Fueled by a young population and a culture where nourishment plays a prominent part in most social gatherings, the food economy in the Middle East and North Africa region shows no signs of a slowdown.
This is particularly evident in Gulf Cooperation Council (GCC) countries, where the food and beverage sector is expected to grow by more than 7 percent annually to an estimated $196 billion in 2021, according to Mena Research Partners.
By 2020, GCC countries will see 5,500 new restaurants and eating spaces enter an already overcrowded market, which makes innovation essential for maintaining profitability.
“The food and beverage sector is very exciting across the whole region right now,” said Nezar Kadhem, founder of the Bahraini startup Eat, which is pursuing a regional expansion with a particular focus in Saudi Arabia.
“In Dubai, we’re looking at Expo as an exciting driver of innovation in the restaurant space. But I think the big story in the coming months and years will be Saudi Arabia.”
His company has developed an electronic system for table and reservation management.
Restaurants in the region are known for generous portions, hospitality and culinary experiences, but business management has remained largely unchanged.
“We are now in a time where tech solutions for the restaurant industry are becoming more robust and can actually help restaurateurs solve some of their biggest challenges,” said Sebastiaan Van de Rijt in an interview with QSR magazine.
The entrepreneur operated 10 Japanese cuisine restaurants in Belgium before moving to California to launch an innovative Asian food franchise called Bamboo Asia.
Kadhem and his co-founder, David Feuillard, were both 25-years-old when they launched Eat in February 2015.
The service is available to both customers and restaurant owners via two separate solutions. Diners get a smartphone app to browse local restaurants, read reviews, view menus and make reservations.
Restaurants are offered a platform handling online reservations, table management and restaurant analytics, as well as a dedicated customer relationship management and marketing system.
“Implementation is incredibly important. All great businesses start with an idea, but ultimately, it’s sustained execution over the years that really drives success for startups,” said Kadhem.
His venture capitalizes on the fact that it operates a locally headquartered solution.
Eat aims to offer its clients local market knowledge, on-the-ground support and engineering presence to deal with technical emergencies, plus strategic partnerships with Google, TripAdvisor, Zomato and other local partners to give restaurants access to potential customers.
However, the regional market remains extremely competitive and challenging to navigate even for a business that does not sell food.
Kadhem describes a sensitive balance that startups need to maintain so they can move forward. He emphasizes funding, a great team and initial traction for the product.
“This is the hard part: How do you get traction without a team, or how do you get a team without funding?” he asked.
Eat started with pre-seed capital of $100,000 from Tenmou. It has now successfully raised a total of $4.2 million from multiple investors and has over 2,000 restaurants across 20 countries as clients, serving more than 10 million diners along the way.
According to Kadhem, however, raising funds was not enough — it was always a challenge to reach the next milestone.
Eat chose to focus first on the smaller Bahraini market and then move on to conquer the
tougher ones.
“(It is) a market interrupted by competition, with a great mindset for entrepreneurship, where customers are forgiving and wanting to give feedback,” he said.