The Middle East is experiencing huge growth in its coffee industry. Specialty coffee shop chains are thriving here, particularly in Dubai and Saudi Arabia. There is also a growing number of professional events, including the upcoming International Coffee and Chocolate Exhibition in Riyadh, which the organizers describe as the largest coffee and chocolate exhibition in the Middle East.
With over 9,000 branded coffee outlets in 12 countries, the region has ample opportunity for investors and is providing a new market for global producers.
But what do those coffee shops look like and what are the opportunities for growth? Let’s take a look at specialty coffee in Saudi Arabia.
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A barista pours latte art. Credit: International Coffee and Chocolate Exhibition
The Success of Western-Style Coffee Shops
Saudi Arabia has a fascinating history with coffee. The traditional coffee ritual here includes roasting beans in front of guests and the use of a dallah, a beautiful Arabic coffee pot. Today, the beans are more commonly roasted in the kitchen, but the hospitality custom is still a part of Arabic life.
In recent years, Western-style coffee shops have opened across the Middle East. And with them, a different form of coffee consumption is developing. There is growing appreciation for lighter roasts and increasing use of third wave brewing methods.
Khalid Bajere is a purchasing manager at Al Halees Group. He tells me that he has seen the coffee industry expand in Saudi Arabia in recent years. He tells me that “the young generation are typically the new coffee consumers for blended coffee and coffee with additives like milk and flavored syrups. The old generation is loyal to the old style of coffee like Turkish coffee or espresso.”
Attendees sample pour over coffee. Credit: International Coffee and Chocolate Exhibition
Wayel al-Wohaibi is a co-owner of Varietal Cafe Specialty Coffee Roasters in Riyadh. He says that Saudi Arabia has a relationship with coffee like nowhere else.
“Some of the larger supermarkets in Saudi Arabia have a dedicated aisle green coffee of various sources and quality. I have not seen this anywhere else in the world,” he says.
”2017 was a breakout period where it seemed everyone wanted to cash in on the specialty coffee movement and several streets [in Riyadh] became bustling with specialty coffee shops side by side.”
On October 8th, 2018, Allegra World Coffee Portal published a press release on its Project Café Middle East 2019. The project is a report into market share, opportunities, and challenges in the branded coffee industry in the Middle East. It forecasts significant growth in the branded coffee industry and this popularity is attributed to the success of the aspirational Western café concept.
Within the countries analyzed, Saudi Arabia was found to have the strongest rate of growth over the last 12 months, at 9.6%. So it makes sense that Riyadh is hosting the International Coffee and Chocolate Exhibition in December.
Visitors to the International Coffee and Chocolate Exhibition sample chocolates. Credit: International Coffee and Chocolate Exhibition
Dr Mohammad Almarhoon is the co-owner of Artist Hub Coffee Roasters. He is also an owner of one of the first specialty coffee shops in Saudi Arabia, Green Seeds Coffee, which opened in 2014. He tells me how coffee culture has quickly changed here.
“Specialty coffee started just recently in Saudi Arabia but it is catching up surprisingly fast. More coffee shops are opening, it’s at a high this year and predicted to [grow even more] next year,” he says.
“In the beginning, people were intrigued by the pour over, syphon, AeroPress, and other brewing methods. Now, they are more focused on the bean itself, where it comes from, what processing method is used, and even sometimes who the farmer is. There is more appreciation for the value of the bean and its story from farm to cup.”
Saudi Arabia has a growing place in the international coffee scene. Credit: International Coffee and Chocolate Exhibition
A Land of Opportunities
“The main reason I’m working here is to open my perspective to a coffee consuming country, because most of my experience is in Indonesia. I came to Saudi Arabia because the growth of coffee consumption here is high,” he says. “The market now is growing really, really fast. In Khobar itself, I think around one coffee shop opens every week.”
He agrees that the Western-style café concept is driving success. “Lots of the younger generation go to specialty cafés. There’s a change in market behavior. The reason for it, in my opinion, is because millennials can chat or hang out with other genders [in these coffee shops]. This happened because of a new perspective here. The Saudis are more open now,” he says.
Coffee culture is quickly changing in Saudi Arabia. Credit: International Coffee and Chocolate Exhibition
Saudi Arabia Is a Producing Country
Tony also tells me that the future of Saudi Arabian specialty coffee is not just in cafés. “Coffee production has started to flourish in Saudi Arabia,” he says. “In Gizan, on the border with Yemen, the coffee plantations are being taken more seriously.
“With capital from Saudi Aramco, they want to change from farming qat [a shrub that is traditionally chewed or used to make tea] to coffee farming. From my visit in April 2018 to Addayer, [I think that] there’s potential in their coffee. The problem is the post-harvesting process and high cost of labor. But, with high pride in local products among the [Saudi] citizens, I can see potential in Saudi coffee.”
