to regain its pre-pandemic prime position in the UAE. “While the occupancy rates for hotels [in the UAE] indicate that tourism is increasing, we may not see a real return to normal [for the F&B sector] for the next two years.”
Onsite sales of F&B products projected to rake in $545m during the six-month period.
Mahendra said though the pandemic has hit the industry very badly, the players who reacted with creativity and clever marketing could come out relatively unscathed.
“[At Atelier] we worked on creating and adding that extra emotional touch through delivery – whether it was handwritten notes, creative packaging or assurance of quality and handling. We wanted our clients to still be able to take an essence of in-dining in their home,” said Mahendra, who was featured in the Power 50 and also in the Power women list consecutively in 2020 and 2021.
But she warned that there is still no formula or sure shot action plan for the industry to beat another disruption like the pandemic, though restaurateurs were initially finding support in sharing ideas in open platforms to face the early Covid chaos.
“There isn’t much you can prepare for except to maintain deep pockets for an emergency. You really just have to react,” Mahendra said.
As for the importance of the forthcoming Dubai Expo, Mahendra said: “This event will offer large opportunities in F&B sector as the Expo is expected to host 25 million visits, with the estimated onsite sales of F&B products expected pegged at $545m during the six-month period.”
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