Rising per capita income, growth of franchise coffee chains, growing retail and hospitality sector, growing innovation and infrastructure development have aided the demand for coffee chains in UAE.
UAE has been the fastest growing coffee market in Gulf Cooperation Council (GCC) with 3.4 billion cups of coffee consumed every day.
The coffee chain market is highly organized with the major organized players occupying 82.6% of the revenue share as of 2016. The market has seen a shift from traditional coffee shops to modern coffee outlets with increased focus on ambience and customized service offerings. Moreover, the customers now demand particular varieties of coffee such as Robusta, single-origin and others, certain methods of processes such as Dry Process, Semi Dry Process and Wet Process and particular brewing methods such as Pour Over/Drip, French Press, Percolate and others. Majority of the coffee chains are located in Dubai, Sharjah and Abu Dhabi. Furthermore, in the beverages segment, cold drinks and beverages have contributed to the larger share of revenue considering the climatic conditions of UAE. Modern coffee chains are now targeting wider audience by introducing products for kids and health conscious people. Further, the market has seen rising demand for specialty coffee such as green coffee. This is driven by rising awareness amongst people about the process of making coffee. Moreover, there has been increasing competition with major international coffee chains entering the market along with increased number of individual specialty coffee outlets located in high end localities. The market has also witnessed increased adoption of social platform, drive thru features and digital display boards to gain customers.
Major coffee chains have rigorously invested in new concepts and ideas to remain competitive in the market. In order to suit the busy lifestyle of the customers, many coffee outlets have introduced drive thru to increase their sales. Further, they have added a kids section in their menu to cater to a wider audience. Moreover, the coffee chains have introduced a breakfast menu targeting customers going to work in the morning. Since, it is an experience driven market, the coffee chains have also invested in upgrading their outlet’s interiors to provide a more comfortable and engaging environment. Digital innovation such as apps, online payment systems, and online loyalty cards has helped various players in industry to increase their sales by better targeting their customers as they can gather data through such platforms. Furthermore, with the rise in number of tech savvy people, coffee chains have launched apps which support online ordering and payment facilities.
The report 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” by Ken Research suggested a robust CAGR of 10.0% in revenue of the UAE coffee chain market by 2021 with evolving experience driven customer preferences and rising number of shopping malls driving the revenues of this market in the future.
For more information on the research report, refer to below link:
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Ankur Gupta, Head Marketing & Communications
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