F&B Sector in Saudi Arabia

When we talk about the F&B sector in MِESBAR, we mean 4 main categories, to which we primarily provide our services:

• Restaurants

• Cafes

• Specialty bakeries

• Fresh juice shops

To look at the current status of these businesses in the Kingdom, we have to go back in history a little to take a closer look at them. As for restaurants, they have been around since man knew himself and his need for food, so it is difficult for us to trace their first appearance in the Kingdom, but as for cafes, they have their status, as the nineties were the golden period from which the story of cafes began. In 1992, the famous "Barnes" road cafe chain was launched, followed in 1996 by the global brand Dunkin Donuts, which opened its first branch at the hands of its agent in the Kingdom, Sultan Al-Adl. This was followed in 1997 by the beginning of Yousef Suleiman Al-Rajhi's ambitious vision with Dr.Cafe as the first global Saudi brand. In 2000, the glow peaked in the cafe field with the opening of the famous global brand "Starbucks", its first branch In the Kingdom, in Rashid Mall in the city of Khobar.

You may have noticed, dear reader, that all the brands mentioned in the previous paragraph are very widely spread brands and are classified as large establishments according to the classification of establishments. There is no mention of small or medium establishments that started their business at that time. This is due to the culture of consumption in the Kingdom of Saudi Arabia in the years before 2010 AD, as this sector was a newborn, and widely spread brands always won the trust of the Saudi consumer, as cafes were an entertainment outlet for the public at that time and a special social status for their visitors. However, with the emergence of the Internet and the birth of the era of social networking sites, horizons opened up and coffee culture spread more and more, and small cafes were able to obtain a golden opportunity to communicate with potential customers interested in coffee activities and attract their interest, which opened the way for many ambitious people to open their own cafes, so that competition began to intensify day after day in this sector, and the trend towards strategic planning began to achieve a competitive advantage in the market, so large brands turned to diversifying their lists of items and increasing their spread, and small cafes began trying to achieve a competitive advantage by reducing prices, as well as the war is a debate, and with the intensification of competition and the need to develop new products, cafes achieve a competitive advantage even if It was temporary, opening the doors to new business projects in the market, as a new concept for bakeries emerged, namely "specialty bakeries", which focused their sales in the B2B field, meaning that they supply their products to cafes in bulk. Local roasters also began to flourish, importing coffee crops from abroad, roasting them, and distributing them to cafes to contribute to providing low-priced coffee crops due to their ability to import in large quantities. With this great development, the food and beverage sector maintained its steady growth until 2021, when the sector witnessed a huge increase in unprecedented growth rates that reached more than 26.4% according to Monsha'at, of which small and micro enterprises had the largest share. From 2021 to 2023, the sector continued to grow until the number of enterprises reached an unprecedented number in the Kingdom, breaking the barrier of 92,000 enterprises, including 90,000 small and micro enterprises according to Monsha'at's definition, and the growth of large and medium enterprises declined due to the difference in the culture of consumption and the Saudi consumer's tendency towards smaller enterprises.

Definition of establishments by establishments:

1. Micro-enterprises: establishments that consist of a maximum of 5 full-time employees and revenues not exceeding 3 million Saudi riyals annually or less

2. Small establishments: establishments with several employees ranging from 6 to 49 full-time employees and annual revenues ranging from 3 to 40 million riyals

3. Medium establishments: establishments with several employees ranging from 50 to 249 full-time employees and revenues ranging from 40 to 200 million riyals

4. Large establishments: establishments with several full-time employees exceeding 250 employees and annual revenues exceeding the 200 million riyal barrier