Consumer spending on food and non-alcoholic beverages amounted to almost US$25bn last year, according to Euromonitor International.
It came behind only housing, which was the top spending category for UAE consumers, worth three times the value of the F&B market.
Euromonitor’s data, released by the Dubai Chamber of Commerce and Industry, forecast that overall spending would continue to rise at an annual rate of 7.5% over the next five years.
The analysis also revealed that average household expenditure in the UAE last year was the highest of all GCC countries, amounting to nearly US$103,000.
Moreover, it accounted on average for approximately 45% of the UAE’s GDP, compared to a 39% average for the GCC region and 45% for developing Asia.
“The UAE‘s consumer market is largely being driven by a fast-growing population with relatively high incomes, which are key economic fundamentals that support a robust long-term outlook for spending growth in the country,” said Hamad Buamim, chief executive of the Dubai Chamber.
Buamim added that the UAE’s predominantly young population has been attracting the interest of international brands and a growing number of e-commerce companies keen to target tech-savvy consumers.
At an earlier briefing, the chamber highlighted the positive outlook for the UAE’s food and beverage sector, supported by the country’s fast-growing population, thriving tourism market, rising household spending, and growing acceptance of healthy and organic food products among consumers.
Atiq Juma Nasib, its senior vice-president of commercial services, said these trends presented plenty of new opportunities, especially within the trade of halal meat and ready-to-drink coffee, which are two of the fastest-growing product categories.
The sales value of tea and coffee products is expected to surge to AED4.4bn by 2020, he said, while growing demand for organic food products is expected to significantly boost sales in this category to AED145m in the same year.
Fresh food sales in the UAE are projected to reach AED30bn this year, marking a steady increase from AED27bn in 2016, Nasib added.