By Devina Divecha
Finding the perfect place to set up can be hard for entrepreneurs, says Devina Divecha
Location is one of the bugbears of the food and beverage (F&B) industry. And certainly, many people we spoke to for this month’s mammoth Caterer Middle East issue mentioned it in some respect or the other.
Topics of conversation ranged from whether people make the effort to travel to a restaurant in a potentially far away destination, to the rents people have to pay per square metre. Discussions were had about how location feeds into the outlet concept, and whether brands had advantages being located in a hotel or as a free-standing unit.
I was shocked when I found out the costs per square metre landlords are charging. For entrepreneurs, it makes for an extremely high start-up cost. What it ultimately means is that it’s hard to make money. Obviously profits don’t come quickly, but the amounts that need to be handed over up-front can place a restaurateur on the back foot before they’ve even got to work.
One positive effect of high start-up costs is that it separates the wheat from the chaff — bad concepts won’t get off the ground (unless heavily subsidised).
But those who persevere can look forward to a market with a high degree of trust from consumers, who know that the restaurants adhere to high standards and have a passionate group of individuals behind them.
Right now, we’re seeing the industry wrestle against a set of rules, which admittedly don’t work for all concepts. But that is changing, and it’s a welcome sight for all.
Because while there are limiting frustrations aplenty, high fees and regulations are resulting in inventive approaches. For example, food trucks help entrepreneurs get a respite from rent concerns and avoid the expense of a fixed location.
Whatever anyone may have to say, the UAE is not bureaucratic in the traditional sense of being slow to alter or adapt regulation. Changes that the industry push for can move through the system remarkably quickly — again going back to the food trucks.
Another example is the flexibility with alcohol licenses. Sure, you have to be attached to a hotel — think Pizza Express in JLT, Dubai — but areas like DIFC and Pier 7 are also emerging as hubs where restaurants don’t have to be in a hotel to have a liquor licence. A decade ago — was that possible?
The sentiment expressed by everyone we have featured in this magazine is that they are here to stay. The Middle East is a long-term proposition for them, and by making it their home, the members of the region’s F&B industry are 100% committed to it finally being counted among the foodie capitals of the world. And it’s coming sooner than you think.