Success brewing for UAE’s speciality coffee culture

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• Lockdown drove trend in people brewing coffee at home
• Emiratis have developed sophisticated coffee palettes
• Owner operators are driving the trend ahead of big chains

Three years after the Covid pandemic broke many businesses, a new landscape is brewing that could fundamentally change the UAE’s coffee culture.

Coffee shops were among the first to shut their doors in 2020 and bear the brunt of prolonged lockdowns.

But the pandemic has changed customer behaviour and palettes, and the country’s independent operators have evolved to make a dent in the market share of big chain franchises.

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Kim Thompson, co-owner and managing director of Raw Coffee Company, said that since lockdowns more people have started making their own coffee at home.

“It’s not a luxury, it’s something that they consider a daily ritual,” she told AGBI. “A consumer who would have bought a cup of coffee for their pick-me-up in the morning will now order a weekly or fortnightly bag of beans instead.”

Raw Coffee imports speciality-grade green beans, and roasts and supplies them to cafés, restaurants, offices and home connoisseurs in the UAE and wider Gulf region.

The company also provides the outlets with barista training and serves as a consultancy for new operators looking to enter the market to help them create a financially viable business. 

But since the virus outbreak, Raw has recorded a 400 percent increase in direct-to-consumer business.

“A little bit like the sourdough and banana bread [trends during Covid-19], they’ve got into it in a very nerdy way,” Thompson said. 

“They’ve understood grain sizes, they’ve understood the importance of water, and now they can make coffee very well.”

A 2021 US study found that more than 40 percent of Americans bought types of coffee they had never tried before during the pandemic, and nearly one-third attempted to recreate coffee shop beverages at home. 

Thompson used to say that the UAE was five years behind in terms of the coffee palette, “but I would say they’ve well and truly caught up now”.

“The consumer has learnt what they like to drink. When we first started 15 years ago it wasn’t common to even have freshly roasted coffee. Everything was imported.

“It was big American cup sizes, there were blends that were poor quality darker roasts, and there was no connection with the journey the coffee takes.

“There weren’t a lot of owner operators and there were no owner operated cafés with Emirati owners. It was just big international distribution companies.

“Now, it’s beautiful that it’s not franchises – it’s the owner operators that are driving the change. The whole country has evolved and it’s very consumer driven. That then means they are not going to go back to a lesser quality, which is a good thing,” she said.

As people have returned to normal life, and with both coffee consumption and the social aspect of the ritual deeply rooted in Middle Eastern culture, most of the region’s cafés should achieve healthy growth, even with the increase in home coffee-making.

The Middle East and North Africa’s branded coffee shops market has grown 10.5 percent to 8,874 outlets in the past year, according to the Project Café Middle East 2023 report by World Coffee Portal.

Saudi Arabia, which named 2022 the Year of Saudi Coffee, is the largest market in the region, growing 18.5 percent to reach 3,556 outlets and accounting for 40 percent of all stores.

The UAE is also a key hub and Morocco and Iraq are among the fastest growing markets by outlets.

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And the report said mid-sized and independent coffee shops are poised for further growth. 

Thompson said that the biggest franchises are losing market share to businesses that have a personality or maybe an authentic individual concept, so they are going to have to look at the quality of what they offer.

“This has happened around the world as well. I think what the bigger chains do very well is consistency, but not quality.

“The biggest frustration we have in our speciality coffee industry is that the big-chain businesses are using our terminology and talking about direct trade or being ethically sourced. They are using our terminology but they are buying a different product of coffee.

“I know what we are paying is three times the value per kilo or pound of some of the big chains here. That’s crazy.”

However, Thompson said that consumers are now more interested in supporting ethical businesses and also altering their coffee orders as a result of their new-found expertise.

“People want to know about the ingredients, the calories and the freshness of their product.

“That is the evolution we are moving towards, where there will be no milk or sugar or syrups added. It will be a brewed coffee, whether it’s hand poured or batch-brewed, but it will be a better quality of bean and roasting, and good quality water, because that’s the best way to drink coffee.” 

Innovations like ready-to-brew sachets, concentrate cold brew pouches, sustainable packaging and a move to single origin coffee where people care about the story behind their cup are also trends expected to accelerate in the new year, Thompson added. 

Jeffrey Young, CEO of Allegra Group, the company behind the Project café Middle East 2023 report, said he expected growth to continue over the next three to five years.

But in an industry where much is changing quickly, Thompson cautioned potential new entrants to study their market well.

“You have to be a savvy business person, not just a lover of coffee to make it work, and have something different to position yourself from your competitors and neighbours,” she said. 

“You might bring a brand you’ve loved overseas, but to be able to execute that with the same ingredients and local suppliers is not so easy.”