Over the last decade, the coffee market in the UAE has shown significant growth because of better consumer awareness, an increase in the number of cafes, and increasing demand for specialty coffee.
UAE Coffee Market Size
The coffee market in the UAE is among the biggest and most advanced in the Middle East, and its total value is above $3 billion. As of 2024, there were 8,874 coffee shops in the UAE, which shows that the market is well-developed and still expanding. The out-of-home market for coffee in the UAE is set to generate AED 1.05 billion ($272 million) in sales in 2024, with a y-o-y growth rate of 8.4% from 2024 to 2029. The coffee shop segment, particularly, is expected to grow at 3.9% year-on-year owing to factors such as tourism, an increase in the middle class, and premiumization in coffee consumption.
Coffee Market Growth Drivers: A Fast Developing Industry with A Lot of Potential
Over the past five years, the UAE coffee market growth has been steady and is still expected to grow at approximately 8.4% every year. Such factors contribute to this expansion:
High Disposable Income: Many people in Dubai and Abu Dhabi have a tendency to buy premium coffee brands, unique coffee blends, and coffee experiences.
Growing Tourism Sector: Since millions of tourists visit every year, coffee shops in malls, airports, and hotels remain popular.
Diverse Consumer Base: Since more than 80% of the UAE’s population is expats, the market is driven by the globalization of consumer preferences, which means that businesses have to offer a variety of tastes and methods of preparation.
Coffee Market Trends in the UAE: Major Changes Influencing the Industry Today
The coffee sector in the UAE is changing. Any new entrant in the market should know the current trends that affect consumers and the business.
Specialty and Third-Wave Coffee Movement – The market is segmented, and 60% of the market is taken by specialty coffee shops, mainly focused on single-origin coffee, sustainability, and environmental friendliness.
Premium and Ultra Premium Coffee Concepts – People are willing to pay a premium for it, such as AED 30+ per cup in some of the high-end coffee shops, which provides an opportunity for the development of the luxury coffee shop concept.
Tech-Driven Coffee Shops – Some of the new entrants are using AI, mobile ordering, and loyalty apps to enhance the customer experience.
Sustainable and Eco-Friendly Practices – People are more concerned with the origin and the material used in the packaging, resulting in an increase in sales of fair trade and biodegradable packaging.
How to Enter Coffee Market in the UAE
Coffee Market UAE
Setting up a coffee business in the UAE can be very profitable if the entrepreneur clearly understands the market. This makes the UAE an ideal location for coffee entrepreneurs due to its status as a global business hub coupled with a high demand for coffee.
Reasons why the UAE is a good market for coffee businesses:
- Strong Café Culture: This paper presents the UAE as having a very developed café culture, which is preferred by millennials and working professionals seeking good coffee.
- Different Business Models: There are different types of settings that the entrepreneurs can choose to use, including specialty coffee shops, mobile kiosks, luxury cafes, and franchises.
- Growing Market Segments: Another trend that is emerging is the growth of coffee delivery and coffee subscription services owing to the growth of delivery apps.
- Coffee Market UAE Challenges: Why Entering the Market is Not Easy
However, launching and maintaining a successful coffee shop in the UAE is not without its challenges. Many business owners have made costly mistakes, which are a result of poor understanding of the market, legal regulations and a clear business strategy.
Common Challenges and Mistakes while Starting Coffee Business in the UAE:
Licensing and Legal Complexities – This is because the regulatory framework that regulates the business is intricate and involves obtaining trade licenses, food safety permits and municipality permits.
High Competition – This is because of the presence of thousands of international and local brands of coffee sellers, which means that to stand out, the company has to have strong brand identity.
Costly Setup and Operations – This is because the rent in the prime areas is relatively high and the operational costs which include high quality raw materials, equipment and the cost of the staff are also very high.
Local Taste – Since the population of the UAE is heterogeneous, it is crucial to know what your target customer profile looks like.
Poor Location Strategy – This is because location is a critical factor and, in particular, the rental yields are high in busy areas, but the foot traffic and visibility are also higher.
To reduce these risks, entrepreneurs should seek advice from the professionals who are well acquainted with the business environment in the UAE.
How Accurate Middle East Can Help to Start a Coffee Business UAE
At Accurate Middle East Research and Consulting, it is our pleasure to assist business people in expanding their businesses in the UAE coffee market. We have a team of professionals who will assist in entering the market in a strategic and very comfortable way.
Our Services for Coffee Business Owners:
- Market Research & Feasibility Studies – In this paper, we explore the consumer taste, market trends and analysis of the competition.
- Business Setup & Licensing Assistance – This paper outlines the legal system in the UAE and how to set up a business with minimal legal issues.
- Location Analysis & Site Selection – This study presents the ideal locations for coffee shops based on traffic, demographics, and competition.
- Branding & Market Positioning – We also help in the development of the brand identity that will appeal to the UAE consumer.
- Supplier & Distribution Strategy – This paper will help businesses get the right suppliers and develop a good supply management system.
- Business Growth and Expansion Strategies – We also outline the strategies for growing the business, franchise opportunities, and investment ideas.
Start Your Business Journey in the UAE with Accurate Middle East
To participate in the UAE’s coffee market, one needs to have a good product, a good understanding of the consumer’s needs, legal permits, and knowledge of the market trends. Whether you are planning to open a specialty café, coffee roasting business or an online coffee brand, Accurate Middle East Research and Consulting is ready to assist you in every aspect of the business.
Let’s Discuss Your Coffee Business Idea Today! If you are looking to venture into the UAE coffee market, then do it with us. Contact our team at Accurate Middle East to see how we can assist in making your coffee business plans a reality. Get in touch with us today to find out more.
Contact us via WhatsApp or over the phone in the UAE +971 50 599 5603. Alternatively, you can request a callback or a free consultation by clicking the button below or fill in the brief for market research or strategy to get a proposal within 24 hours.
With our expertise in market entry strategies, business development, and UAE coffee business and market insights, we can help you unlock the full potential of the UAE market.
