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Saudi Arabia Cafes Market, Competition, Forecast & Opportunities, 2018-2028F

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  • 75 Pages
  • October 2023
  • Region: Saudi Arabia
  • TechSci Research
  • ID: 5877701
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The Saudi Arabia Cafes Market was valued at USD 5.83 billion in 2022 and is anticipated to project robust growth in the forecast period with a CAGR of 6.67% through 2028. Saudi Arabia's cafe culture has experienced a remarkable transformation in recent years, reflecting the country's evolving social and economic landscape. Traditionally known for its conservative values and limited public entertainment options, Saudi Arabia has embraced a more open and cosmopolitan atmosphere, fostering the growth of a thriving cafe scene.

Cafes in Saudi Arabia have become hubs for socialization, offering a diverse range of experiences to cater to the varied tastes of locals and expatriates. From trendy urban coffee shops to traditional Arabian coffee houses, there is something for everyone. Cafes are not just places to enjoy coffee; they also serve as venues for business meetings, creative collaborations, and cultural exchange.

One notable change has been the inclusion of women in public spaces, and this has led to the rise of women-centric cafes, providing a safe and inclusive environment for female patrons. These establishments have played a crucial role in empowering women and promoting gender equality.

Saudi Arabia's cafe scene is not only about beverages and desserts but also a platform for local artists, musicians, and writers to showcase their talents. Many cafes host cultural events, art exhibitions, and live performances, contributing to the country's cultural enrichment.

In conclusion, Saudi Arabia's cafe culture mirrors the nation's modernization efforts, offering a glimpse into its changing social dynamics, inclusivity, and vibrant cultural expression. These cafes are more than just places to grab a cup of coffee; they are essential components of Saudi Arabia's evolving identity and openness to the world.

Key Market Drivers

Social and Cultural Liberalization

The most significant driver behind the cafe boom in Saudi Arabia has been the country's ambitious social and cultural reforms. In 2018, Crown Prince Mohammed bin Salman initiated the "Vision 2030" plan, aimed at modernizing and diversifying the Saudi economy while fostering a more open and inclusive society. Under this vision, various restrictions on public spaces and entertainment were lifted, allowing cafes to flourish.

One of the most notable changes was the relaxation of gender segregation rules, allowing men and women to socialize together in public spaces. This transformation had a profound impact on cafe culture, as it created a more inclusive and diverse customer base. Women-centric cafes, in particular, gained prominence, offering safe and empowering spaces for female patrons to meet, work, and enjoy quality time with friends.

Moreover, the Vision 2030 plan also encouraged cultural exchange and artistic expression. Many cafes now serve as venues for art exhibitions, book readings, live music performances, and intellectual discussions, promoting cultural enrichment and creativity among the Saudi population.

Economic Diversification and Youth Entrepreneurship

Another driving force behind the cafe industry in Saudi Arabia is the country's economic diversification efforts. As the Kingdom seeks to reduce its dependence on oil revenue, it has been actively promoting entrepreneurship and small businesses. Cafes have emerged as a popular entrepreneurial venture, attracting a young and dynamic generation eager to invest in the food and beverage industry.

The government has introduced various incentives and support programs to facilitate the growth of startups, including cafes. As a result, Saudi entrepreneurs have been able to secure financing, navigate regulatory hurdles, and establish cafes that cater to a diverse range of tastes and preferences. This has led to a proliferation of cafes offering unique concepts, from specialty coffee shops to fusion cuisine and themed environments.

The influx of foreign investments has also contributed to the cafe boom. International coffee chains and restaurant franchises have recognized the potential of the Saudi market and established a significant presence in the country, offering both global and local flavors to cafe-goers.

Changing Consumer Preferences and Globalization

Saudi Arabia's growing exposure to global trends and lifestyles has significantly influenced consumer preferences in the cafe sector. As Saudis travel abroad and engage with international cultures through social media and the internet, they have developed more sophisticated tastes and higher expectations for quality, variety, and experience.

This has led to a demand for specialty coffee and artisanal beverages, with cafes sourcing high-quality beans and focusing on the art of coffee-making. Additionally, the popularity of health-conscious and organic food choices has driven cafes to incorporate healthier menu options, catering to a more health-conscious clientele.

