Rapid urban population growth, climate change, disruption of global supply chains due to pandemic and geopolitical crisis are all working to increase local food production and vertical farming technologies across the world.

The Middle East and North Africa have a great potential for vertical farming. One of the main reasons is a historically high demand in local produce: Across the Gulf Cooperation Council (GCC) countries, 90% of food has been imported. From a macroeconomics perspective, the flexible economic environment, low electricity costs, and stable energy production provide quite secure conditions for indoor and vertical farming in the Gulf region.

Market research firm Data Bridge forecasts that the vertical farming market in the Middle East and Africa will have reached $6225.19 million by 2030. At the same time, total food consumption in the GCC is predicted to rise from 46.8 million tonnes in 2020 to 52.4 million in 2025, according to Dubai-based investment bank Alpen Capital.

In this blog post we will talk about opportunities for vertical farming companies in the UAE, one of the most vibrant food destinations among Gulf countries.

Vertical farming offers a significant advantage over greenhouses or conventional growing in the Gulf countries, including the UAE. Places with limited water supply and predominance of arid soils benefit most from savings in water while providing fresh crops grown locally.

What are other drivers for vertical farms in the UAE?

With a strong focus on manufacturing, trade, and tourism, the United Arab Emirates has established itself as a thriving Food & Beverage hub. In the UAE, the consumption of fresh greens and salads has grown significantly over the last years. Consumers are willing to pay more for the quality, taste, and safety of food.

The growth of a diverse expatriate population has generated a significant demand for fresh food, particularly to accommodate a wide range of global cuisines. Most of the new arrivals are well-paid professionals with a high standard of living who choose premium services and products.

In 2021, the UAE consumed 22.9 thousand tons of greens, which is estimated at $49.1 million. The indicators will continue to grow due to an increase in the urban population and the arrival of expats, one of the main target audiences of fresh produce.

The growth of tourism in the premium sector also positively affects the demand for ultra fresh produce. According to Statista (2021), 72.5% of tourists in the UAE are of medium or high income. Total revenue in the Travel & Tourism market in the Emirates is expected to reach $1,285.00 million by the end of 2023, demonstrating a full recovery from pandemic drop in 2020.

More and more executives of the HoReCa sector in the country choose high-quality ultra-fresh products produced locally in a sustainable way. iFarm (Research, 2022) has found out that large hotels like The Royal Atlantis consume up to 50-60 kg of fresh greens per day.

Food security and sustainable food economics are on the agenda in the Emirates, this is why an intense growth of vertical farming is bolstered by high investment and interest from Gulf governments.

Apart from that, the disruption of global supply chains has emphasized the importance of investing in domestic production capacity and shortening the supply chains. In the UAE, industrial zones located near cities further reduce the distance that food needs to travel from a farm to the shelves.

Different programs aimed at developing sustainable agriculture are destined to help the Emirates to increase their self-sufficiency in food production. As per the 2021 Alpen Capital GCC Food Industry report, the UAE and Saudi Arabia are the largest food importers in the GCC, accounting for 74.9% of the region’s net imports. The same research states that the self-sufficiency ratio in the UAE was 16.6% (2019), demonstrating a sustainable growth over the last decade.

High share of imports is a great growth factor. According to the iFarm’s Greens market research in the UAE, the import of lettuce leaf crops to the UAE in 2020 amounted to 17.7 thousand tons worth $27.2 million.

The UAE plans to become the number one country in the Food Security Index in less than 30 years, as outlined in the National Food Security Strategy 2051. Overall focus on food safety is one of the top priorities for the UAE government, which is, of course, also driving the development of vertical farming technologies and Closed Environment Agriculture (CEA) technologies in the country. As per the National roadmap for the transformation of food systems, the government plans to establish the UAE as a Closed Environment Agriculture (CEA) hub.

The UAE government and public institutions have programs for farmers who are willing to develop and implement CEA technologies in agriculture in the Emirates. The government offers subsidies for seeds, fertilizers and pesticides; there are also loans for the purchase of machinery and equipment.

The combination of political will and private sector innovation is giving rise to an extraordinary surge in agricultural technology initiatives, all headed towards enhancing food self-sufficiency. Creation of a business environment, parks for FoodTech companies like Food Tech Valley (Dubai) and the AgTech Park (Abu Dhabi) is also accelerating the development of high-tech agriculture and, particularly, vertical farming.

Another leading player is Hub71, the largest global tech ecosystem of the Gulf region. Hub71 is a flagship initiative of the "Ghadan 21" economic accelerator program led by Mubadala Investment Company and backed by the Government of Abu Dhabi. In 2022, iFarm was selected to join their incentive program as a vertical farming startup to develop high-tech agritechnologies in the area.

Dubai, the city of the future and tourist attraction, hosts over 3.4 million people, with tourist traffic of 15+ million in 2022 alone. Food expos, conferences, shows, and other global events account for over 120 events held annually in Dubai. Innovation and opportunities offered by the city to its residents and visitors turn Dubai into one of five best places to live in the world (Resonance Consulting, 2021).

The status of the city means that innovation in food safety, production, and sustainability are of extremely high importance, to guarantee the ultimate quality and security to consumers.

iFarm is building an innovative leafy greens vertical farm in Dubai, the facility that will have a 712 square meters of growing area, with an estimated production of around 3.2 tonnes of ultra-fresh leafy greens and microgreens per month. Based on the hydroponics vertical farming technology, the farm is semi-automated, with the major part of operations without any human labor needed.

This high-tech facility employs advanced technology to guarantee the highest possible variety of greens grown on the farm.

To learn more about other innovative farms built with iFarm technologies, visit our farms portfolio. To read about indoor vertical farming in Saudi Arabia, the biggest food producer and consumer in the Gulf region, check out this article.