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October 9, 2018,   10:59 AM

Number Of Branded Coffee Shops In Middle East Hits 9,000

Forbes Middle East

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The total Middle East branded coffee shop chain market reached 9,084 outlets in 2018, while a significant outlet growth is forecast over the next 5 years.

According to a new research on the Middle East’s emerging branded coffee shop sector conducted by Allegra World Coffee Portal, aspirational western café concepts will continue to become more popular and premiumization will gain momentum.

The report reveals that industry leaders are broadly positive about trading conditions, but operators must navigate a range of economic and political challenges across the region to ensure success.

Allegra's "Project Café Middle East 2019" considered Dubai as the focal point for Middle Eastern café innovation, as the UAE has experienced huge growth in both domestic and foreign-invested specialty coffee shop chains.

In Dubai, an influx of artisan Food & Beverage brands has capitalized on consumer appetite for premium coffee shop experiences, with a clear majority of UAE industry leaders surveyed by Allegra stating there is still plenty of growth potential in the branded coffee shop market.

"But even amid the growing popularity of specialty coffee, industry leaders cite convenience as the number one factor behind coffee shop success – ahead of coffee quality and service", says Allegra World Coffee Portal.

According to the research, Saudi Arabia and Kuwait are the key growth markets, as the liberalization of Saudi Arabia’s economy under the government’s ‘2030 Vision’ is expected to significantly boost the country’s F&B sector.

More than three-quarters of Saudi industry leaders surveyed by Allegra believe sales in the Saudi coffee shop sector will outperform national GDP in the next 12 months

Moving forward, industry leaders expect a surge in third-wave café concepts in Kuwait, with well-travelled and highly educated consumers rapidly adopting artisan coffee products, such as single origin and cold brew.

Allegra forecasts above regional average growth for branded coffee shops in 2018, with industry leaders surveyed unanimously agreeing that more Kuwaiti consumers are visiting coffee shops than 12 months ago.

Costa Coffee, Dunkin Donuts, and Starbucks are among the most populated and widespread coffee chains in the Middle East region.

Meanwhile, the research named a number of key challenges, including the implementation of the VAT for the first time in 2018 in the UAE and Saudi Arabia, with the rest of the GCC due to follow in 2019 – which could dent consumer confidence.

“The Middle East represents one of the world’s modern coffee culture hotspots, with high growth prospects for major chains across many markets and burgeoning opportunities on the horizon for the specialty coffee sector”, said Allegra Group CEO and Founder, Jeffrey Young.

The Allegra's research included canvassed opinion from 300 industry leaders via interviews and surveys across 12 key countries, including Saudi Arabia, Bahrain, Egypt, Kuwait, Lebanon and the UAE.


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