Dubai: The F&B business in Dubai is having a good time, and it is all set to get better in the final two months of this year. The restaurants are packed, ordering in is still firing up some heavy volumes for F&B operators, and more businesses are set to join in with specialised menu offerings.
But chances are you will not find these new F&B players on the high-street, food courts, or anywhere with bricks and mortars to it. No, this surge continues to be all digital, as Dubai records more ‘virtual’ F&B brands wanting to serve those customers ready to try something new to order in.
For the businesses themselves, the need to hurry and launch virtual operations cannot be faulted.
With those hundreds of thousands of football fans set to land in Dubai from mid-November adding to those business and leisure travellers to the city during the same time, this is indeed the moment for the F&B sector, whether that’s a restaurant or those operating solely in the digital mode offering menu options that can tickle the taste buds.
The trend is creating more business startups, and more jobs (in the kitchen and delivery) as Dubai’s service industry widens its base further.
A similar trend played out last year when the Expo was on. With F&B marketing going all-digital, an optimally funded new F&B virtual brand stands as much chance as a legacy one in getting a potential consumer’s attention. After that, it’s all down to the quality of the meal that’s been delivered.
A natural extension of digital F&B
Virtual F&B businesses are the byproduct of the growth Dubai and the UAE have seen in ‘cloud kitchens’ since 2019, which accelerated during the pandemic phase. What virtual F&B brands do is come up with a limited menu made up of in-demand/niche/ethnic meal options, sign up with a cloud kitchen and delivery services operator, and then wait for the orders to come in (via app or just a phone call).
FIFA World Cup is a brilliant opportunity for employment generation across sectors in Dubai and UAE. The F&B sector as well as tourism sector will have massive exposure.
“Virtual food brands have been an in-demand trend and shown augmentative growth over past months,” said Deepak Bhatia, CEO of Snowball Restaurant Management, which operates virtual-only concepts such as By The Biriyani, By The Wok and Pizza Spot.
“The idea of having multiple cuisines, dedicated specialities or a variable range under one roof increases productivity as well as turnaround times.
“And it improves cash flow for any given concept. For the guest, it provides guests with an array of choices.
“Virtual ‘restaurants’ are a more economical option for F&B professionals who want to explore the cloud kitchen concept. This segment has already seen a bounty of growth post-Covid - however, I believe it will continue to do so through the coming months too.”
Packed with cloud kitchens
Across all of Dubai’s major residential and commercial districts, cloud kitchens have by now established deep roots. These operators have drawn in heavy investments, which gives them all the ingredients for further growth.
And Dubai residents are still ordering in, signing up for daily meal delivery orders, and are willing to try new food concepts (healthy/vegan/organic options are all trending now). If these orders can be delivered in those 15-30 minutes, the food and delivery eco-system is putting in more growth. All this even as the restaurant side of the city’s F&B sector, This is where virtual F&B brands come in. If the promoters of these businesses can cobble together that menu card around a defined set of meals, that’s all they need to get a start. They tie up with a cloud kitchen provider and then the delivery service comes into play. Make sure to have enough funds to do marketing - mostly online and through flyers - and the business can get going.
Once the start is made, what these virtual brands need is ‘word of mouth’ to further their chances. In the digital word, that means getting customer feedback and a few star ratings. Once that’s done, that brand’s chances get better. If not, it’s the end of that venture.
Cloud kitchen model is attractive at first due to lesser overheads and hence was embraced by many first-time restaurateurs. However, only a few managed to survive and scale this model, as technology, consistent customer experience, and a streamlined supply chain are critical for a delivery kitchen to survive and thrive.
“As a format, ‘delivery kitchens’ are expected to see a growth of over 30 per cent CAGR between 2021-26 - so the format is not going anywhere,” said Sanjay Vazirani, CEO, Foodlink. “However, the question is amidst so many new delivery brands which ones take the limelight and consistently hold their market position?
“To achieve economies of volume, scaling up is the only route. But it could potentially dilute consistent customer experience, and this is the major challenge in this space.
“I have always believed in these two tenets- ‘Brilliance in Basics’ and ‘Food is the Hero’. As long as we stick to these and keep improving all aspects of the brand, it will not only remain a showstopper but keep touching more and more hearts in its journey.”
But be warned - “The space is getting overly crowded and the absence of these differentiators and measures will only end in the brand losing its foothold,” said Vazirani.
But the promoters of these virtual F&B brands are willing to take that initial risk. With a World Cup on and all those visitors to Dubai, plus the fast-expanding resident base, this is truly the now or never moment for them.