Executive Summary

The Food & Beverage industry in the Middle East demonstrated resilient growth throughout March 2025, with notable expansions in sustainable practices, digital transformation initiatives, and regional culinary innovations. This report examines key market trends, regulatory developments, and emerging opportunities across the region’s diverse F&B landscape.

Market Overview

The Middle East F&B sector continued its upward trajectory in March 2025, with an estimated 4.7% growth compared to the previous month. The UAE and Saudi Arabia remained the dominant markets, collectively accounting for approximately 62% of the region’s F&B revenue. Qatar and Bahrain also showed significant growth, particularly in the premium dining and specialty food segments.

Key Growth Drivers:

• Increasing tourist numbers as the region’s post-pandemic recovery solidifies
• Growing middle-class population with higher disposable income
• Rising demand for premium and health-conscious food options
• Technology integration enhancing operational efficiency and customer experience

Trending Segments

1. Plant-Based and Alternative Proteins

Plant-based offerings saw notable expansion across the region, with several new product launches and dedicated restaurant concepts appearing in major metropolitan areas. Local manufacturers have begun producing plant-based alternatives tailored to regional tastes and cuisines, reducing dependency on imports.

Notable Developments:

• UAE-based Alf Farms launched a line of plant-based shawarma and kebab alternatives
• Saudi Arabia’s first dedicated plant-based restaurant chain, Green Plate, opened its fifth location
• Regional supermarket chains expanded shelf space for alternative proteins by an average of 18%

2. Cloud Kitchens and Delivery Services

The delivery-only restaurant model continued to gain traction, with investment in cloud kitchen facilities increasing by approximately 22% compared to February. This growth is driven by lower operational costs and expanding delivery infrastructure.

Market Leaders:

• Kitopi expanded its operations to two additional cities in Saudi Arabia
• Talabat Kitchen launched specialized cuisine hubs in Dubai and Abu Dhabi
• Careem expanded its subscription-based delivery model to three new markets

3. Luxury and Experiential Dining

High-end dining experiences remained resilient, particularly in tourist-heavy destinations. Luxury restaurants focusing on unique, experiential offerings reported an average occupancy rate of 78% for March, up 5% from February.

Trending Concepts:

• Interactive dining experiences combining food with entertainment
• Chef’s table and tasting menu formats with storytelling elements
• Limited-time collaborations between international and local culinary talents

Regional Highlights

UAE

The UAE maintained its position as the innovation hub for the region’s F&B sector. Dubai’s restaurant scene welcomed 17 new international brands in March alone, while Abu Dhabi focused on developing its local culinary identity. The upcoming Expo City Food Festival announced its exhibitor lineup, featuring over 200 F&B brands.

Saudi Arabia

Saudi Arabia’s rapid F&B expansion continued in alignment with Vision 2030 goals. The kingdom saw a 12% increase in restaurant licenses issued compared to March 2024. The focus on developing domestic production capabilities intensified, with significant investments in food manufacturing and agricultural technology.

Qatar

Post-World Cup infrastructure continues to support Qatar’s evolving F&B landscape. March saw the launch of the country’s first restaurant incubator program, designed to nurture local concepts and entrepreneurship in the food sector.

Egypt

Egypt’s F&B sector focused on value-oriented offerings amid ongoing economic challenges. Traditional street food concepts receiving modern upgrades gained particular traction, appealing to both locals and tourists seeking authentic experiences at accessible price points.

Supply Chain and Sustainability

Local Sourcing Initiatives

March marked significant progress in localization of supply chains across the region:

• UAE’s Food Security Center reported a 15% increase in locally produced fresh produce
• Saudi Arabia’s agricultural technology investments yielded expanded year-round production capabilities
• Vertical farming ventures in Qatar and Kuwait announced production capacity expansions

Sustainability Practices

Sustainability initiatives gained momentum throughout the month:

• Over 40 major restaurant groups announced new waste reduction targets
• Compostable packaging adoption increased by approximately 27% year-over-year
• Water conservation technologies saw increased implementation in food production facilities

Regulatory Developments

Several important regulatory changes occurred in March:

• UAE implemented new nutritional labeling requirements for packaged foods
• Saudi Arabia announced simplified licensing procedures for small F&B businesses
• Qatar introduced additional food safety certification requirements for imported products
• Bahrain expanded tax incentives for sustainable food production methods

Digital Transformation

Technology adoption accelerated across the F&B value chain:

• QR code menus and contactless payment solutions reached near-universal adoption in urban centers
• AI-powered inventory management systems reported 30% reduced waste among early adopters
• Blockchain traceability solutions expanded to seafood and premium meat products
• Restaurant reservation platforms integrated advanced CRM capabilities

Investment and M&A Activity

March was active for investments and acquisitions:

• Regional investment in food technology startups reached $87 million for the month
• Three significant acquisitions occurred in the cloud kitchen space
• Private equity interest in specialty food importers and distributors intensified
• Franchise expansion deals brought five new international casual dining brands to the region

Challenges and Considerations

Despite overall positive momentum, several challenges persist:

• Ongoing supply chain disruptions affecting certain imported ingredients
• Rising operational costs, particularly for energy and labor
• Increasing consumer price sensitivity in certain market segments
• Talent acquisition and retention difficulties in specialized culinary roles

Outlook and Opportunities

The Middle East F&B industry is projected to maintain its growth trajectory through Q2 2025. Key opportunities include:

• Integration of regional and international cuisines creating distinctive fusion concepts
• Technology-enabled personalization of dining experiences
• Expansion of premium casual dining formats combining quality with accessibility
• Development of specialized food tourism experiences and culinary routes
• Further innovation in sustainable packaging and food waste reduction

Conclusion

March 2025 demonstrated the Middle East F&B sector’s continued resilience and innovation capacity. The balance between honoring culinary traditions and embracing new technologies and consumer preferences positions the region for sustained growth. Businesses that can navigate regulatory requirements while delivering authentic, quality experiences will be best positioned to capitalize on the evolving market landscape.