Exploring KSA's Dynamic Food Scene
29 September 2023
As Saudi Arabia charts its course towards realizing its Vision 2030 goals, the development of the hospitality sector takes center stage. With an unwavering determination, the kingdom is leveraging its abundant resources to position itself as a world-class gastronomic destination. Through a robust series of projects, Saudi Arabia is poised to transform its culinary scene. We explore the Kingdom's vision for its food sector and explore the key trends and drivers shaping the industry's future.
The restaurant industry in Saudi Arabia presents ample opportunity for growth, given the country's large population of nearly 36 million, as reported by the World Bank. With 14 to 40-year-olds constituting 60% of the population, as per data from the General Authority for Statistics in Saudi Arabia, the market remains far from reaching saturation. Despite the relative ease of launching a restaurant, maintaining its success can be challenging.
Here are the key trends to take into consideration as they play a crucial role in achieving sustained success in this highly competitive industry:
Localization and Homegrown Concepts
The demand for local Saudi dishes is on the rise, yet there appears to be a dearth of variety in Saudi cuisine. To ensure the success of food and beverage establishments in Saudi Arabia, localization is a critical consideration. In this regard, it is essential to utilize dish names that resonate with the local residents. By doing so, businesses can enhance their appeal to Saudi customers and establish a deeper connection with them, thereby fostering greater loyalty and repeat business.
Furthermore, several homegrown concepts are making noteworthy strides in expanding the horizons of local cuisine and making it more accessible to diverse markets. Through innovative menu offerings and creative marketing, these brands are successfully carving out a niche for themselves and contributing to the evolution of Saudi cuisine. Here are some concepts that have gained popularity among residents and tourists alike:
Bofia - the restaurant offers traditional Saudi cuisine as well as a fusion of Arabic and international dishes, giving customers a diverse range of options to choose from. The popular restaurant chain serves traditional Arabic dishes with a modern twist and features a cozy and welcoming ambiance, with tasteful decor and comfortable seating arrangements. The menu is centered around a range of mouth-watering dishes that showcase the rich flavors and textures of Arabic cuisine.
Myazu - is a well-known restaurant for contemporary Japanese cuisine in both Jeddah and Riyadh. They offer a menu that combines modern dishes with traditional culinary techniques and high-quality ingredients. Myazu has gained recognition as one of the top restaurants in Saudi Arabia, ranking 15th at the MENA 50 Best Restaurant Awards. Their menu includes gyoza, tempura, sandos, carpaccio, sushi, maki rolls, and grilled meats from the robata grill, providing a delicious and harmonious mix of flavors.
Maiz - is a fine-dining restaurant in Dammam, Saudi Arabia, celebrating the country's cuisine, culture, and heritage. It's the first authentic Saudi restaurant and offers traditional dishes from all 13 provinces with a contemporary twist. Local ingredients and unique flavors are incorporated, creating a sophisticated dining experience. A popular dish is the Saudi caviar served with masabeeb pancakes.
There is a growing trend among Saudis to seek out mid- to high-end international franchises in order to experience new concepts and sample foreign cuisines which in consequence presents opportunities for franchise operators looking to expand into the Saudi Arabian market. Furthermore, thanks to the Saudi government’s initiatives to support, fund, and train small businesses homegrown concepts such as the below are also on the rise:
Shababik - a popular restaurant known for its traditional Middle Eastern and Mediterranean cuisine. The restaurant offers a wide range of dishes, including grilled meats, fresh salads, appetizers, and traditional Arabic desserts.
Overdose - a luxurious Industrial style coffee house and bakery, with a wide range of heart-warming hot beverages and refreshing iced coffee drinks as well as freshly made bites.
Lusin - a leading restaurant in Saudi Arabia serving Armenian foods with a modern twist. The evocative cuisine celebrates the centuries-old traditions of Armenians.
Bafarat - the café with a chic and modern interior design offers a range of coffee blends, roasted in-house as well as a range of bites, salads, and desserts made fresh daily.
Aani & Dani - offers authentic Middle Eastern cuisine and traditional Arabic beverages in a comfortable and inviting setting.
