Looking Forward in 2022

Despite consumers and brands alike aiming to start afresh for 2022, the ongoing pandemic and our consequent interest in health and wellness are set to continue to play a part in influencing the food and beverage landscape.

Consumers’ expectations are shifting toward wanting a more sustainable, healthy and a personalized lifestyle, and many along the F&B value chain are trying to ascertain between what trends may be a passing phase and what’s here to stay. Investing time, money and effort into trends that are only fleeting is a sure-fire way to risk, and therefore knowing what trends are actually seeing results is the best way to see increased revenue.

As this fast-growing industry in the MENA region reflects on Gulfood 2022, one of the world’s largest F&B events, Simon-Kucher & Partners is here to help, sharing its expert analysis on the three key areas set to shape the F&B arena for 2022 and beyond. 

An Influx of Conscious Consumerism

As Generation Z is growing into adulthood, plant-based meats, ethical sourcing, local foods and sustainability will be increasingly on the menu as they begin to shape trends within the food and beverage world.

Add this to the effects of the pandemic, which has created more engagement in health and wellness, and functional, often natural, ingredients are becoming even more popular, as consumers want products that will not only taste good but be good for your body too.

This trend of conscious eating is driven by consumers’ desire to reduce unethical and unsustainable eating practices—from packaging to the food itself—and to increase organic and environmentally responsible products.

We can see this reach toward conscious eating all over the world, but especially in the MENA region, with nearly 90 percent of consumers in the Middle East not only looking for these healthy eating options, but willing to put a bigger price tag on them, too. Similarly, over 60 percent of UAE consumers have noticed that both sustainability and naturalness of the products they’re buying has influenced what they purchase.     

This trend has pushed for increased innovation. The UAE has seen a recent launch of the F&B Innovation Lab, creating F&B concepts that are grown from sustainability, health and convenience. Meanwhile, Sarva Holdings, known for their vertical farming concept Smart Acres, is putting out a new food line Fit Farm—for those that are health conscious.

For those businesses wishing to leverage this particular trend, companies should look at their current products and see where there can be room for improvement on communicating “conscious eating” features and benefits clearly to consumers or working on new products that may fit into this trend.

An Increase in Alternative Production Models

As consumers continue to demand an increased desire for speed, quality service, and good pricing, technological advances and new food service models are blooming in the food and beverage industry.

Ghost kitchens—also known as dark kitchens, delivery-only kitchens or cloud kitchens—are a novelty you’ve probably heard about circling the restaurant industry due to their influx in the pandemic. Except, they’re no longer a novelty. With delivery quickly becoming the lifeblood of many restaurants, ghost kitchens have proven their worth to many in the restaurant industry and are still competing aggressively today. The model has advantages such as increased efficiency, with a lower investment rate, easy expansion and the possibility of housing multiple brands under one roof.

This global cloud kitchen industry has already attracted more than 70 percent of dine-in establishments in the UAE to be willing to invest in them, and this industry is expected to exceed US $71.4 billion by 2027—so it’s not a trend to ignore lightly.

Those who have already invested are seeing increased growth; UEA-grown brands Kaykroo and Sweetheart Kitchen are aiming to open an impressive 45 more stores in Saudi Arabia by the end of 2022. Similarly, Kuwait’s first cloud-kitchen operator, KLC Virtual Restaurants, has plans to double their operations in the next few years, including ten kitchens in Saudi, with Bahrain and Qatar to follow soon after.

Simon-Kucher & Partners recommends that for those operating a more traditional restaurant or kitchen, exploring cloud kitchens or other outsourced models and how they can expand revenue opportunities is a good way to keep ahead of the increasingly fierce competition the food sector faces.

Consumers Ask for the Personal

Customer-centric service is being increasingly expected by consumers, as they ask for personalized touchpoints in the way of promotions, direct communication and product recommendations. As we continue to increase our lives on digital mediums, this trend is only set to become more pronounced.

Companies leading the way in the food and beverage industry are doing so by leveraging data collected over various platforms to target both existing and potential customers. Carrefour, for example, are using a centralized database, combined with real-time data and data from IoT devices to match their existing customers with promoted products that will suit them, through their preferred channels.

Almost 90 percent of UAE consumers are more likely to purchase from an e-commerce platform that uses personalized content, with a majority of consumers also actively looking for online stores with dedicated content offering for them specifically.

To remain on top of their business, food and beverage companies will need to look to future investments in these personalization capabilities, communication and customer engagement.

The Next Step

Now that you know the three trends that are becoming even more established in the Food and Beverage industry as we continue through 2022, swiftly adapting to these consumer needs will ensure a winning commercial strategy for your business. Figuring out which trend most closely fits your unique selling point can be a great starting point to incorporating and adapting to these new consumer wants.

Farah Thalji is a Director at Simon-Kucher & Partners’. She is a member of Simon-Kucher’s Consumer practice. Farah has more than 9 years of management consulting experience focusing on tourism, leisure and entertainment, retail and economic policies. She has advised ministries, local holding companies, Private Equity funds, international retailers and leisure providers across the Middle East and Europe. Her work with clients typically includes corporate strategy, market assessment, business development and transaction advisory, pricing and go-to-market.