7 Tips For Building A Successful F&B Startup In MENA

In this edition of Founder FAQ, F&B entrepreneur and investor Sameh El Sadat – a judge on the reality television show Million Pound Menu Egypt – answers: “What goes into making a successful homegrown F&B business in the MENA region?” 

"The food scene in the MENA region has seen multiple waves of evolution over the past 20 years. And between Egypt, Saudi, Dubai, Qatar, and Kuwait, local brands have gotten great momentum, which has helped a lot of businesses compete with global brands – and even take market share from them.

I use burgers and coffee as two benchmarks or indicators to measure the market, because they are two of the biggest categories. For instance, when it comes to coffee, we’ve seen the rise of local market specialty shops taking market share from the likes of Starbucks and Costa. These are startups that have scaled one or two shops into chains of coffee players.

Similarly, if you look at burger concepts, a good example is Saudi Arabia’s Burgerizzr, which is competing with the likes of McDonalds in the Saudi market, and also went public with an initial public offering last year. That being said, partly because of these success stories and evolving consumer tastes, it’s becoming more encouraging for people to start their own F&B business.

And I think the reason that they were able to grow and scale are multiple fold. Here’s a primer: 

1. Do Your Footwork (AKA Go On Food Safaris) 

I learned about the concept of food safaris from a professor that I had at Stanford named Dr. Hayagreeva Rao, and it’s something I continue to do regularly as a food entrepreneur and investor. You need to go out and look at the concepts that are attracting young people today. See how they’re designed, look at the menu offerings, the location, seating arrangements, etc. Desktop research isn’t enough; you have to go out and do market research on-ground in order to understand cultural insights and get an idea of how local habits and tastes are evolving. I do my steps this way, which is why I call it “footwork.” I walk around, see the food markets, map out new concepts and trendy locations, etc. This is key, because it gives you an indication of where the market is going. 

2. Menu-Building Is A Science 

There is a global trend now in menu development, which is to keep it simple with just a few items, rather than giving consumers endless options. Some things are universal; so, you now have to offer gluten-free and vegetarian options, for example. But at its heart, menu development is becoming a science, and that goes from what you put on your menu and how you price it to cater to different types of consumers, to where you place different items. It’s key for F&B entrepreneurs to understand this if they want to succeed in this industry. 

3. Build A Team That Is In Sync 

One of the things that is often overlooked is the importance of having a strong team that works well together. If you can get a team that has a previous track record working together, that’s great. If not, you’ll have to build that team from the ground up. F&B businesses require good coordination and communication, and having the right team in place will help you deliver better results. 

4. Look At Supply Chain And Resourcing 

This is a very important factor, especially in our part of the world. We have seen disruptions in the past few years that have affected the availability and quality of raw materials available to us. This is often a barrier to entry for international players who want to enter markets like Egypt, where supply may be inconsistent. The edge that we have as homegrown brands is that we have the R&D capability and the stamina to work with our local supply chain suppliers to make the best out of them to compete with those global players. At The Bakery Shop (which I founded in 2008), we have had to deal with countless supply chain issues in the past few years, with lack of availability of key ingredients or raw materials priced in a way that doesn’t make sense for us. In a country like Egypt, which is a market of 110 million people — the biggest market in the region — raw materials aren’t available with the click of a button. So, sourcing and supply chain are key, and being savvy about them can give local entrepreneurs an edge that global brands don’t have. 

5. Use Technology To Gain Insights 

Today, technology is being integrated into every part of the food business from the frontend to the backend. Technology can help you gather data and insights, which, when analyzed, can help you enhance your margins, become more efficient, and make you more competitive. On the backend, it can help you process the incoming supply of raw materials and improve operational efficiency. Data can also help you understand customer preferences and enhance the overall experience, while forecasting tools can give you insights on who buys what, when, which can help you adjust your menu to maximize profit. 

6. Financial Acumen Is A Must 

Cost management is key. If you put everything I said before together, but it doesn’t make financial sense, your business will not grow. So, make sure you have a strong finance team in place to make sure you are delivering both to your customer and to your business. 

7. The Customer Comes First  

In order to build a successful F&B startup, you have to ask yourself: what does the client look for today? Starbucks sold a fast and convenient model, whereas local chains understood that many consumers today want a full artisanal experience of coffee-making where they see and smell the blend of the coffee being made. This applies across the board to all types of F&B startups. At the end of the day, you have to be obsessed with the customer to provide them with the best experience and product at the right price point."  

Pictured on image: Sameh El Sadat, F&B entrepreneur and judge on the reality television show Million Pound Menu Egypt. Image courtesy Sameh El Sadat.

This article first appeared in the January/February issue of Inc. Arabia magazine. To read the full issue online, click here.