Middle East And North Africa (MENA) Out Of Home Dining (OOHD) Market, & Region): Insights and Forecast with Potential Impact of COVID-19 (2023-2028)

Middle East And North Africa (MENA) Out Of Home Dining (OOHD) Market, & Region): Insights and Forecast with Potential Impact of COVID-19 (2023-2028)

Market Insight:

The out-of-home dining sector (OOHD) is concerned with the provision of food services. It is an important aspect of the hospitality industry. Meals are typically served and consumed on-site, but many Out of Home Dining establishments/restaurants also provide take-out and food delivery services.

The global foodservice industry is seeing an increase in demand for healthy foods with creative presentation. Consumers are increasingly influenced by a restaurant's food quality and service experience. The emergence of new communities and projects, favourable consumer demographics, changing consumer preferences, a growing tourism sector, and rising consumer demand for convenience and high-quality meals at reasonable prices are all expected to drive the MENA out-of-home dining market. The Middle East and North Africa (MENA) out of home dining market is projected to reach US$49.30 billion in 2023, growing at a CAGR of 10.66% over the projected period.

Segment Covered:

• By Segment: In terms of segment, the report provides insights of the Middle East and North Africa (MENA) out of home dining market into five segments: full-service restaurants (FSR) and casual dining, quick service restaurants (QSR), indulgence outlets, coffee shops and others. The full-service restaurants (FSR) and casual dining segment held the highest share in the market. Full-service restaurants can offer better customer service and healthy food according to the demand of the customers. High end restaurants for formal and casual dining are becoming the main choice of consumers in the recent years. In addition, lower cost and casual dining full service restaurants have been gaining increasing momentum, especially in developing economies, amid the spike in working population and rapid penetration of dine-out culture.

Geographic Coverage:

According to this report, the Middle East and North Africa (MENA) out of home dining market is divided into four core regions: Kingdom of Saudi Arabia (KSA), Egypt, United Arab Emirates (UAE) and Kuwait. Kingdom of Saudi Arabia (KSA) held the major share in the market, followed by UAE. The high levels of disposable income which prevail among the Saudi population, coupled with the harsh climatic conditions in the country and the relatively limited range of other pastimes and leisure activities, make eating out and shopping the entertainment of choice for a large segment of the Saudi population propelling the overall OOHD market.

The report also provides the detailed analysis of the Kingdom of Saudi Arabia (KSA), United Arab Emirates (UAE), Egypt and Kuwait Out Of Home Dining market by segments (full-service restaurants (FSR) and casual dining, quick service restaurants (QSR) and other OOHD). The makeup of the OOHD sector varies among markets. Owing to increased disposable income and growing tourism sector, FSR and casual dining are the largest segments in KSA and the UAE, followed by QSR. In contrast, QSR dominates in Kuwait and Egypt with FSR and casual dining coming in second as the Kuwait and Egypt has inclining young and urban population, thus exhibiting higher fast-food consumption among them.

Top Impacting Factors:

Growth Drivers

• Rising Disposable Income
• Rapid Urbanization
• Young Demographics
• Flourishing Tourism Sector

Challenges

• Regulatory Intervention & Change In Consumer Tastes And Preferences

Trends

• Increasing Penetration of Smartphones
• Increasing Share of Chained (Organized) QSR Restaurants
• Digitization Of Out Of Home Dining
• Adoption of Western-style Meals
• Driver: Flourishing Tourism Sector

OOHD in the core markets was boosted by expanding tourism. Middle East and North African countries like Egypt and UAE are popular tourist destination. Furthermore, Saudi Arabia being a religious pilgrimage centre is a prominent tourist destination in the MENA region. This has positioned the countries to welcome new investors. Moreover, the increased tourism promotes the ethnic food and culture, thereby promoting the small and mid scale restaurants to propel. Also, expanding tourism is expected to further flourish the QSR segment with increased consumption of fast food among the tourists.

• Challenge: Regulatory Intervention & Change In Consumer Tastes And Preferences

Lifestyle-related diseases are increasingly becoming a major concern in the MENA regions and any government-supported plans for encouraging the adoption of healthier food habits can have a negative impact on the fast food restaurant business. Health and hygiene is of paramount importance in this industry and any breach of related regulations implies a risk to the company as well as the brand image. Regulation on disclosures of calorie counts, additional nutritional information and restrictions on the use of certain ingredients can have a negative impact on revenue and margin of the respective company. The out of home dining market is a part of food and beverage industry. The industry operates in the fast food and indulgence segment, which inherently implies health risks for its consumers. Fast food and indulgences are some of the primary causes of lifestyle-related diseases such as diabetes and obesity. Changes in consumer preferences away from fast food and indulgences and the company’s inability to adapt to this change can have a negative impact on revenue.

• Trend: Adoption of Western-style Meals

The MENA out of home dining (OOHD) market has witnessed a dynamic change in the dietary patterns. With growing globalization, the Americanization of the food culture has come into existence. Adoption of Western-style meals into day-to-day life is driving the continued roll-out of international QSR chains as well as local brands. Fast food chains with burgers, pizzas and sandwiches on their menus have been driving the dietary patterns among millennial population, thus flourishing the overall OOHD market in the Middle East And North Africa region.

The COVID-19 Analysis:

The sudden outbreak of the COVID-19 pandemic has caused a significant strain on the growth of the Middle East and North Africa out of home dining market. Strict measures to contain the spread of the virus during the pandemic adversely impacted tourism, consumer mobility, and purchasing behaviors. The subsequent economic shock, which was accompanied by store closures and global supply-chain disruptions, temporarily halted the rise in the OOHD consumer demand. Within OOHD, the pandemic had a more detrimental impact on FSR than on QSR. FSR struggled to adapt to the needs of the home delivery and drive through channels. In 2020, FSR experienced a sharper fall in sales than QSR.

Analysis of Key Players:

The market for OOHD is severely fragmented. The largest players control only a small portion of the market, and there are many small participants. The key players in the MENA out of home dining market are:

• Emirates Fast Food Co.
• Americana Restaurants Ltd.
• Herfy Food Services Co Ltd
• Alshaya Group
• AlBaik
• Al Maousherji Catering Company
• Alamar Foods Company
• Cenomi Retail (Alhoikar)
• Seazen Group
• Al Farooj Fresh
• Al Tazaj
• Caesars Group Of Companies

The MENA restaurant industry has low entry barriers, as evidenced by the modest capital requirements and straightforward operations. Consequently, small, or sole proprietorship operations dominate the industry. Food preferences are typically determined by local consumer demand, thereby adding to the fragmentation of a largely local business. The diverse nature of the GCC population generates high demand for ethnic food specialties and international cuisine, further contributing to a localized, segmented market.