UAE Cafe and Coffee Chain Market Outlook to 2027

Market Overview:

The United Arab Emirates (UAE) had a thriving cafe and coffee chains market. Coffee culture has been steadily growing in popularity in UAE, 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 UAE as majority of the players have their outlets situated in Riyadh. In 2022 the GDP Per Capita of UAE was USD 83.7 Th.

UAE café and coffee chain market is catered by some national and international chains with multiple players like Oakberry, Pinkberry and Acai Nation offering acai bowls and smoothies.

UAE Café and Coffee Chain Market Analysis 

• The usage of QR-coded menus, contactless delivery models, cashless payments have increased manifolds in recent period. Physical menu is co-existing with digital menu to cater to younger generation. Cloud Kitchens are also becoming popular.
• The cafe market is being driven by an increasing working-age population and a population of between the ages of 24-40.
• There is an upcoming trend in middle market cafes and restaurants where customers can play a game of pool, darts or any activity alongside a great meal. This is to offer a whole experience rather than just eating at an attractive pricing.
• Owing to the diversification plan and strong focus on hospitality industry in UAE, the number of restaurants and cafes has skyrocketed in UAE and restaurant to customer ratio has increased. Thus, restaurants are facing it difficult to survive amid growing competition and are looking for innovative business models.
• UAE govt. has launched a partnership with FOODICS, a fintech platform to boost the growth of SMEs in F&B sector by providing them the advanced technologies and systems.

Key Trends by Market Segment:

By Sales Channel: A typical café and coffee chain system involves the operation of Standalone and Chain Outlets. UAE café and coffee chain market is catered by some national and international chains with multiple players like Oakberry, Pinkberry and Acai Nation offering acai bowls and smoothies. The market for café and coffee chains in the UAE is comprised of various establishments, including both chain outlets and independent specialty and commercial cafes such as Starbucks, Costa Coffee, Saddle, Nova, and others.

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:

• International coffee chains like Starbucks, Costa Coffee, Tim Hortons, and Dunkin' Donuts have a strong presence in the UAE market. They benefit from brand recognition, standardized offerings, and extensive marketing efforts.
• here are also regional café chains that have expanded within the UAE. Examples include Tim Hortons GCC, Caffe Nero, and Second Cup. These chains often provide a unique blend of local and international flavors to cater to the preferences of the diverse customer base.
• In order to differentiate themselves in a crowded market, café and coffee chains in the UAE constantly strive to enhance their offerings. This includes introducing new flavors, expanding food menus, and incorporating local ingredients. Emphasis is placed on providing high-quality coffee and offering innovative beverages to attract and retain customers.
• Many café and coffee chains in the UAE are focused on expanding their footprint by opening new outlets in high-traffic areas, such as malls, business districts, and residential communities. This allows them to increase their accessibility and capture a larger customer base.
• Oakberry and Forty Fruity have established themselves as the market leaders in the UAE, demonstrating a widespread geographical presence across the entire country. These companies have solidified their positions through a diverse range of products in their portfolios, offering customers a wide variety of options to choose from.

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.
• UAE has been attracting international coffee chains, including well-known brands like Starbucks, Costa Coffee, and PAUL, 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.
• Café and coffee chains in the UAE have embraced digital technology to enhance the customer experience. This includes mobile ordering apps, loyalty programs, and online delivery services. The ability to provide convenient and seamless experiences through digital channels has become crucial for staying competitive.
• 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:

• Consumer foodservice is expected to deliver a positive performance in UAE by all measures throughout the forecast period, across all different types of outlets. Cafes in UAE will witness a higher growth than all of the foodservice industry with increasing focus on healthy food.
• The UAE has witnessed a significant increase in the coffee culture among its residents, with coffee consumption becoming a daily ritual for many. This trend is expected to continue, driving the demand for café and coffee chain offerings.
• Tourism is forecast to increase further along with new attractions in the United Arab Emirates, and as global tourism increases generally, especially as the United Arab Emirates is a popular transit hub, all of which will benefit consumer foodservice.
• Standalone outlets are anticipated to maintain their dominance in the UAE café and coffee chain market in terms of the number of outlets. On the other hand, chained stores are projected to contribute the majority share of revenue generated within the food category, showcasing their continued growth and success in the market.