MENA Food Service Market Size, Share & Industry Analysis, By Type (Full Service Restaurants [Fine Dining Restaurants and Casual Dining Restaurants], Quick Service Restaurants, Institutes, and Others), By Service Type (Commercial and Institutional), and Regional Forecast, 2024-2032

The MENA food service market size was worth USD 84.77 billion in 2023. The market is projected to grow from USD 92.48 billion in 2024 to USD 189.87 billion by 2032, exhibiting a CAGR of 9.41% during the forecast period.

Food service outlets provide commercial or institutional services with a diversified range of food products based on individuals' culinary and taste preferences. The market is split by type into full-service restaurants, quick-service restaurants, institutes, and others from which the full-service restaurants include fine dining restaurants and casual dining restaurants.

The market’s development is led by the prospering tourism industry, with the UAE, Qatar, Egypt, Iran, and Saudi Arabia witnessing robust growth.  Both private and public sector efforts actively focus on diversifying the tourist base and promoting tourism apart from religious and corporate tourism. Religious pilgrims and foreign workers are driving demand for restaurants in the region, which is expanding due to local cultural preferences. Domestic tourism attractions are also emerging with the evolution of the tourism industry. Furthermore, international consumers often seek Western-style informal dining experiences, mainly European and American cuisines. Dining at domestic fast food and casual restaurants in a Western style is considered a source of entertainment for domestic consumers.

In developing countries such as Iran, Israel, and Gulf countries, restaurants, and hotel facilities are frequently visited by customers for leisure activities, work meetings, and quick meals. Many expatriate professionals rely on food service options on a daily basis due to their hectic lifestyles and extended work hours. Fast food is a popular choice among residents, owing to its convenience and availability of international cuisines and well-known brands. Moreover, manufacturers also provide different varieties of food and beverages through innovation and are using digital campaigns to attract more consumers.

The spread of the COVID-19 pandemic drastically changed various markets and affected different industries, including the food restaurant sector. The stern limitations imposed on dine-in establishments during this period led to the partial or complete closure of many restaurant outlets. Several customers were hesitant to visit dine-in facilities due to fears of contracting the lethal virus. Therefore, the visits to eateries and expenditure on dine-ins declined radically during this period.  

MENA Food Service Market Trends

Rising Concept of Cloud Kitchen in the MENA Countries Influences the Market’s Momentum

A developing and lucrative business concept, ‘cloud kitchens’ has been the catchword in the restaurant business lately. Also known as “dark kitchens” and “ghost kitchens,” they have caused an immense disturbance in the industry and unlocked new gateways for revenue generation.

A popular concept, takeaway services, is already a flourishing business in Asian countries such as India and Singapore. However, in a few years, the enormous growth of this concept has caught the attention of international restaurateurs in GCC countries such as Saudi Arabia, UAE, and Kuwait. The growing number of emigrants, mounting usage of online food delivery companies, and regular changes in consumer preferences are anticipated to encourage the growth of the market. Foreseeing the growth potential in the region, many players are entering this lucrative market to widen their customer reach. At one such instance, in Dubai, Foodlink Global Restaurants & Catering LLC launched a new gourmet cloud kitchen, “Art of Dum,” in February 2023.

MENA Food Service Market Growth Factors

Growing Population Coupled with Increased Spending on Dining Out is Propelling Market Growth

Although the MENA region’s economy is heavily reliant on the oil and gas industry, food & beverages, hotels & restaurants, and food processing are still among some of the top-performing sectors in the region. In GCC countries and major North African nations such as Algeria, Egypt, and Israel, locally produced and manufactured food products are expanding.

Saudi Arabia, the UAE, Iran, Egypt, and Algeria have the highest expenditures on food consumed outside home due to high disposable incomes and a strong consumer preference for expedient, superior, and finest food and beverage products. While the native food industry is flourishing and unsaturated, the sector is primarily dependent on imports for raw materials due to the region’s inadequate agronomic resources.

Significant factors boosting the market in the MENA region include, growing populations, rising demand for processed foods, increasing per-capita income, and enhanced production capabilities. According to UNICEF (United Nations International Children’s Emergency Fund) data, between 2015 and 2030, Iraq and Bahrain’s population is expected to grow by nearly 50%. Other countries in the MENA region, such as Syria, Sudan, and Oman, are projected to grow by almost 40%. This population growth is expected to offer numerous growth opportunities for the market over the forecast period.

Growing Number of Tourist Visits and Food Tourism to Boost Local Food Service Businesses

The tourism industry greatly benefits local, state, and national economies. In the past, tourists sought experiences that allowed them to visit monuments, museums, and other sites of national significance. However, over the years, tourists have gravitated toward cultural experiences where individuals immerse themselves in the cuisine and lifestyle of a culture.

