Challenging times
While there is good news in abundance for the food industry in Saudi, there are a number of challenges as well — there really is no such thing as a free dinner.
Najem is under no illusion about the difficulties when he says “there are a lot of challenges”.
“Attracting and recruiting a skilled calibre of employee in the industry is the main concern and retaining them is another dilemma,” he says.
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Al Jamil adds: “Finding qualified and capable resources sits on the top of the agenda of any current or new business to setup in KSA”.
While he concedes there have been great improvements on this front, he highlights other challenges, including his belief that the foodservice market is still undeveloped compared with other countries; the fact it still lacks the efficiency of distribution and sophistication of distributors and suppliers; and a strong demand for cheap products due to high prices.
“Strict regulations controlling the condition and labelling of food — most notably to meet Halal requirements — and to safeguard quality in the hot climate (are issues),” he adds.
“Furthermore, distribution is relatively complex and inefficient. In many cases there are three levels of distributors (including wholesalers) — when one or two at the most could be used more effectively.”
The forecast
So while there are numerous hurdles to be negated, on paper it certainly looks like the future for Saudi Arabia’s food-related companies is going to be positive — Al Jamil is certainly confident in this assumption.
“The Foodservice channel will see healthy growth for the next five to seven years with a minimum net growth of 5-7% year-on-year — the government commitment and on-going initiatives are a clear indication to this,” he predicts.
“The future will see many new foodservice concepts coming to the market and will see a boom in the hotel industry to cater to the high demand of quality service hotels.”
Najem shares in this confidence believing the “future for operating in Saudi Arabia is bright”.
However, he adds that in order to take advantage, companies must have a concrete formula to take their share of the spoils.
“While thinking for the long term you need to plan for short and medium terms as well to capture current opportunities at all times,” he explains.
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