Is Saudi Arabia ready to take the Middle East's F&B crown from Dubai?

Our January cover feature examines the up-and-coming F&B scene in Saudi Arabia
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Many big brands are heading to Riyadh in 2020.
Many big brands are heading to Riyadh in 2020.

In October last year, Saudi Arabia opened its doors to the world with a glitzy marketing campaign showcasing the country’s diverse landscapes as it allowed tourist visas for the first time.

It’s just one of a range of moves by Saudi’s leadership to modernise the country and make it more palatable for foreign investment, and it has made the region’s F&B industry sit up and take notice.

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While the likes of Riyadh and Jeddah have long lagged behind Dubai in terms of quantity and quality of restaurants, that could be about to change. Saudi’s Vision 2030 campaign aims to make the country a thriving and vibrant modern society, with a number of initiatives underway to achieve that.

The launch of Saudi Seasons cultural events have been used as a springboard for many familiar brands to make moves into the Kingdom. La Petite Maison, Gaia, and Scalini are all household names in Dubai that have held pop-ups in Riyadh or Jeddah over the past 12 months.

La Petite Maison global operations director Nicolas Budzynski tells us he was surprised at how many people already knew the brand in the country, saying: “We knew LPM had many fans in Saudi Arabia, but we could not have imagined how big the following was until we opened our pop-up restaurant. On average, the pop-up has had 220-250 covers a night in a 70 cover restaurant and 99% of the guests are already very familiar with LPM. Guests will come in and order without even looking at the menu.”

The French Mediterranean restaurant has plans to open a permanent location in Riyadh in 2020, and is far from the only brand to do so. Bulldozer Group founder Evgeny Kuzin told Caterer Middle East last year that it plans to move all of its concepts to the Kingdom, while Sunset Hospitality is in the middle of taking Black Tap and Luigia over.

The growth of the F&B scene naturally means more competition for the brands already established in Saudi, including Japanese concept Okku which moved from Dubai to Riyadh at the end of 2018.

As one of the first international F&B brands to enter Saudi, Okku has a headstart and has been a pioneer in introducing live music and entertainment to the country’s fine dining scene. But general manager Yauheni Piatrou is wary that the population’s choices are about to get wider with the introduction of not just new restaurants to the country.

He says: “Since the Saudi government has eased its cultural rules and customs, we will be observing more and more international entertainment options entering the market such as cinemas, lounges, and concerts, in addition to F&B outlets. Obviously, any newcomers will create a buzz and people want to try them out which will negatively effect on our sales.”

Piatrou admits that in the short term this will have a “big impact” but believes customer loyalty due to Okku’s level of service and food will win them back.

Having been raised in the Saudi capital, one Dubai-based restaurateur is looking beyond Riyadh for his next venture. Samer Hamadeh is set to open his second Akiba Dori outlet in Jeddah, outmanoeuvring the bigger brands.

“Obviously everyone is rushing to Riyadh but I grew up in Riyadh and I know the dynamics well,” he explains. “If I build a successful brand in Jeddah, I’ll go into Riyadh much stronger than coming straight from Dubai. The logic being that Riyadh residents tend to vacation in Jeddah — and Jeddah residents vacation outside the country.”

Hamadeh hopes the citizens of Saudi’s second city will be already familiar with his brand, with the only difference from his Dubai restaurant being the lack of alcohol — but with Akiba Dori also set to open an unlicensed venue in Dubai, he doesn’t believe it’s an integral part of the concept.

But as the international brands pick their spots, Samantha Wood, founder of impartial restaurant review website www.foodiva.net, visited the country following the introduction of tourist visas and believes it’s local restaurants that can contribute to Saudi’s F&B scene earning a global reputation.

Wood says: “For a country to develop a strong and mature food identity with personality, it needs to draw upon its food culture. Saudi Arabia has six distinct provinces, each with a number of regions, boasting indigenous ingredients and flavours. They should continue to drive Saudisation with the development of more culinary schools and international cooking scholarships — adding to the existing Zadk school and Le Cordon Bleu partnership. All this combined will pave the way for the development of homegrown concepts, especially those that specialise in Saudi and broader Middle Eastern cuisine. That’s what will set the dining scene apart, not just from its Gulf neighbours, but also internationally.”

Having opened 110 stores in 20 years, 50% of which opened in the past three years, Shawarmer is an example of a Saudi success story. Despite operating in a QSR market already popular with Western brands such as McDonald’s and KFC, its focus on a classic Middle Eastern product has set it apart.

Shawarmer co-founder and CEO Abdulmohsin Al Rabiah believes the brand is well-placed to continue its meteoric rise in a country where 70% of the population are under 30 and the workforce now includes the traditional homemakers, women.

He tells Caterer Middle East that “across all sectors, Saudi families are putting greater value on and demanding new levels of convenience and service. They expect companies to help enable this new convenience culture without compromising on quality and price. That trend benefits brands like Shawarmer that have invested heavily in new technologies and services that elevate the overall customer experience in our restaurants while improving speed, convenience and on-demand access to our products.”

This new demographic of customers will pose a challenge for companies hoping to import brands direct from other markets, and Okku’s Piatrou admits that the “average Saudi customer is not knowledgeable in food compared to UAE or Western customers”, while noting that 80% of Okku’s patrons are “affluent, well-educated, and frequent travellers”.

It’s why many top brands have called upon Compass Project Consulting to help them build pop-ups to get the lay of the land in the country, with director Luke Somerville saying that “the operators are then taking the plunge and opening up fully-fledged venues, due to the market demand.”

That’s exactly what La Petite Maison did, according to Budzynski: “We saw it as a great opportunity to better understand the dynamic of the market in order to make better strategic choices for next year. We will open our first Saudi restaurant, optimize and master it before considering any further expansion in KSA at this stage.”

Gates Hospitality has a number of restaurants in Dubai and founder Naim Maadad councils anyone looking at the potential in moving to Saudi considers it carefully. Maadad believes that while some of his concepts would work in the country, others would not.

He says: “We understand the market well and hence would create new brands with feasibility studies to deliver the best customised to the local culinary market. What I need to reiterate here is that approaching the market with cookie-cut solutions would not work — it needs a lot of customisation based on market specifics.”

Available in more than 500 cities across the globe, Uber Eats has amassed more data on consumer habits than almost any F&B company on Earth, and uses that technology to connect with the communities it’s serving. Assad Numan, general manager of the company in Saudi, tells us it harnessed that knowledge to ensure it adapted its operation when it launched in Riyadh, with it becoming the first Uber Eats city in the world with a cash payment option.

Another unique feature of Saudi Arabia is the complete lack of alcohol which means that unlike Dubai, restaurants are not compelled to open in hotels and Compass has seen a rise in larger, new-build, standalone concepts including super-nightclubs.

Compass director Martin McLean says that with Dubai’s F&B scene potentially reaching its peak at the moment, Saudi Arabia “holds tremendous possibilities to overtake” it.

He adds: “Contributing factors that could ensure Saudi Arabia overtakes the UAE F&B industry include the high headcount of consumers — Saudi has the largest population and land-mass opportunity in the GCC, which is expected to grow even further fuelled by the uniquely large percentage of young people, who will be enjoying an increasing disposable income per head, and would have greater international exposure, for both local Saudi Arabian communities and expats.  This fact, coupled with the more relaxed norms of the forward-thinking country, build the case that the Saudi F&B scene is a massive opportunity for local and international investors.”

We’ll see you in Saudi? It looks like everyone else is on their way.

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