Culinary tourism is undertaken by people seeking culinary experiences to expand their understanding of a culture or lifestyle while traveling. Culinary tourists engage in tours that broaden their palates and provide them with the knowledge necessary to identify the connections between cuisine and local customs. They seek authentic culinary experiences that expose them to new flavors, textures, and traditions. The World Food and Travel Association, in its recent study, found that 80% of travelers look for dining options when traveling to a new destination.

From 2012 to 2018, culinary tourism became mainstream through the influence of social media platforms and culinary TV shows featuring famous chefs and restaurants.

The widespread popularity of television cooking shows and related social media has impacted local industries and become a catalyst for an increase in culinary tourism. Social media platforms such as Facebook, Instagram, and YouTube are extremely popular among millennials and Generation Z, who use them to document their experiences. In turn, the marketing departments of food and beverage companies leverage social influencers to promote their restaurants, products, or food festivals, gaining visibility and reaching a mass audience that translates into profits.

RESTRAINING FACTORS

Food Inflation and High Dependency on Imports are Major Challenges Restricting Market Growth

GCC countries are located in arid regions with limited renewable water resources due to scarce rainfall. The region’s natural resources have come under significant pressure and depletion due to unchecked economic and demographic development, poorly planned rapid urbanization, high resource consumption, and expansion of irrigation systems on local farms. The situation is expected to worsen due to problems caused by climate change. The resulting environmental challenges could limit future growth potential and expose the region to a variety of natural and artificial ecological risks.

The World Bank reported that from March to December 2022, food inflation averaged 29% in 16 MENA countries, outpacing the overall annual inflation rate of 19.4%. The World Bank also warned that nutritional decline caused by rising food prices will have long-term consequences for children’s development and prospects. The MENA region's economies range from high-income oil exporters in the Gulf Cooperation Council (GCC) countries, to conflict-affected nations such as Yemen, developing oil importers such as Jordan, and developing oil exporters such as Iraq.

In Iran and Egypt, annual food inflation exceeds 61%, making it challenging for families to afford essential food items such as rice, bread, and vegetables. With food inflation reaching new heights every year, consumer spending on food consumed outside the home will also be hampered by the reduced number of restaurant outings, lessened spending on food consumed outside of the home, and increasing food prices in food outlets.

MENA Food Service Market Segmentation Analysis

By Service Type Analysis

Consumers' Growing Interest in Restaurant Dining to Boost Demand for Commercial Food Service Outlets

On the basis of service type, the market is segmented into commercial and institutional. The commercial and institutional catering service providers in the MENA region do share similarities in terms of food preparations and service. However, they differ in terms of distinct consumer segments, business models, menu offerings, service styles, revenue sources, and market dynamics.

The commercial food service provider holds the highest share of the MENA region owing to their target audience, which are individuals, tourists, families, and others, thus catering to a diverse range of consumers with varying tastes, preferences, and dining habits. As per Fortune Business Insights’ competitive analysis, KFC, Pizza Hut, Domino's, Al Baik, Hardee's, Krispy Kreme, TGI Friday's, Starbucks, and Peet's Coffee are some of the major restaurant chains operating in the commercial segment.

Institutional catering service operators serve organizations such as hospitals, corporations, schools, and others, thus catering to a captive audience type that has predetermined meal requirements. The concept of institutional catering through schools, colleges, and hospitals, which was only present in urban areas, is now expanding in rural areas and tier 2 and tier 3 cities. With the expansion of institutes' catering services in such cities, the institute-level food service market offers lucrative growth opportunities that will support the MENA food service market growth.

By Type Analysis

Higher Share of Full-Service Restaurants will Boost Market Growth

On the basis of type, the market is divided into full service restaurants, quick service restaurants, institutes, and others. Full-service restaurants are further sub-divided into fine dining restaurants and casual dining restaurants.

The Full Service Restaurants (FSRs) segment holds the major MENA food service market share owing to their complete dining experience with table service, extensive menus, and often an ambiance suitable for leisurely dining. These restaurants cater to an assorted range of cuisines, including traditional Arabic, Mediterranean, Asian, and Western. In urban areas, upscale FSRs are popular for business meetings, family gatherings, and special occasions. The rapid growth in tourism in the Middle East and Africa regions has been a substantial factor driving the full-service restaurant growth in the area.

Quick Service Restaurants (QSRs) focus on providing fast, convenient meals with minimal table service. They typically have limited menus and emphasize efficiency in food preparation and service. International chains such as McDonald's, KFC, and Burger King have a substantial presence in the MENA region, alongside local brands offering fast food options. Cafés and coffee shops are prevalent throughout the MENA region, offering a relaxed environment for socializing, working, or enjoying a leisurely coffee break. These establishments often serve light meals, pastries, and a variety of hot and cold beverages, including traditional Middle Eastern coffee and tea.

The institutes' types include the canteens and catering services available at institute levels, such as hospitals, schools, colleges, and movie theaters. This type of food consumption is a comparatively new trend in comparison with traditional full-service restaurants and fast food restaurants. Other segments in this category include services provided by food trucks, individual shop owners, and cloud kitchen services.

