KSA Cafe and Coffee Chain Market Outlook to 2027

Market Overview:

The Kingdom of Saudi Arabia (KSA) had a thriving cafe and coffee chains market. Coffee culture has been steadily growing in popularity in Saudi Arabia, and the country has seen a significant increase in the number of cafes and coffee chains. The market is witnessing a growing inclination and capacity among consumers to invest in higher-priced products that offer superior quality. There is an increasing trend of trying out and embracing novel products, influenced by global experiences. The demand for healthy and nutritious food and beverages is on the rise, driven by a stronger emphasis on healthy lifestyles and fitness.

The country has witnessed a rise in coffee consumption, driven by a combination of factors such as increasing urbanization, a young population, changing consumer preferences, and a growing middle class. Riyadh is the major hub for acai bowl players in KSA as majority of the players have their outlets situated in Riyadh. In 2022 the GDP of KSA was SAR ~3,300 Bn.

KSA café and coffee chain market is catered by some national and international chains with multiple players like Oakberry, Yogi and Moon shell offering acai bowls and smoothies.

KSA Café and Coffee Chain Market Analysis 

• Increasing serviceability of Café and coffee chains in Jeddah Dammam and other cities through multiple Micro fulfilment centers and stores.
• The cafe market is being driven by an increasing working-age population and a population of between the ages of 24-40.
• Consumers interest in healthier foods is rising by the growing number of media channels promoting healthy food habits - the trend is strengthening the café chains market in KSA as café chains like Yogi and Moon shell are offering multiple healthy food offering in KSA.
• SCC plans to invest over SAR ~1 Bn in the national coffee sector over the next ten years to increase annual output from 300 tons today to more than 2,500 tons by 2030 which will fuel the coffee chains market in the Kingdom.

Key Trends by Market Segment:

By Sales Channel: A typical café and coffee chain system involves the operation of Standalone and Chain Outlets. KSA café and coffee chain market is catered by some national and international chains with multiple players like Oakberry, Yogi and Moon shell offering acai bowls and smoothies. Tim Hortons, Starbucks, and Applebee's are some of the major coffee chains in KSA with Boga superfoods and fresh house are establishing themselves as Health cafes.

By Category: Acai Bowls, Frozen Yogurt Players, Smoothies and Juice Bars Players, Coffee Shops, Healthy Cafes are the major operating areas. Owing to the mindful and healthy eating habits of the Saudi population, acai, frozen yogurt and smoothies are gaining momentum of as a healthier alternative to Ice creams and sugar-based drinks.

By Geography: Saudi Arabia’s ~30.8 Mn Urban Population define the developing stage of the nation, 2022. Riyadh, Jeddah and Dammam are the hubs for attraction and Corporates as majority of the businesses are clustered in these locations. The highest concentration is found in the downtown but Jeddah as a city is more condensed and the same is found in the restaurant provision. Jeddah is the “old city” destinations which provide a lower quality restaurant experience. Moon Shell, in Jeddah is a restaurant that specializes in acai bowls operating with 3 Outlets in the Kingdom and popular vegan meals and breakfast.

Competitive Landscape:

• There are more than 25 players in the chained café market in KSA. KSA has more than 4K café and bars in 2022 with majority of the players are competing on the basis of Distribution Network, Strategic Alliances and Consumer Base, Regional Presence.
• Signature Juices has 44 sites across Riyadh, Jeddah, Dammam, and Al Khobar, with Al Barka Centre, Al Marwa Centre, and Digital City serving as umbrella locations.
• Best-selling menu items account for more than 20% of the total revenue in 2022, with the majority of acai bowl players offering smoothies and juices.
• Summer time is the peak season for Acai, Smoothie and Juice players in the kingdom and the majority of players in the market have a high occupancy rate for the available seating.

Recent Developments:

• The market has shown a willingness among consumers to pay a premium for superior quality products, including specialty coffees and unique blends. There has also been a demand for healthier options, driven by a focus on wellness and fitness.
• Saudi Arabia has been attracting international coffee chains, including well-known brands like Starbucks, Costa Coffee, and Caffe Bene, which have expanded their presence in the country.
• The country has witnessed a rise in coffee consumption, driven by a combination of factors such as increasing urbanization, a young population, changing consumer preferences, and a growing middle class.
• The cafe and coffee chains market in Saudi Arabia witnessed a greater emphasis on digitalization. Many brands introduced mobile ordering apps, loyalty programs, and online delivery services to enhance convenience for customers and improve their overall experience.
• The trend of socializing in cafes among urban Millennials and the youngest part of the population, is further fueling the growth of the chained cafes. In addition, rapid infrastructure growth, including new airports has also given scope to various coffee chains to set up their outlets.

Future Outlook:

Growing awareness, easier access and changing lifestyles have been the key growth drivers for the food services market in KSA. More than half of the population live in one of the three main cities (Riyadh, Jeddah and Eastern Region), These cities are expected to be more crowded than ever and with all the new infrastructure and rising health awareness the market for acai bowls is expected to grow at a CAGR of ~15% from 2022 to 2027.

• The Café and Acai Bowls Industry in KSA presents a huge potential for growth owing to various drivers like increasing incomes, rising tourism, technology and changing preferences.
• The market is competitive along with certain large players and hence, it could be difficult for a new player to capture a large market share in the initial phase and thus, proper strategies are essential.
• Large millennial population with high disposable incomes who are willing to spend on health are the attractive cohort of the customer for Acai Bowls.