HEAVY INVESTMENTS IN SAUDI FOOD SECTOR AS TECH FIRMS MAKE WAVES
The Saudi Arabian food sector is seeing heavy investments as the country looks to improve its food security and the market undergoes technology-driven changes.
Annual investment in the food sector in Saudi Arabia will reach 87 billion Saudi riyals (€19.3 billion), according to a recent statement by the official Saudi Press Agency.
At the same time, the country – which is the biggest food importer in the Middle East, with about 80% of foodstuffs coming from abroad – now has 1,121 food factories, according to a recent report cited by the agency.
Officials have said there have been significant increases in the number of licences issued for facilities, a key development in a country with a young and growing population that is looking to produce more of its own food.
While investments in processing factories are increasing, much of the attention is being grabbed by the kind of Silicon Valley-inspired, tech-driven food companies that are making waves in many other parts of the world too.
Chief among them is Jahez, a Saudi Arabian food delivery app, which is looking ahead to its initial public offering.
It was announced in May that the company had appointed HSBC Holdings to manage the listing, which could see Jahez listed on Saudi Arabia’s secondary exchange, Nomu.
Now five years old, Jahez dealt with about 20 million orders through its app last year, according to reports, and has around 2 million customers.
Headquartered in the Saudi Arabian capital, Riyadh, but operating in 47 cities across the country, Jahez has delivered more than 45 million orders in total, according to reports.
And like many other food delivery companies, Jahez has attracted the equivalent of tens of millions of euros from investors.
“We will continue to expand our platform to tap into new growth opportunities offered by rapid, technology-enabled changes in consumer behaviour, both in Saudi Arabia and in the wider region,” Ghassab Al Mandeel, Chief Executive Efficer, Jahez, said in a recent statement.
Jahez’s forthcoming IPO is far from the only tech-driven development set to create waves in Saudi Arabia’s food sector in the months and years to come.
C3 and WK Holding join forces
Reports from earlier this month highlighted the creation of a joint venture in Saudi Arabia between C3, the American food technology platform, and a Saudi investment group, WK Holding.
In a statement, the companies said their new outfit, called C3 Arabia, would “disrupt and revolutionise the region’s food, beverage and lifestyle industries”. It is 49% owned by its American shareholder and 51% by the Saudi partner.
Founded two years ago by Sam Nazarian, an Iranian American businessman C3, which stands for “creating culinary communities”, runs mobile delivery services, ghost kitchens and “full-service, chef-driven” restaurants.
In a statement released by C3 and WK Holding, the joint venture was described as being “fully funded” by a division of WK Holding called Smart Food Holding.
Layla Abuzaid, the founder and CEO of WK Holding, said her company was “humbled” to join forces with Nazarian, who she describing as having an “unmatched” track record.
“C3’s expansion throughout Saudi Arabia will democratise haute cuisine by opening the food tech space in the region and we will assemble a best-in-class hospitality hub in the Kingdom for the region, for the world,” she added.
In a statement, Nazarian, who was once named on Fortune’s “40 Under 40” list of successful young businesspeople, described international expansion as “key to C3’s growth”, adding that WK Holding had a “track record of successful execution and best-in-class relationships”.
“Through partnership we are excited to introduce C3’s popular digital restaurant brands such as Umani Burger, Sam’s Crispy Chicken, Krispy Rice, Kumi, Sa’moto and more to the Saudi community,” he said.
In total 40 international brands will arrive in Saudi Arabia through the new joint venture, which will open its first site, an “omnichannel culinary centre”, in Riyadh in the first quarter of next year.