U.A.E.’s Coffee Market Is Brewing Thanks To Robust Consumer Demand
Being a key economic hub, Dubai has managed to appeal to all the major coffee chains to set up their outlets. Starbucks, Costa Coffee, Tim Hortons, Caribou Coffee, Caffe Nero and other major coffee chains have a presence in the emirate. Moreover, Dubai has also seen the growth of high end specialty coffee chains and gourmet coffee shops such as Roseleaf Café, Seven Fortunes, Common Grounds and others that are located in major business hubs, high streets and shopping malls. These players have played a significant role in bringing the modern café culture in the U.A.E.
The U.A.E. has been the fastest evolving coffee market in Gulf Cooperation Council (GCC). The number of cups of coffee consumed in the country has witnessed a substantial increase from 1.4 billion cups a day in 2012 to 3.4 billion cups a day in 2016. Dubai has accounted for a major share of the number of coffee outlets in the U.A.E., followed by Abu Dhabi and Sharjah.
The coffee beans which are required for the production of coffee are 100% imported from other countries due to U.A.E.’s unfavorable climatic conditions. Therefore, the coffee market is highly dependent upon coffee imports from coffee producing countries like Brazil, Colombia, Indonesia, Vietnam and East Africa. The major players in the U.A.E. coffee chain market include: Starbucks, Costa Coffee, Tim Hortons, Dunkin Donuts, Caribou Coffee, Caffe Nero, Krispy Kreme, Café Bateel and Blends and Brews.
According to Ken Research’s latest publication titled “UAE Coffee Chain Market by Regions (Dubai, Abu Dhabi, Sharjah and rest of UAE), by Organized and Unorganized, by Food and Beverages – Outlook to 2021”, market has registered an elevation from $359.3 million in 2011 to $549.3 million in 2016 at a decent CAGR of 8.9% over the concerned period. The market has remained dynamic and has recently noticed a hike in the trend for home-grown or in-shop roasters as opposed to a franchised model primarily due to the shift of consumer demand. More consumers have started to prefer freshly roasted coffee than the standardized flavors which are served at the franchise outlets. As of 2016, there have been around 1,151 coffee outlets in the U.A.E. All these chains compete well on parameters like geographic coverage, price, quality of food and beverages, services, customization, customer experience, ambience, promotional offers and brand image.
Also, the per capita expenditure on coffee and tea has recorded an increment from to $90.6 in 2016. The growth in this sector has been attributed to the country’s overall economic performance. Another contributing factor is the role that shopping plays. U.A.E. residents spend several hours at shopping malls which provide a cool environment in such a warm country generally resulting in the consumption of coffee and other non-alcoholic drinks.
Dubai is expected to become a major commodity trade destination for coffee in the years to come. Lately, the agreement between the Dubai Multi Commodities Centre (DMCC) and Mega Capital Halal (MCH), a Hong Kong-based holding company to import coffee annually from China’s Yunnan State Farms Group for world distribution purposes; is forecasted to witness MCH export up to 140,000 tonnes of Chinese Arabica beans from the Yunnan State Farms Group to Dubai.
In the years to come, Abu Dhabi will certainly enjoy robust growth in the number of coffee outlets as some major infrastructure projects including expansion of Midfield Airport Terminal and the development of Zayed City infrastructure are expected to be completed by 2020.
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