Allegra identifies Saudi Arabia as having potential for growth across the food and beverage industry. Credit: International Coffee and Chocolate Exhibition
The area that Tony describes is a small, humid region with mild temperatures and long summers. Away from the desert climate that most of Saudi Arabia experiences, Addayer holds great potential for coffee production.
Saudi Arabia’s first specialty coffee farm is here. This year, it produced natural and washed coffee. Some of the lots were then independently cupped at 80, 81, and 84 points.
It’s very early days, but if coffee farming does take off in the Middle East, it can only add to the success of the third wave industry here. With access to both production and consumption, Saudi Arabia has the potential to rapidly develop.
Coffee roasters display their products. Credit: International Coffee and Chocolate Exhibition
A Strong Market For Producers
The Middle East could be an important opportunity for global coffee producers too, particularly in a time of low coffee prices.
Daniela Maya Fernández is the Director of Specialty Coffee and External Trade at Grupo Accresco, in Colombia. She says, “We see the increased demand for high quality coffee around the world and Saudi Arabia and the Middle East region is primed for the establishment of great working relationships in our supply chain through innovating vertical trade models. This is why we are investing our efforts there in the upcoming years.”
“We believe as coffee growers that our vast expertise at origin can now be conveyed in a very personal and fashionable manner for product placement in growing markets such as the Middle East.”
Karl Wienhold handles logistics and marketing at Direct Origin Trading and is the author of an upcoming book on the economics of the coffee supply chain. He tells me that the Middle East has developed a taste for high-end coffee. “Here in Colombia, most of the shipments I have seen going over there have been extremely expensive exotic process nanolots,” he says.
Third wave methods of brewing are gaining popularity in the Middle East. Credit: International Coffee and Chocolate Exhibition
An Opportunity For International Investment
One way to develop business in Saudi Arabia is through trade shows. The International Coffee and Chocolate Exhibition is one such event. It takes place in Riyadh from December 3rd to 7th and is accredited by the Global Association of the Exhibition Industry.
Radyah Al Hawsawi is the Marketing Manager at Le Concheur, a chocolate company and café based in Jeddah. She tells me that he will be at the expo and that his experience as an exhibitor at a March 2018 event from the same organizers in Jeddah was “really a wonderful experience.”
“Recently, there has been an increase in new chocolate and coffee shops that sell chocolate and dessert in Saudi Arabia. This makes me expect growth in the chocolate and coffee markets in Saudi in the upcoming years,” she says.
A view of the International Coffee and Chocolate Exhibition. Credit: International Coffee and Chocolate Exhibition
Allegra identifies Saudi Arabia and Kuwait as having significant potential across the food and beverage industry. Its findings include the statement: “The liberalisation of Saudi Arabia’s economy under the government’s ‘2030 Vision’ is expected to significantly boost the country’s F&B sector.”
Saudi Arabia, Kuwait, and UAE are predicted to be the fastest growing coffee consumer markets in the Middle East over the next half decade.
Aicha Abu Ajamieh is the Marketing and Content Manager of the International Chocolate and Coffee Exhibition. She tells me that the 2017 event had over 250 exhibitors from over 30 countries and that they collectively offered over 25,000 products. This year’s exhibition is expected to have more than 300 national and international exhibitors including brands such as La Marzocco, Bodum, and Trismoka, she says.
Exhibitions can be opportunities to learn. Credit: International Coffee and Chocolate Exhibition
Gabriele Cortopassi is a project manager with Mokaflor and Caffelab and is the CEO of Espresso Academy. He tells me that he will be at the exhibition this year.
“If coffee is exploding as culture, it is also exploding as business. Many people who attend the exhibition are investors looking for ideas, input, and skills for their project,” he says.
Third wave brewing methods. Credit: International Coffee and Chocolate Exhibition
Workshops like those held by Gabriele can provide insight into unfamiliar elements of the coffee and chocolate industries and such events can allow access to international brands.
The strengthening of the Middle Eastern coffee community in recent years has paid off. In 2016, Saudi Arabia saw its first ever AeroPress Champion and earlier this year, Sara Al-Ali was a finalist in the World Cezve/Ibrik Championship.
The traditional dallah makes way for espresso machines. Credit: International Coffee and Chocolate Exhibition
The Middle East is flourishing with opportunities in specialty coffee and chocolate. With a rapidly expanding number of coffee shops, increased interest in third wave brewing methods, and even a burgeoning farming industry, there is great promise for investors.
The taste for high-end beans also holds potential for global producers. With the right contacts, Saudi Arabia could be part of your next venture.
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Feature image credit: International Coffee and Chocolate Exhibition
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