| Turkey

Old traditions meet new trends in Turkey’s thriving coffee shop market

Amid soaring inflation, Turkey’s branded coffee shop market defied economic gravity in 2023 and was among the fastest-growing by outlets in Europe. Deniz Karaman explores why even during tough times, Turkish operators continue to flourish in a market that is both steeped in tradition and firmly embracing international coffee culture

Espressolab’s Istanbul roastery, coffee shop and workshop in Istanbul, Turkey | Photo credit: Espressolab

When two merchants from Damascus brought the first coffee from the Arabian Peninsula to Turkey nearly 500 years ago, little could they have imagined the colossal influence those humble beans would have. The world’s first coffee house, Kiva Han, opened in 1555 in Constantinople, then the beating heart of the Ottoman Empire, and kickstarted Turkey’s, and later Europe’s, caffeine obsession.

Traditional Turkish coffee brewed in an ibrik, or cezve, and served with characteristic sediment is a mainstay of daily life in Turkey, with a small cup still costing as little as TRY 7 ($0.22). However, the success of international coffee chains in Turkey, such as Starbucks, Caffè Nero and McCafé, alongside the development of modern domestic chains such as Kahve Dunyasi and Espressolab, means many Turkish consumers are as familiar with caffè latte as they are with the ibrik, particularly in major cities.

Despite inflation soaring above 65% in February 2024 – and average beverage prices rising up to 25% over the last year to around TRY 91 ($2.84) – Turkey’s branded coffee shop market was among the fastest growing in Europe in 2023.

Traditional Turkish coffee being served on the streets of Istanbul | Photo credit: Viktor Solomonik

Moving with the times

Turkey’s coffee market has moved in step with surging demand for premium and specialty coffee around the world. Data from the Turkish Statistical Institute (TÜİK) shows overall coffee consumption has quadrupled since 2012, while coffee imports jumped 193% between 2008 and 2019 according to the International Coffee Organization (ICO). Moreover, World Coffee Portal data shows that amid a challenging economy, the Turkish branded coffee shop market grew 9% in 2022-2023 and 7.3% over the last 12 months to exceed 3,100 stores.

As a result, both domestic and international coffee brands have increased their investments in Turkey.

Today, branded coffee chains such as Starbucks, Tchibo, Caffè Nero, Gloria Jeans, MOC, Federal Coffee, Petra, Kahve Dünyası, Kahve Diyarı, Coffee Mania and Kronotrop are among the fastest-growing coffee brands in Turkey.

“Turkish coffee is still one of the most significant parts of our culture”
Murat Kolbasi, Chairman, Arzum

Starbucks is the branded coffee shop market leader with more than 700 stores, making Turkey the Seattle-based coffee chain’s second-largest European market after the UK. However, the growth of international coffee chains is a relatively recent phenomenon.

“The only coffee stores in the 62 years from 1934 to 1996 were Turkish brands,” says Murat Kolbaşı, Chairman of the Board of Directors at Arzum, one of Turkey’s largest home coffee and tea appliance brands. Kolbaşı notes that while Starbucks now holds over a quarter of the Turkish market by outlets, more than half of the operators are domestic brands.

“The value of the coffee market in Turkey has reached TRY 3bn and it continues to grow with new brands and new products. However, the market balance may change in the next five years,” he says, citing the relatively recent emergence and growth of specialty coffee shops from around 2015.

Vedat Bulut is the Founder & CEO of Old Java Coffee, an Istanbul-based specialty coffee roaster and wholesaler offering a distinctly modern espresso, filter and cold brew range. He credits international giants like Starbucks with playing a pivotal role in shaping consumer perceptions and market dynamics in Turkey. “International chains were major influencers in the formation of Turkey’s contemporary coffee market. They enabled coffee knowledge and expertise to spread widely,” he says.

Ground coffee prices in display at the Kurukahveci Mehmet Efendi Turkish coffee store at the Spice (Egyptian) market of Istanbul in July 2023 | Photo credit: Alexey Pevnev/Shutterstock

Bulut observes that domestic chains have also leveraged the growing popularity of premium and specialty coffee introduced by overseas brands to carve out a share of the evolving coffee culture. “International chains brought knowledge, new menus, service practices and retail formats to provide a model for domestic development,” he adds.

