Dubai is among the leading participants behind the remarkable development. It offers a range of business prospects: grocery stores, food catering, cafés, food packaging, and food truck business.
Hence, if you want to start a food and beverage business in Dubai now, this is the best time to begin! Let’s understand why.
The UAE is known as one of the fastest-growing economies in the Middle East. In the past few years, the food industry in the UAE has noticed notable growth. The industry revenue of the food and beverage will reach an impressive $37.8 billion in 2023!
But keep in mind that there are certain business requirements that you must understand and meet with them to avoid hassle later on. Continue reading to know all about starting a business in the f&b industry in Dubai.
Key Factors Driving the Growth in the Food and Beverage Industry in Dubai
Dubai houses expatriates from 200 countries worldwide. It presents a vibrant market with a demand for various cuisines and ambience. Here are some reasons behind the growing activity in the F & B industry.
- Need for Premium Dining Options
The increasing desire for elevated culinary experiences and dining options drives the need for premium dining venues. Opening dining ventures has become a strategic response to cater to the tastes of the cosmopolitan population.
- Easy License Process
The increasing desire for elevated culinary experiences and dining options drives the need for premium dining venues. Opening dining ventures has become a strategic response to cater to the tastes of the cosmopolitan population.
- Popular Tourism Zone
Dubai attracted over 14 million tourists last year. It offers a wealth of cultural experiences and opportunities for startups and enterprises. Many SMEs within the city open up possibilities for locals and foreigners to explore the vibrant destination.
- World Class Infrastructure
Dubai takes pride in its cutting-edge infrastructure. Renowned architectural firms have collaborated to create iconic designs for mosques, skyscrapers, monuments, and various infrastructures. Dubai effortlessly meets and even surpasses global standards for modern amenities and architecture.
- Hub of World-Famous Restaurants
Dubai proudly holds the title of hosting the first Michelin-star restaurant in the Middle East. The latest edition of Michelin Guide Dubai, featuring about 90 such esteemed restaurants, highlights the exceptional culinary landscape in the city.
How do you start a food and beverage business in Dubai?
As careful planning and following the process is the base of any successful venture, a food and beverage business startup cannot be an exception. It is mandatory that we focus on proper planning and groundwork. The dynamic nature of the F & B industry demands strategic vision and execution for success.
- Consider the Costs – Market Feasibility
Starting a restaurant involves spending a lot of money, so planning is essential. If you need to consider all the costs, you might overspend. Forgetting necessary permits or underestimating the setup costs could save your budget and simplify the process.
Here is a breakdown of the main things you will spend money on:
| License Fee | AED 5500* – 13,000* |
| Leasing or renting a space | AED 90 – 160 per sq ft. |
| Buying equipment and facilities | AED 80K – AED 10K |
| Compliance and quality assurance | AED 12K – 15K |
| Miscellaneous expenses | AED 50K |
Note- Note- The license cost and all the above-mentioned cost breakdowns are only estimates and can vary with time based on many other factors.
The cost of opening an F & B business in Dubai is different for everyone. It differs depending on where you choose to do it, how big it is, and what facilities and equipment you need. You must also consider whether you set up your business in a free zone or the central city area to get an approximate estimate.
- Selecting the Right Type of Food and Beverage Business
Conduct thorough market research and consider local preferences, demographics, and competition to know your options. Tailor your concept to the specific location and adapt to the tourism seasonality. Strive for a balance between unique offerings and affordability to cater to the diverse population.
Popular Food and Beverage Business Models in Dubai
With over 20,000 food establishments operating in Dubai, competition within the F & B industry is at an all-time high. Operators are actively seeking ways to differentiate themselves and draw in more customers. There are numerous business models you can consider:
- Restaurants, Cafés, and Food Trucks
These establishments serve prepared meals and beverages to customers and provide casual and fine dining options. A food truck business, dine-in cafés, and restaurant business in Dubai offers a social dining experience and diverse menu options to attract a broad customer base.
- Food Stuff Business
The foodstuff business in Dubai connects the dots of F & B industry businesses and works as a food supply chain for the businesses that buy, sell, and store bulk quantities of food products.
- Food Catering
Catering services provide food and beverage offerings for events, parties, and gatherings, ranging from small to large-scale events. Starting a catering business in Dubai is also a lucrative business model in the food and beverage business category.
- Food Packaging
Food packaging businesses design, produce, and supply packaging materials for various food products. They address the need for product safety and shelf appeal and ensure attractive presentation.
- Bakeries
The Bakery business in Dubai specializes in producing and selling baked goods, including bread, pastries, cakes, and cookies. The appealing aroma and taste of quality products promise a loyal customer base.
- Cloud Kitchens
Cloud kitchens operate a virtual kitchen and capitalize on the expanding trend of online food delivery. Cloud kitchen businesses offer the opportunity to serve a broad customer base without needing a traditional dine-in space.
- Food Manufacturing
Food manufacturing involves the large-scale production of packaged food items. It includes processing, packaging, and distributing a wide range of food products.
- Getting a No-Objection Certificate
No Objection Certificate (NOC) is required to open certain food businesses like non-event food trucks or kiosks. It is necessary to ensure that there are no objections from relevant authorities.
NOC is issued after you get your trade and food licenses and is delivered within two business days. The procedure is straightforward. Submit your ID card and active trade license to the Dubai Food Safety Department.
- Obtaining the Required License
Permits are crucial when opening a restaurant for several reasons. They ensure legal compliance with local regulations. Opening an F & B business in Dubai requires two permits:
4.1 Trade License – DTCM, which is the Department of Tourism and Commerce Marketing in Dubai, issues the Trade License. Specifying the type of restaurant, you plan to operate is essential, as the license must mention.
