There are indications that appreciation of specialty coffee is growing across Egypt, but low business optimism and a historically value-focused market could hinder growth opportunities
Despite a 67% fall in tourism-related income in 2020, Egypt’s branded coffee shop market achieved 8.1% and 6.5% outlet growth in 2020 and 2021 respectively, only bettered among the Middle East’s largest markets by Saudi Arabia and Qatar.
Project Café Middle East 2023 shows Egypt’s branded coffee shop market grew 9.7% over the last 12 months to reach 579 outlets, making it the fifth largest in the Middle East.
The branded coffee shop market is led by Cilantro Café which added 10 net new outlets last year to reach 82. Formed in 2000, the Egyptian chain holds a 14% total market share.
The overall market increased by 51 net stores over the period, led by double-digit outlet growth for Starbucks and Dunkin’, which focused expansion on Cairo’s greater metropolitan area and its 20.5 million inhabitants.
However, business optimism among Egypt’s non-oil companies is at its lowest in more than a decade, with just 4% of firms holding a positive outlook for the next 12 months, according to S&P Global.
In September 2022 the Coffee Division at Cairo’s Chamber of Commerce warned Egypt only had enough coffee supply for three-and-a-half months due to reduced output from Brazil and Vietnam, a situation likely to further frustrate the growth prospects of coffee chains in the country and lead to price rises.
This dynamic could prove problematic for operators in Egypt’s highly value-focused coffee shop market. Some operators, such as Dunkin’, continue to offer many coffee beverages for under $1, but consumer price sensitivity means opportunities for specialty coffee and boutique operators is likely to remain limited.
However, events such as Coffestival, which showcases local specialty coffee brands, cafés and distributors to consumers, indicate an emerging market for specialty coffee in Egypt.
The Egyptian branded coffee shop market is forecast to reach 831 outlets by 2027, led by coffee-focused chains.
