Brewing Success: How To Stand Out In Dubai's Expanding Specialty Coffee Scene Diversification is a key strategy for success in the competitive specialty coffee market.

Dubai, the thriving metropolis of the UAE, is not just a city of opulent skyscrapers and luxurious lifestyles, but also a burgeoning hub for specialty coffee enthusiasts.

With a population of approximately 3.6 million, according to recent data from the Dubai Chamber of Commerce, the city offers a dynamic and rapidly growing market for food and beverage (F&B) outlets and many specialist coffee cafes. The chamber's report also highlights that there are around 27,000 businesses with trade licenses allowing them to prepare and sell caffeinated beverages, underscoring the competitive yet vibrant nature of this industry—simply put, we have 133 customers each!

Dubai's coffee scene has undergone a remarkable transformation over the past decade. The city's cosmopolitan population, with its diverse tastes and preferences, has fueled a growing demand for specialty coffee. This trend is mirrored in the increasing number of cafes and coffee shops that cater to discerning customers seeking unique and high-quality coffee experiences. However, the era following the COVID-19 crisis has introduced new dynamics to the market. In response to the economic recovery, a significant number of locally owned businesses emerged, aiming to capitalize on the growing coffee culture. Unfortunately, many of these ventures have struggled to succeed, often due to inadequate business knowledge and financial planning among the operators. The market has become highly competitive and oversaturated, with numerous businesses vying for a share of the coffee-loving customer base.

The Specialty Coffee Association (SCA) has never before seen the profits that they have been able to generate in the past years, and in order to capitalize on this bull market, it has introduced a new scoring system called the Coffee Value Assessment (CVA). Traditionally, the coffee industry has used its cup scoring system and the Q grading system to assess and score the quality of coffee. The new CVA, however, puts significant emphasis on the overall experience of enjoying coffee. This includes factors like surroundings, decor, and ambiance, where the coffee is from, and other attributes, rather than solely focusing on the coffee quality in isolation. As a result, establishments may claim high scores, despite serving substandard coffee if the overall experience is deemed exceptional.

The post-pandemic recovery period has also seen a surge in new coffee businesses, contributing to an oversaturated market. Many of these new ventures, while bringing diversity, have struggled to find success due to inadequate business knowledge and financial planning. This competitive landscape requires businesses to be agile and innovative to stay ahead.

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Moreover, the entry of international brands into Dubai's coffee market has added another layer of competitiveness. These brands, often seeking to expand due to challenges in their home markets, bring with them established reputations and resources. However, they also face the challenge of adapting to the unique preferences and dynamics of the local market. Many have demonstrated a lack of understanding of the unique Middle Eastern customer and trading conditions in the MENA.

One of the challenges businesses face is what we call the "magpie effect," where something new and shiny attracts a lot of initial interest, but customers often do not return. Our belief is that this is due to the quality of the products served. While a beautiful environment may attract people initially, it doesn't ensure repeat visits. Through our own experiments, we have found that improving the quality of ingredients, even at a higher cost, leads to greater customer satisfaction and repeat visits. High-quality products ensure that customers come back, proving that the essence of a successful F&B business lies in the quality of what is served. We have seen 10x increases in volumes by simply giving the customer a better product.

Diversification is a key strategy for success in the competitive specialty coffee market. At my enterprise, RAW Coffee Company, we have seen consistent year-on-year growth of 16% by expanding our offerings beyond traditional coffee products. This approach not only attracts a broader customer base, but also increases total customer spend. Plus, by offering complementary drinks such as matcha, drinking chocolates, high-quality teas, and iced teas, we have managed to enhance the customer experience and meet diverse tastes. These beverages cater to customers looking for variety and those who may not be coffee enthusiasts, but still seek high-quality, flavorful options.

Source: Raw Coffee Company

Maintaining high standards of quality and ethical sourcing is crucial. Our coffee beans are sourced from some of the finest coffee-growing regions in the world, including Ethiopia, Rwanda, Burundi, Peru, Myanmar, Mexico, and Colombia. Each origin brings its own distinct flavors and stories, adding depth and richness to our coffee menu. Ethiopian coffee, for instance, is renowned for its unique terroir and varieties that are not found anywhere else in the world. Our longstanding relationships with producers in Ethiopia ensure that we bring the best of their harvests to our customers. Similarly, our partnerships with small lot farmers in Peru, who operate in remote, off-grid areas, enable us to offer high-grown, premium coffee that is both exceptional in quality and sustainability.

Our commitment to ethical sourcing extends beyond just the beans. We believe in fair trade practices and work closely with our farmers to ensure that they receive fair compensation for their hard work. This not only supports their livelihoods, but also encourages sustainable farming practices that benefit the environment. In an economically uncertain and climate-changing world, producers of coffee need more than a hope they will sell their once per year cash crop at a price that gives a margin over production costs, or they will replace these trees with alternative crops.

Source: RAW Coffee Company

Offering educational workshops and events can further engage customers and build a loyal community. By hosting sessions on brewing techniques, coffee tasting, and the stories behind our beans, we provide valuable experiences that deepen customer appreciation for our products. These events position us as experts in the field and foster a sense of connection with our brand. We have benefited from expanding our topic base to include stories and information about our complementing products.

The key to success in this competitive market lies in continuous innovation, maintaining high standards, improving the customer experience with increased quality and diversifying offerings. By understanding and adapting to market trends, businesses can thrive and contribute to the rich tapestry of Dubai's coffee culture. The specialty coffee scene in Dubai is a testament to the city's vibrant and diverse culture. With a growing population and an increasing number of coffee enthusiasts, the future of this industry looks bright.

Matt Toogood, owner and CEO of RAW Coffee Company, during a trip to Africa. Source: RAW Coffee Company

By focusing on quality, ethical sourcing, and customer satisfaction, businesses can navigate the challenges of an oversaturated market and build lasting relationships with their customers. Then, leveraging the current interest of the customer base is key, so that the category does not go the way of the slider burger business trend that is now no longer cool and consolidated by bigger companies.

As experts in the specialty coffee industry, we believe in sharing our knowledge and insights to help others succeed. The journey of coffee in Dubai is just beginning, and with the right approach, it promises to be an exciting and rewarding adventure for all involved.

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