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Sun 1 Jul 2007 12:00 AM

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Supply and demand

With a growing number of restaurants opening in the Middle East, Ian Thomson, consul and trade commissoner agri-food, from the Consulate of Canada, Dubai, explores current food trends.

When looking at any new market it is important for any business to assess what the benefits are, what the market is like, and where the market is heading in the future.

This is key especially when looking at the foodservice industry in the Middle East, regardless of whether you are a food supplier wanting to import your products, or a restaurant wanting to franchise a casual dining concept.

The need for food imports is vital, as this accounts for around 90% of the Middle East’s total food requirement.

A brief overview of the foodservice industry in the region clearly shows there is a growing demand for all kinds of services. A report by the Council of the Arab Common Market in 2006 for example, showed that by 2010 the gap between food product demand and what is available would widen to 61 million tonnes.

The report stipulated that of this amount, 28 million tonnes of flour, 15 million tonnes of meat and seven million tonnes of milk and dairy products will be needed. The reason for this rise is mainly from the rising population growth and the rising per capita income in the region.

The need for food imports therefore is vital, as this accounts for around 90% of the Middle East's total food requirement. Looking at the GCC region alone, its annual food bill is around US $9 billion, of which the UAE accounts for 60% of this.

Finding a gap in the market

Even though a Muslim country, due to the large expatriate community pork sales are steadily rising, with imports totalling around $12.6 million in 2005. Of this amount though, the frozen food sector captures 91% of the market, with Brazil the dominant provider, and EU suppliers from the UK, Netherlands and Belgium accounting for about 9%.

Looking at other meats in 2005 the UAE allowed the importation of beef from Canadian animals under 30 months old. Working alongside Canadian Halal certifiers, the pool of Canadian beef in the UAE is set to grow to compete with other big suppliers like Meat and Livestock Australia, as the foodservice market currently consumes more than 100 tonnes of beef each month.

Additionally, for 2007 Dubai hopes to attract 6.8 million tourists, with an objective of reaching 10 million by 2010. Alongside this, the number of new five-star hotels opening up is also set to increase, so the demand for top quality beef will rise in line with this.

For the UAE though, the main foodstuff purchased is meat, poultry and fish, which accounts for just over 30%, followed by dairy products, rice, bread, pasta and cereal.

Moving away from specific foodstuffs, the foodservice industry is becoming increasingly aware of the soaring number of diabetes cases, particularly in the UAE and Saudi Arabia. With the UN's World Health Organisation reporting that at least one in every four UAE adults are diagnosed with diabetes, the need for healthy foods is key. In particular ingredients like Canadian peas, beans and lentils, as well as wholegrain, stone ground flour and Sona Pearl Nutri Rice, which is a scientifically engineered low GI aromatic rice are ideal.

Rising numbers of food outlets

While the Middle East foodservice market is estimated to be worth more than $31 billion annually, GCC countries account for around $9.5 billion of this, with the UAE taking the largest share of this market. But looking at what cuisines are proving popular, Asian cuisine is at the forefront with Lebanese food also a firm favourite.

Coffee chains are also showing excellent growth, with a number of Canadian-based companies active in this segment, including Second Cup, Café Supreme, Blenz, Café Ceramique and more recently, Java U from Montreal.

While hotels in the UAE account for 17% of the total foodservice expenditure, due to the growing population and rising rates of private consumption expenditure, casual dining and fast food outlets are also benefiting from the boom.

It is estimated that more than a quarter of UAE residents eat at quick service restaurants at least once a week, and to cater to local tastes companies like McDonald's have introduced meals directly targeting the Middle East market with the McArabia grilled kofta, for example.

In Europe and the US though, consumers are gravitating towards healthier eating options, rather than fast food. And while the Emirates fast food market is estimated to be worth $117 million, the trend in this market is following that of Europe, with the arrival of brands like Yo! Sushi, Gourmet Burger Kitchen and Sumo Salad.

For the future the foodservice industry does look promising, with more hotel restaurants coming online, a growth in franchise opportunities, and the need for more casual dining outlets and quick service restaurants, all meaning more food items and more demand for quality suppliers.

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