The cost of the Trade License can range from AED 5,510* to AED 11,500*. It is influenced by factors such as the type of restaurant you own and operate.
Here are the key steps to obtain a Trade License for starting a restaurant in Dubai.
- Define the nature of your enterprise – commercial, professional, or industrial.
- Identify your company’s activities (up to 10 activities per license).
- Choose a legal status & jurisdiction for your enterprise in the UAE.
- Select and register a trade name for your company.
- Apply for initial approval.
- Lease a corporate office.
- Prepare all the necessary documents.
- Submit a further application to the DED (Department of Economic Development) for final approval.
4.2 Food License
The Food Safety Department issued the Food License in Dubai. Once you have your Trade License, obtaining this license is essential to secure approval for your construction plan.
You need to submit the following documents to the food safety department to obtain the license:
(i) Trade license copy or primary approval from the authority.
(ii) Premises’ Interior Design layout, if applicable. It includes a blueprint of your restaurant.
In addition to the mentioned considerations, obtaining the following licenses is also crucial:
- Vehicle permit for transporting food products
- Food consignment release license
- Liquor License (if your restaurant plans to serve alcoholic beverages)
- Pork permit for handling and serving pork products
5. Picking a Location
Dubai offers restaurant owners a unique opportunity to cater to a broad audience. Thorough research on the area and its demographics is crucial when finalizing a location to ensure sufficient footfall to sustain your restaurant business.
Key factors to consider during the location decision-making process include:
- Visibility
You should opt for a location where plenty of foot traffic can be seen on a regular basis, and your restaurant can be visible easily to that traffic.
- Customer Base
Identify your target audience to determine a location that aligns with their preferences and behaviours.
- Affordability
Research the rental costs and assess potential increases to ensure they align with your profit margins.
- Proximity to Suppliers
Consider the distance to suppliers to minimize shipping costs and ensure a constant supply of raw materials.
Selecting a location tailored to your restaurant type is essential. For instance, if you plan to open a fine dining restaurant, a prime location in an affluent locality could be an excellent choice.
6. Developing a Menu
Crafting and carefully planning your menu before your restaurant opens is crucial. Creating your menu involves selecting and pricing items to cover your Prime Cost, which includes the Cost of Goods Sold and Labor Costs.
Your menu can be more thoroughly planned, and your recipes need not be fully detailed. You can continuously update the menu as you will learn with time which food items are popular and which ones are not selling well while running your business.
7. Designing the Layout of the Restaurant
Working on a restaurant layout may seem overwhelming; however, it does not make it any less crucial. The arrangement of your restaurant significantly influences day-to-day operations. It impacts the ease of movement and leaves a lasting impression on your guests.
You must submit your design project to the relevant authorities. The design should adhere to specific criteria, including:
- A kitchen area of not less than 300 sq. feet or at least 40% of the total restaurant area.
- A proper ventilation system.
- Installation of washable, fireproof, and non-absorbent materials for the restaurant’s roof, walls, and floor.
- A well-designed storage facility catering to different types of products.
8. Investing in the Technology
The significance of technology cannot be overstated, especially when launching a restaurant. As an owner, overseeing various departments is demanding, and physical presence everywhere is nearly impossible.
Consequently, investing in an efficient POS (Point-of-Sale) system can offer long-term operational ease.
Utilizing technology becomes imperative to monitor daily operations effectively. A robust POS system facilitates various daily tasks, including:
- Billing
Streamline billing operations effortlessly to eliminate errors and provide insights into customers’ preferred payment methods for tailored offers.
- Order Management
Directly push orders to the kitchen, reduce delays, and avoid misunderstandings.
- Stock and Inventory Management
Efficiently manage inventory levels and enable real-time tracking of raw materials-wise capital management to prevent losses.
These features are essential for seamless day-to-day management. Investing in state-of-the-art technology can help you make a mark in the F & B industry.
9. Getting the Staff
Recruiting the right team can significantly impact and shape your business. While finding qualified restaurant staff can be challenging, employing strategic approaches can help attract the ideal candidates.
- Craft a clear job description and leverage multiple job posting platforms to reach a broad candidate base.
- Conduct thorough interviews and check references to verify qualifications and shortlist potential employees.
- Provide training opportunities to retain and update qualified staff on the latest industry practices.
Consider some basic staffing needs that are standard across all food and beverage companies in Dubai. You can start with a limited number of employees and gradually expand your team. It is a simple approach to ensure a smooth launch and efficient operations.
- Meeting the Regular Compliance
Implementing food and beverage regulations in Dubai involves coordinating efforts among government entities. Consequently, following and adhering to the guidelines is essential to running your business.
- Food Code
The code ensures comprehensive food safety regulations. It covers licensing, hygiene, storage, handling, traceability, and labelling for all F & B establishments.
- Halal Regulations
It mandates adherence to strict Halal requirements in the sourcing, processing, and preparing of food products due to the Muslim population.
- Import and Export Regulations
These regulations enforce strict standards for imported and exported F & B products, including inspections, permits, and certificates to maintain safety and quality.
- Food Fraud Prevention
It necessitates DNA testing and spectroscopy to verify the authenticity of food products, especially high-value items, to prevent fraud and protect consumers.
Start Your Business in the F & B industry with Avyanco Business Setup
Initiating a food and beverage business may appear daunting initially, but it can be rewarding when executed correctly. Dubai presents lucrative opportunities and an outstanding platform to enter the F & B industry. However, adhering to all legal rules and regulations set by government agencies is crucial to run your business here.
Avyanco Business Setup is committed to simplifying the process and helping you start a food and beverage business in Dubai. We offer comprehensive business setup services to ensure seamless registration and approvals. Contact us for a hassle-free and compliant business setup in Dubai.