While the growth of Turkey’s coffee market owes much to investment by international chains, Turkish coffee brands are also making their mark on the global coffee stage. Istanbul-based Espressolab operates around 160 stores in Turkey and offers traditional Turkish coffee alongside single-origin and milk-based beverages, such as flat whites and lattes.

In 2022, the premium coffee sealed an agreement to roll out 100 new stores in Morocco and later inked deals in a further 13 countries, including Libya, Tunisia, Algeria and Sudan, to establish new stores. Investments in these ventures are projected to reach $10m (TRY 79.48m) by 2027.

As Turkish coffee consultant and gastronomy author Cenk Giringol explains, a growing number of domestic chains have found success through blending local coffee traditions with international trends.

“There are important [Turkish] chains such as Kahve Dünyası, Arabica Coffee, Espressolab and MOC that stand out among local brands. In particular, Espressolab is on its way to becoming a global brand.”

Innovation anchored in heritage

Distinct demographics are shaping Turkey’s evolving coffee landscape, with age, locale, and even class, underpinning consumption patterns. Major city centres, popular with young and educated Turks with a global outlook, have seen specialty coffee shops thrive. Conversely, traditional Turkish coffee maintains a stronghold in the more conservative Anatolian regions and smaller cities, where its cultural significance, strong flavour and affordability remain popular.

“From my observation, Turkish coffee consumption is very low among young people between the ages of 18-25. However, the gap is narrower in less affluent urban areas,” says, Old Java Coffee’s Bulut.

Cenk Giringol echoes this sentiment and observes that beyond the urban hubs in Anatolia, local chains are experiencing stronger growth in comparison to the international brands. “These [consumption] changes take place faster in large cities where there is generally more money. That said, outside of the big cities, especially in Anatolia, the rate of Turkish coffee consumption is very high and it remains the most popular coffee consumed in Turkey – around 70% of all coffee consumed.”

“Generation Z are moving the industry rapidly towards espresso-based, milk, and flavoured coffee”
Cenk Giringol, coffee consultant and gastronomy author

While traditional local coffee shops maintain strongholds in smaller Turkish cities for now, Murat Kolbasi believes younger consumers will lead a gradual shift towards more contemporary Western-style coffee shops. 

“Coffee chains based abroad or in Turkey can expand their business as they maintain a certain standard of taste and service. However, smaller cities still prefer the taste of their local coffee. We predict this situation will change in the coming years with the population becoming increasingly younger on average, the influence of modern culture and the urge of young people to feel they belong to a class.” 

With the surge of international chains in Turkey, one might assume that newer coffee trends could usurp traditional Turkish coffee, especially among younger, urban-based demographics.

However, an overall increase in coffee consumption hasn’t diminished the popularity of Turkey’s traditional beverage. Instead, consumer demand for specialty and international coffee beverages has risen alongside traditional Turkish coffee consumption, rather than replacing it.

“Turkish coffee is still one of the most significant parts of our culture. It always plays a part in the most important decisions we make, the moments we meet with friends to relax after a long day. Annual coffee consumption per capita in Turkey was around 350g ten years ago and has increased fourfold and reached 1.5kg today. Seventy percent of this comes from Turkish coffee,” says Murat Kolbasi.

That being said, “Generation Z is moving the industry rapidly towards espresso-based, milk, and flavoured coffee,” Kolbasi adds.

Starbucks’ Narmanlı Han store in Istanbul, Turkey | Photo credit: Courtesy of Starbucks EMEA

“I do not believe that traditional coffee houses are suffering because of the newer café concepts, says Cenk Giringol. “On the contrary, international players support increased Turkish coffee consumption and development by including it in their menus.”

Giringol points to TUIK data showing that exports of Turkish coffee rose to $400m in 2023. “This is a reflection of the overall [positive] impact of both international and local cafés and brands,” he says.

These figures present a promising outlook for Turkey’s coffee shop market, particularly amid soaring inflation that has significantly raised the cost of living and led to a severe decline in consumer confidence. However, amid challenging economic circumstances, coffee has emerged as a reliable catalyst for growth in Turkey, making it a compelling market for coffee businesses seeking to scale both domestically and globally.

For the time being at least, coffee seems impervious to Turkey’s economic woes and continues to thrive in a market anchored by centuries-old traditions – and propelled forward by a growing thirst for innovation. 

This article was first published in Issue 19 of 5THWAVE magazine.

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