Gulfood 2025: UAE's farms deliver fruits, veggies fresh - and at lower prices

Dubai: Planning to launch a farm in the UAE – and make a profitable venture out of it?

These days, businesses that are getting into agri-projects find they have a much better chance of getting what they produce onto supermarket shelves – and from there into the grocery bags of shoppers. When that happens, these projects take a step closer to turning profitable eventually.  

More multi-million dirham farming projects are going live in the UAE, with promoters convinced they have a good chance. It’s doesn’t matter whether these projects are cutting-edge vertical farms or done the old-fashioned way over acres of land.

What matters most is that what they produce is getting serious attention from the consumer. With grocery retailers playing their part.

“We have a ‘farmers’ club’, about 10 local farmers that we have source from on yearly contracts,” said Sunil Kumar, CEO of Spinneys, the upmarket supermarket operator which has been making a point of offering the ‘freshest local produce’. “Any new opportunities coming to market, we will continue to go and buy from those farms.

Farming and agritech possibilities in the UAE will be highlighted at Gulffood 2025, which opens in Dubai February 17.

“Our (business) proposition is the ability to bring these locally grown products 365 days without looking at the seasons, whether the temperature is near 50 degrees or not. I still want to ensure the tomatoes and cucumbers are brought to our customers fresh and affordable.”

What Kumar says about being affordable resonates with local farmers. As recently as 3-4 years ago, growing fresh produce and getting them to the supermarkets had a fairly higher cost element to it. This in turn reflected on what shoppers had to pay, especially on fresh organic produce.

But cost of operations are coming down for these agri-businesses, with better use of new technology to grow these fruits and vegetables. Plus, these businesses are also getting the hang of coming up with special promotions with supermarket partners on a near weekly basis. Anything that helps UAE grocery shoppers choose to buy local produce is a win.

A big win, indeed.

The other big help has come from the bigger online marketplaces and their daily/weekly promotions from the likes of noon, etc. Industry sources agree that a sizable share of grocery purchases in the UAE have shifted, and here too special prices have a big say in getting shoppers to opt for stuff from local farms. Pricing and promotions are decisive, and farmers are getting the hang of it.

Recently, Mirak added a mushroom production facility in the UAE – one that it says is the biggest such in the GCC. It’s not satisfied with just that: Mirak wants its new production to take a significant share of the UAE demand for mushrooms, as imports of processed mushrooms currently make up 100%.   

The facility, which is a joint venture with supply chain specialist Astoria, will produce 9,900 tons of mushroom annually, which will meet a ‘majority of the UAE’s domestic processed and fresh mushroom demand’. Currently, up to 100% of UAE's processed mushroom needs are imported, according to Mirak.

The new production will even provide ‘capability’ of supplying some of the other GCC markets. (A second phase will raise capacity to 14,850 tons. Overall costs on the project will be just under $50 million.)

"Mushrooms were selected as an initial crop because they maximize land efficiency and do not require traditional open-field farming conditions," said Nejdeh Ghadimi, CEO of Mirak and Senior VP at Astoria.

"Unlike many crops that need vast areas, mushrooms thrive in controlled, enclosed environments, allowing for higher yield per square meter." (Going forward, Mirak will also add high-value crops such as strawberries, blueberries and asparagus at the site, which stretches to 128 hectares. The mushroom facility occupies 24 hectares.)

UAE supermarkets willing to source and display locally grown fruits and veggies is part of the story. The real deal happens when shoppers shift their preferences to these UAE-grown options. That’s not exactly an easy proposition given the mix of nationalities making up the shopper base.

Gradually, UAE ‘consumer preferences are also shifting toward fresh, pesticide-free, and locally grown food, which is driving greater demand for farm-to-table solutions,” said Mehlam Murtaza, Executive Director of UNS Vertical Farms.

“Retailers are recognizing the value of stocking quality, sustainably grown produce with year-round availability—something that vertical farming guarantees, unlike traditional seasonal farming.

“We are engaging with supermarkets, restaurants, and online grocery platforms to establish long-term partnerships and supply agreements. While cost considerations have traditionally influenced retailer decisions, advances in technology and economies of scale are steadily narrowing the price gap between local and imported produce.”