Rising per capita income means that the amount households spend on food and beverage is increasing. Moreover, gradual globalization in the Kurdistan Region of Iraq is stimulating locals’ curiosity toward foreign foods and snacks as well as international cuisine. As a result, the Food and Beverage sector in Kurdistan is extensively growing. Traditional Kurdish cuisine consists mostly of rice and grilled/roasted meats and poultry, with a side of vegetables. Fresh local produce is traditionally the essence of Kurdish cuisine. The flavor is usually enhanced with local herbs and spices.

Currently, in order to meet this increase in demand for Food and Beverage products, most of the consumed merchandise is being imported from neighboring countries, notably Turkey and Iran. However, the combination of the Region’s fertile land and attractive investment incentives set up by the KRG, is it reasonable to argue that local food production may be more cost-efficient. Kurdistan has an undisputable comparative advantage in the agro-industry. The Region boasts generous amounts of arable land coupled with favorable climate and abundant water resources. Firms looking to manufacture Food and Beverage products locally may well use these factors to their advantage when establishing a competitive market position.

Average monthly household expenditure in Kurdistan stands at $1433, of which $385 are spent on food and non-alcoholic beverage, representing 27% of total expenditure. According to a study undertaken by the Ministry of Planning, the provinces of Sulaymaniah and Erbil have the highest and the second highest expenditure on food and non-alcoholic beverage in Iraq respectively. Moreover, Demographics support an attractive client base for snacks. More than a fourth of the total Iraqi population is between 5 and 14 years old, and almost half is aged 0 to 17. Given the hot local climate, market specialists argue that salty snacks are preferred to sweets and chocolates. Additionally, as shown on the graph below, the Food and Beverage industry in Kurdistan has enjoyed relatively stable prices and low inflation in the past year compared to periods of high price fluctuations in 2008 and 2009.
Furthermore, the increasing flow of foreign professionals to the Region is creating a fast growing market for international cuisine. The Rotana Hotel in Erbil boasts many high end restaurants offering a variety of gastronomy including Italian and Lebanese. A luxurious Japanese Grill and sushi bar named QI 21 has also been established in the Divan Hotel in Erbil.