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The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation and circumstances. © 2016 KPMG Lower Gulf Limited and KPMG LLP, operating in the UAE, member firms of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Publication name: Hungry for more? Publication date: September 2016 Profitable and sustainable growth Competition for good locations Staff attrition High rents What do operators say about food festivals? What is on the radar... Food festivals don't generate much revenue - but will continue. Food festivals are a great opportunity for smaller (and newer) operators to offer new concepts I don't think food festivals do anything for the F&B sector. New brands and concepts are introduced during food festivals. We see reasonable bookings from these apps. We don't track volumes separately but we know they contribute. Food apps do not contribute much to our business. Yes, we are already listed on all the food apps in the market. No - although we are listed. No - we aren't listed. Choice 1 Choice 2 Choice 3 Deals influence my choice I only look for deals for cuisines I like I rarely, or never, use deals I only look for deals from the restaurants I know I only look for deals on special occasions and am not too particular about the restaurant or cuisine Yes No Choice 1 Choice 2 Choice 3 Book tables at restaurants Find a restaurants to try Look for discounts, promotions, or deals Look for directions to restaurants Order meals Read a restaurant reviews Write restaurant views 42 39 19 238 146 126 112 125 149 124 142 178 7 55 Hungry for more? KPMG 2016 UAE Food & Beverage Report Takeaway 1: The UAE's F&B market remains resilient and the outlook is robust in the longer term. F&B operators continue to invest with an eye on the future. Consumer preferences are relatively consistent. Differentiating on quality and customer experience is crucial to stand out from an increasing number of available choices. Takeaway 2: F&B businesses understand the importance of engaging with their customers – and are getting better at it. Using data and social media effectively offers significant competitive advantages. Takeaway 3: Innovation is impacting the market as a whole but there seem to be very few individual disruptors that are having a marked effect - getting the basics right is still key. Takeaway 4: While there are numerous F&B opportunities across the UAE, there are also a number of challenges, which are multifaceted and substantial. Takeaway 5: Number of outlets Revenue (AED million) The UAE’s food & beverage market 2015 2020 2015 2020 16,234 19,053 52,399 81,960 1.2x 1.6x Source: Euromonitor 9% 63% 28% Spending more No change Spending less How has your average spend changed compared to last year? Operators have a positive view of the market in the longer term – although there are significant challenges in the shorter term: In a market that offers overwhelming choice, quality – of ingredients, service and cuisine – is a differentiator which adds significant competitive advantage. Rents are rising. I am losing some of my best staff. Finding a good location is getting increasingly difficult. Food costs are rising but my customers are price-sensitive. Sustaining topline is not easy. Where are you looking to invest in the medium term? Which are your preferred cuisines? What makes you try a new restaurant? Consumers use their smartphones to: I always eat healthy food. I eat healthily during the week, however, I indulge a bit at the weekend. I have become more health-conscious. I am not particular about. nutritional value; I prefer taste over health. Do you eat healthily? Yes, the trend has really picked up. Yes, but it is still early days for healthy eating. No. Are people in the UAE eating more healthily? How do deals affect your choice of restaurant? Expand the outlet network for existing franchises and brands 64% Expand into new markets and geographies 36% Invest in new brands and franchises 27% Note: Multiple choice question - therefore, the total does not add to 100%. 6 3 16 44 38 47 24 20 17 235 105 80 147 161 84 33 32 28 25 22 31 23 24 30 61 48 18 111 105 110 51 117 101 63 52 29 9 14 30 97 55 54 Central and Latin American Chinese Emirati and GCC French Indian Italian (includes pizza) Japanese Lebanese and Levantine North American (includes burgers) Other East Asian Other European Other Middle Eastern or North African Other South Asian Pakistani No.1 Café Quick service /fast food Casual dining Fine dining 128 141 301 230 47 169 425 159 89 107 314 290 57 126 125 492 Never Only on a special occasion 1-3 times a month More than three times a month How often do you visit? 18% 16% 7% 7% 6% 2% 18% 25% Ambience Enough parking or valet service Good quality service Value for money Cuisine Food quality and taste Location and travel time Variety in the food How do you choose a restaurant? Service level 24% 48% 42% 76% Cuisine Restaurant Have you tried a new cuisine or restaurant in the last six months? Word of mouth from friends and relatives Online ratings and reviews of restaurants Reviews by food critics in magazines and newspapers Deals and promotions Known brands from home and abroad Advertising Level of service and staff is generally good Most restaurants are understaffed and quality suffers Restaurants have enough staff but they aren't very well trained ? 65% 29% 6% 24% 26% 20% 20% 10% Deals and promotions: 27% 27% 50% Induce first time trials Don't generate customer loyalty Increase footfall Note: Multiple choice question - therefore, the total does not add to 100%. How are food apps affecting your business? Do you see value in food apps? Book tables at restaurants Find a restaurants to try Look for discounts, promotions, or deals Look for directions to restaurants Order meals Read a restaurant reviews Write restaurant reviews 42 39 19 238 146 126 112 125 149 124 142 209 178 75 76 55 182 127 7 17 22 No.1 9% 9% 82% 18% 46% 36% 53% 37% 10% I have not noticed any changes in healthy options over the last year. Yes, there are more healthy items on the menu now than a year ago. No, there are fewer healthy options now. 22% 41% 23% 14% Are operators offering more healthy food options now? 37% 36% 27% – Social media engagement – Personalized dining experiences – Authenticity of cuisine – Organic food and restaurants – Food festivals – Self-ordering – Organic food and restaurants – Street concepts – Themed restaurants – DIY food LATEST FOOD INNOVATIONS Expansion strategies Operational reviews Customer insight VAT 5%
