Coffee shop industry leaders report more room for growth as specialty coffee enters the UAE mainstream – but competition among operators is heating up as the market grows
A survey of more than 200 industry leaders conducted by Allegra World Coffee Portal has revealed 75% believe there is still plenty of growth potential in the UAE’s lucrative coffee shop market.
The UAE is one of the most developed coffee shop markets in the Middle East, with Dubai the focal point for the region’s coffee innovation. The city’s status a global travel hub saw western chains gain a foothold in the country in the mid-1990s, with Dunkin’ Donuts making its debut in 1997, Costa Coffee arriving in 1999 and Starbucks opening in 2000.
But since the mid-2000s, the UAE has experienced huge growth in both domestic and foreign-invested specialty coffee shop chains. One of the Middle East’s largest B2B coffee roasters, Orbis Coffee, began operations in 2006 and today distributes across the region. Melbourne-inspired Tom and Serg was widely regarded as the UAE’s first third-wave coffee shop chain when it opened its first branded cafe in Dubai in 2013. Seven Fortunes and Coffee Planet are also major competitors in the UAE’s dynamic premium coffee shop market.
There is, however, evidence that the recent influx of specialty F&B brands is applying pressure on existing businesses as they compete for a slice of consumer spend. More than half of industry leaders surveyed by Allegra cite increased competition as the biggest challenge facing the coffee shop market currently.
But despite the boom in demand for premium beverages, such as single origin and nitro coffee, in the UAE convenience is still king. Allegra research shows three-quarters of industry leaders state having a good location is still the biggest factor behind coffee shop success – ahead of coffee quality and service standards.
Project Café Middle East 2019 is Allegra World Coffee Portal’s groundbreaking study on the Middle East’s emerging branded coffee shop market. Our research provides in-depth industry analysis of 12 regional markets, empowering coffee industry leaders to make informed and profitable business decisions.