Most common challenges faced by food distributors in UAE
Food and beverages are one of the fastest-growing industries in the UAE. If you see, the same sector has faced significant setbacks during the pandemic, but kudos to the UAE government for the way they have been handling the challenges and supporting even the smallest wholesale distribution companies in the UAE. In the UAE, Dubai has been the top spot for wholesale food distributors. The population in Dubai is from different parts of the world with diversifying food choices and most importantly, luxurious lifestyles. All these factors matter when it comes to the buying decision for customers. There is always demand which has led to immense growth in the wholesale food distribution sector in Dubai.
Did you know? Around 33% of food is lost or damaged during the transport or shipping process and perishable goods spend half of their shelf life being transported. This is just the tip of the iceberg of the challenges faced by food distribution companies.
Let's discuss some of the most unique challenges faced by food distribution companies in Dubai:
The cost of food in the UAE increased by 3.71% in December 2021 over the same month in the previous year, the most since October 2020. Hence, the need to optimize productivity and cost reduction has never been more evident than before. A rise in the grocery retail market and an increase in labor cost is keeping the food distribution companies in UAE on the edge.
On the other hand, consumers are also becoming cost conscious and switching to supermarkets that provide low-cost products. This is a threat to smaller players in the market, giving complete control of the supply chain to the hands of bigger brands.
2. Supply chain management
To avoid errors in the supply chain, the wholesale distributors should know and understand everyone involved in the supply chain process and about the distribution of food products. In today's time, customers demand transparency and proof that what they are buying is authentic and filled with quality, hence they demand information about the food products and from where they are transported.
3. Food wastage
Food wastage during the transportation is majorly due to shocks and vibrations produced during movement. The damage could be huge if there are inefficient packaging systems, poor wrapping or if the goods were not correctly loaded. Such food damage and wastage cost you money and lower the customer's satisfaction.
Weather conditions are also responsible for food damage which is why it is advisable to keep a check on weather conditions and then make a decision whether to transport or not.
UAE Government is always on its toes when it comes to the quality of food. They keep a close check on the food products from production to distribution of it. They ensure that the customers get the best quality food in the best conditions which results in fewer chances of damage or contamination of food.
5. Inadequate storage space
If you are not using your warehouse space adequately, it would surely not be profitable for you. Poor warehouse layout and inefficient use of storage space can be major problems for managers.
The logistics challenges faced by food distributors are never-ending. Whether to keep the distribution radius restricted to a few areas or cater to wider geography, the scope of getting higher shipment orders from a specific city, state, or country, allocating the right number of vehicles, ensuring the food quality, etc. are some of the critical logistics-related issues that food distribution companies face.