Al Baik - a popular fast-food chain recognized for its high-quality food and service, with several awards and accolades over the years. It is a hot spot for people looking to experience authentic Saudi Arabian fast food in a casual and friendly atmosphere.
Section B - a beloved burger place with a vibrant color scheme and an impressive area for families.
Initially supported by Saudi clientele, these local concepts are now experiencing growth and success thanks to an influx of international visitors.
While the franchise market in Saudi Arabia has traditionally been dominated by fast food brands like McDonald's, Subway, and KFC, the country's ambitious plans to become a premier tourist destination have attracted a wider range of interesting and unique brands, such as Coya and Nobu.
According to JLL the emphasis on overall experience is now global and here to stay. GlobeSt.com reports that 61% of adults prefer to spend money on experiences, such as eating out, over shopping. Harris Inc further supports this theory with their findings that 40% of millennials allegedly prefer trying new kinds of ethnic and different cuisines. The increased focus on experience is likely to drive a shift in the market dynamic away from Fast Food to Fast Casual formats as consumers attach greater weight to a quality experience rather than mere convenience.
The trend towards experiential dining continues to gather momentum, leading to a growing preference for a wider variety of dining and entertainment options such as food halls, instead of the conventional food court models. These Halls offer a local, and unique experience delivered through rotating concepts centered around freshly made, good food prepared by local chefs who are seeking to expand their brand.
The diverse range of culinary experiences offered under one roof caters to the varied tastes of consumers, making it an attractive option for food enthusiasts. In addition, the presence of small businesses and local flavors provides customers with the opportunity to support and experience local cuisine.
The trendy and upscale ambiance of Food Halls makes them an ideal location for socializing and dining out with friends and family, with the communal dining areas and shared tables further fostering a sense of community and interaction.
Moreover, the affordability and accessibility of Food Halls make them a popular choice among budget-conscious consumers. Overall, the combination of diverse food options, unique experiences, and affordability establishes Food Halls as a leading choice.
JLL reports that the fast-food segment represents 40% and 33% of the restaurant market in Riyadh and Jeddah as it offers a convenient quick meal option for busy people and an affordable option for individuals on a tight budget. But as healthy habits gain worldwide leverage Saudis are looking to become healthier and regain lost social interactions with friends & family. This trend is evident from the growing number of such establishments opening up across the Kingdom.
In the current landscape, Saudi consumers’ needs and behaviors are evolving, with a growing emphasis on experiences surpassing their need for food. As with numerous other international markets, the Kingdom is anticipated to transition from fast food to fast casual concepts that better align with the demands of contemporary consumers, whilst still providing a quick dining solution.
Delivery and Cloud Kitchens
Technological advancement has redefined F&B concepts around the world. Although chefs remain the fundamental element behind the success of a restaurant, reliance on technology in most F&B activities, like serving time for example, is crucial.
The home delivery market continues to thrive despite the demand for experiential dining. According to UBS Evidence Lab, the market for home delivery reached USD 365 billion in 2022. As Vision 2030 drives the expansion of entertainment and sporting venues, the demand for food delivery to public spaces is expected to grow alongside it. The rise in food delivery options also highlights a growing trend of dark kitchens in major cities in Saudi Arabia which offer an attractive solution for restaurants with multiple branches by preparing food in a central but relatively low-cost location.
This trend is predicted to continue gaining momentum in the coming years. The Kingdom of Saudi Arabia's hospitality sector is playing a crucial role in achieving Vision 2030 goals. Localization, homegrown concepts, franchises, experiences, and food halls are the key trends and drivers shaping the industry's future. By leveraging these trends, businesses can establish a deeper connection with the community, foster greater loyalty, and position Saudi Arabia as a world-class gastronomic destination.
Tags: Saudi Arabia, hospitality, Vision 2030, gastronomic destination, food sector, restaurant industry, localization, homegrown concepts, franchises, experiences, food halls, sustainable growth, diversification, market trends, market drivers, Saudi cuisine, international franchises, customer experience, fast food, fast casual, food court, culinary experiences, small businesses.
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