REGIONAL INSIGHTS

The Middle East and North Africa market has experienced several notable shifts in consumer trends in recent years. Similar to global trends, consumers in the MENA region are increasingly concerned about their health and well-being. Healthy food options such as organic, low-fat, and gluten-free choices have a growing demand. Restaurants and food service providers are responding by offering more nutritious menu items and clearly labeling nutritional information. There's a rising preference for casual dining experiences among consumers in the MENA region. While traditional dining remains popular for special occasions, many consumers are opting for more relaxed, informal settings for everyday dining. This trend is driving the growth of cafes, bistros, and fast-casual restaurants that offer a combination of quality food and a laid-back atmosphere. For instance, in December 2023, Algham Industries announced that the company opened 17 new Costa Coffee stores in the country.

The adoption of digital technologies, including online ordering platforms and food delivery apps, is transforming the food service landscape in the MENA region. Consumers are increasingly using these platforms to order food for delivery or pickup, especially in urban areas where convenience is highly valued. As a result, restaurants are investing in technology to enhance their online presence and streamline the ordering process. Consumers in the MENA region have a strong appreciation for authentic and diverse cuisines. They seek out restaurants that offer traditional dishes prepared with high-quality ingredients and authentic flavors.

Social responsibility and environmental awareness have become significantly important to consumers in the MENA region. There's a growing demand for sustainable practices, such as environmentally friendly packaging, locally sourced ingredients, and ethically sourced products. Restaurants and food service providers are responding by adopting more sustainable practices throughout their operations. Busy lifestyles and urbanization have led to a greater demand for convenient dining options in the MENA region. Food trucks, grab-and-go outlets, and street food vendors are becoming more popular, catering to consumers looking for quick and convenient meals while on the move. Owing to this trend, major developments can be observed in the food service sector. For instance, "Under500", a healthy food eat-in home delivery company recently acquired by one of the leading cloud kitchen startups "Kitopi," announced its plans to expand its presence in Qatar.

Overall, the industry is evolving to meet the rapidly changing consumer needs and preferences, with a focus on health, convenience, authenticity, and sustainability. Businesses that are able to adapt to these trends and offer innovative dining experiences are likely to succeed in this dynamic market.

KEY INDUSTRY PLAYERS

Key Market Players to Emphasis on New Product Launches to Stay Competitive

The MENA food service market size is experiencing substantial growth owing to the growing number of key players operating in the market, such as Burger King, McDonald's Corporation, Pizza Hut, Taco Bell, and others, who frequently update their food offerings. This comprises the launch of traditional and combination dishes that offer an exceptional taste experience to consumers. Restaurants are also bringing new products precisely targeted to vegan customers.

List of Top Food Service Companies in MENA/ List of Top Food Service Companies:

• Starbucks Corporation (U.S.)


• Yum! Brands, Inc. (U.S.)


• McDonald's Corporation (U.S.)


• Restaurant Brands International Inc. (Canada)


• Domino's Pizza, Inc. (U.S.)


• ALBAIK Food Systems Company (Saudi Arabia)


• Aura Hospitality & Food Services (Qatar)


• Kitopi (UAE)


• Chicking (UAE)


• Kout Food Group (Kuwait)

KEY INDUSTRY DEVELOPMENTS:

• December 2023:  The Ritz-Carlton announced that it would launch its new resort in the second half of 2024, which is inspired by a super yacht. The new resort is designed to cater to the exponential growth in the travel industry and increased tourism in Dubai.


• October 2023: Roboost, a delivery management startup based in Egypt, announced its partnership with McDonald’s Egypt to automate the last-mile delivery cycle. This collaboration aims to improve McDonald’s delivery and supply chain management in Egypt and reduce operational costs.


• September 2023: ACCOR announced its ambitious plan to further expand its presence in North Africa with a robust pipeline across key brands, including Pullman, Mövenpick, and Swissôtel. In North Africa, the group is ready to launch a mix of resorts and hotels.


• July 2023: An Indian food tech startup announced the launch of its two new cloud kitchens in Riyadh. Rebel Foods is the parent company of brands Faasos, Behrouz Biryani, Oven Story Pizza, and more. This launch made it the first Indian food tech startup to enter the Middle Eastern market.


• December 2022: The Riyadh-based food technology company “Matbakhi” announced its launch with a cloud kitchen concept to cater to the increasing online food delivery trend in the country.

REPORT COVERAGE

The report provides qualitative and quantitative insights into the market. It also offers a detailed analysis of its type, service type, market size, and growth rate for all segments. Along with this, the report offers an elaborative analysis of the market dynamics and competitive landscape. Various key insights presented in the report are an overview of related markets, secondary and primary research methodology, recent industry developments, such as mergers & acquisitions, the regulatory scenario in critical countries, and key industry trends.

Report Scope & Segmentation