Malaysia’s food and beverage sector is driving force for economy and growth

KUALA LUMPUR, Malaysia (MNTV) — Malaysia’s food and beverage (F&B) sector, a significant contributor to the nation’s Gross Domestic Product (GDP), continues to expand steadily despite inflationary challenges, reports New Straits Times.

The sector’s expansion is evident in the rising number of food establishments, including restaurants, cafes, bars, food courts, and hawker centers, as more people go out to eat for convenience and lifestyle.

According to the Department of Statistics Malaysia (DOSM), there were 136,453 F&B service establishments in Malaysia in 2022, generating a gross output of 99 billion Malaysian ringgit ($ 23.6 billion) and employing nearly 1.08 million people.

While the number of establishments declined by 18 per cent since 2015, gross output surged by 49 per cent from 66.4 billion Malaysian ringgit  ($ 15.8 billion) .

In 2023, Malaysia’s F&B sector generated 228.66 billion Malaysian ringgit ($54 billion) in revenue, with a projected compound annual growth rate (CAGR) of 7.95 per cent from 2023 to 2027. The industry contributed 3.3 per cent to Malaysia’s GDP, with projections indicating an increase to 3.9 per cent by 2028.

Malaysia has experienced a sharp rise in food inflation over the past year, with the cost of essential goods continuing to climb into early 2025.

In September 2023, the price of imported white rice surged 36 per cent, from 2,350 Malaysian ringgit ($557) to 3,200 Malaysian ringgit ($760) per metric ton, prompting increased demand for locally sourced alternatives. Food prices remain high, with notable hikes in vegetables, poultry, and cooking oil.

Despite financial pressures, many Malaysians continue to dine out, reflecting shifting consumer behavior and spending priorities. For urban dwellers, eating out is often a necessity rather than a luxury, driven by long working hours and extended commutes that make home-cooked meals impractical.

A 2022 survey by Rakuten Insight found that 43 per cent of respondents dined out several times a week, while 19 per cent ate out at least once daily. The same survey revealed that 73 percent of Malaysians typically dined with family members, emphasizing the social significance of eating out—particularly among white-collar workers.

The F&B sector has also seen significant expansion within shopping malls. Sunway Real Estate Investment Trust (REIT) chief executive officer Clement Chen noted that F&B outlets now make up 20 percent to 25 percent of mall tenants, compared to 10 percent to 15 percent a decade ago.

“In most families, both parents are probably working, so there is more of a necessity for them to dine out,” he said during a panel discussion at the CGS International 17th Annual Malaysia Corporate Day 2025.

Datuk Sunil Sachdev, owner of The Corner Sports Bar & Cafe in Petaling Jaya, noted that Malaysia’s growing urban population, especially those in dual-income families, is driving demand for dining options.

He emphasized that for many, eating out is no longer a luxury but a necessity due to busy lifestyles and long working hours.

“While inflation impacts purchasing power, middle- and high-income Malaysians continue to dine out. Many opt for budget-friendly eateries but still prioritize convenience and experience. Our sports bar and cafe caters to all,,” he said.