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Saudi’s Technology Sector: Harnessing Foodtech to Reshape the F&B Industry
Innovation is increasingly permeating traditional sectors in Saudi Arabia, including the food and beverage (F&B) industry, with technology being a catalyst for seismic changes in the sector amid shifting market dynamics and evolving consumer demands.
The sector’s growth prospects primarily hinge on the country’s expansion of tourism, amid the government’s aim to attract 150 million visitors annually by 2030. The trajectory of the tourism market paints a narrative of growth across the F&B sector, currently valued at $45 billion, presenting lucrative business opportunities across its segments and subsegments.
As the Kingdom is increasingly becoming a compelling destination for tech companies across the globe, the local food technology (foodtech) space has been drawing global innovators working to fuel advancements and digitization in the sector’s long tail.
F&B has the Largest Share of POS Transactions in Saudi
As part of its Vision 2030 program, Saudi Arabia allocated $64 billion to invest in leisure and entertainment to stimulate tourism and increase local expenditures.
The Saudi entertainment and leisure sector is expected to reach $3.9 billion by 2027, as per recent market reports. The F&B sector stands as both a beneficiary of and contributor to the expansion of the entertainment industry and a core tenet of the country’s overall economic progress. Aiding this positive momentum is the rising consumer spending on food services, which is expected to increase by 6% per year over the next five years.
Growth in the foodservice sector can also be attributed to extensive internet access and increased adoption of cashless payments. There’s been a paradigm shift towards contactless payments among consumers in Saudi Arabia, leading more restaurants to implement modern POS systems.
For instance, beverages and food, restaurants, and cafes held the share of Saudi spending processed by POS systems in 2023, with both segments representing 16% and 15%, respectively.