The impact of Coffee on the UAE

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We are all well aware of how the drug caffeine works on us in the form of Coffee? The undeniable fact that Coffee does wonders on us when it’s ingested, such as calming our nerves after a hard day’s of work or heating up our body during cold winters in the UAE and not to forget that it is our daily breakfasts’ best friend as coffee goes hand in hand with donuts, cakes, cookies, pancakes, waffles and so on. The items are endless when it comes to coffee.

The UAE has no doubt been on the forefront of specialty coffee development within the GCC. Although, there is a lot of movement in recent years, particularly in Saudi Arabia, Kuwait, Bahrain and Qatar, the UAE is regarded as one of the leaders in a somewhat more even growth of the industry in terms of supply versus demand.

London-based market research firm Euromonitor published in April a coffee consumption report in the UAE, which stated that the region represents 8% (6.5 billion) of the 85 billion spent globally on the drink.  This percent is gradually set to increase as the day passes.

According to the istathmir research, in 2015, around $544.5 million was spent on coffee, a 10% increase the previous year.

Last year, approximately 19 billion tons of coffee was sold in the UAE, up by 7%.

New hot beverage café licenses in the UAE have increased in the last two years. Companies are now thinking out of the box as to how they can boost their existing profit levels.

Ryan Godinho, Founder and Roadmaster at Speciality Batch, notes that UAE coffee drinkers have more choices and few restrictions when it comes to spending on best coffee as UAE consumers are exposed to a lot more varieties of flavours, brewing methods and farm information when it comes to coffee.

According to the report, different flavoured coffee is the next frontier for the region’s vendors. Independent specialist coffee merchants that focus on the best rather than volume by serving single origin coffee spearhead this segment of the industry.

With convenient locations, recognisable products and welcoming settings, famour coffee vendors such as Starbucks and Costa Coffee will continue to pepper any walk through a mall or commercial area.

But consumers in the region are increasing their consumption of coffee for the appreciation of the beverage, as they become more aware of the origin, roasting techniques and even the altitude at which the beans were grown.

This means that the region’s coffee shops could expect a good level of profit increase in their business. by upgrading the quality of the coffee, according to Mr Godinho, who says some of his clients are receiving half of their revenue from coffee itself, rather than on food, cold drinks and other extras, and accounting beverage as 20% to 30% of their revenue.

The report forecasts a record of unprecedented volumes at a compound annual growth rate of 7% in the UAE and this is expected to reach 30198 tonnes in 2020.

As the market continues to grow, this high-end segment has huge implications for both newcomers looking to find a foothold in a crowded market and existing outlets searching for a way to boost profits from food and beverages. However, this niche product should not be confused with coffee that is described as ‘gourmet’ or ‘premium’. Godinho defines ‘specialty coffee’ with quality standard as per a legitimate and lengthy rating or grading system of 100 points. This coffee has achieved a certain higher quality that is thoroughly traceable.

The internationally recognised standard is that of the Specialty Coffee Association of America (SCAA), which recognises coffee that scores at least 80 out of 100 in the SCAA’s ‘cupping protocol’.

Last but not the least, with an increase in knowledge comes an increase in the desire for sophisticated coffee taste profiles, and the UAE has noticed a higher demand for freshly roasted single-origin and micro-lot coffees. This notable trend is coupled with the need for freshness. As with food, it is noticeable when coffee is not fresh, therefore more and more coffee drinkers in the region are turning to brands that roast their coffee locally.

Moreover, many initiatives are underway in the UAE, such as support from the Speciality Coffee Association of Europe (SCAE) to form a Middle East and North Africa (MENA) chapter in the UAE. These initiatives and others will make the UAE the centre of the specialty coffee industry in the MENA region.

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