The globalization of food and beverage trends has also inspired fusion cuisine in Saudi cafes. These establishments often blend traditional Arabian flavors with international cuisines, creating a unique culinary experience that resonates with the cosmopolitan nature of Saudi society.

Furthermore, the younger generation's interest in technology and social media has played a pivotal role in shaping cafe culture. Cafes have adapted by providing Wi-Fi access, Instagram-worthy interiors, and photogenic food presentations, aligning with the digital age's emphasis on aesthetics and shareability.

Urbanization and Changing Lifestyles

Saudi Arabia's rapid urbanization and the shift towards a more urban lifestyle have fueled the growth of cafes. Major cities like Riyadh, Jeddah, and Dammam have witnessed significant population growth, leading to increased demand for social and recreational spaces. Cafes, with their comfortable seating, cozy atmospheres, and diverse menu offerings, have become popular destinations for urban residents seeking relaxation and social interaction.

The busy and fast-paced lifestyles of urban dwellers have also driven the demand for cafes as convenient places to work, hold meetings, or unwind. Many cafes offer co-working spaces, meeting rooms, and business-friendly environments, attracting professionals, freelancers, and entrepreneurs.

Moreover, cafes have become integral to the concept of "mall culture" in Saudi Arabia. They are often located within shopping centers, providing shoppers with a convenient place to take a break, socialize, or refuel during their mall visits. This strategic placement has contributed to the steady flow of customers, making cafes a lucrative business venture.

Key Market Challenges

Regulatory Constraints and Licensing Issues

One of the foremost challenges for cafe owners in Saudi Arabia is navigating the complex regulatory environment. Despite recent liberalization efforts, the Kingdom still has strict regulations governing the food and beverage industry. Obtaining the necessary licenses and permits to operate a cafe can be a cumbersome and time-consuming process, often requiring compliance with various health, safety, and zoning requirements.

Additionally, cafes must adhere to cultural and religious sensitivities, such as maintaining gender-segregated seating areas, which can be logistically challenging to implement in smaller establishments. Ensuring that cafes meet all legal requirements while creating an appealing and inclusive atmosphere for patrons can be a delicate balancing act.

The regulatory landscape can also impact cafes' operating hours, with restrictions in place during prayer times and religious holidays. This can reduce potential revenue and create operational challenges for cafe owners trying to provide consistent service.

Intense Competition and Saturation

The cafe market in Saudi Arabia has witnessed explosive growth in recent years, resulting in increased competition and market saturation. Major cities like Riyadh, Jeddah, and Dammam are inundated with cafes of various sizes and concepts, leading to fierce competition for customers' attention and loyalty.

While competition can drive innovation and improve the overall quality of cafe offerings, it also poses challenges for new entrants and smaller establishments trying to establish themselves in the market. Differentiating from the competition and maintaining a unique value proposition can be difficult in an overcrowded sector.

The presence of international coffee chains and franchises, such as Starbucks and Costa Coffee, further intensifies competition, as these global giants often have greater resources and marketing power. Local cafes must work harder to build brand recognition and customer loyalty.

Labor Shortages and Staffing Issues

The labor market in Saudi Arabia poses its own set of challenges for cafes. Despite initiatives to promote local employment through the "Saudization" program, which encourages the hiring of Saudi citizens, many cafes still struggle to find and retain skilled staff, especially in the culinary and hospitality sectors.

Skilled baristas, chefs, and waitstaff are in high demand but can be in short supply, leading to increased labor costs and potential service inconsistencies. Many cafes also face difficulties in finding staff willing to work during non-standard hours, such as late evenings and weekends when cafes are busiest.

Additionally, staff turnover can be relatively high in the cafe industry, affecting service quality and customer satisfaction. Investing in employee training and development to maintain a skilled and motivated workforce is crucial but can be challenging for small and independent cafe owners with limited resources.

Changing Consumer Preferences and Economic Uncertainty

Saudi Arabia's cafe industry is highly sensitive to shifts in consumer preferences and economic conditions. The global economic downturn, coupled with fluctuations in oil prices, can impact consumers' disposable income and spending habits. During economic downturns, individuals may cut back on discretionary spending, affecting cafe revenues.

Furthermore, changing consumer preferences, influenced by health and wellness trends, can challenge traditional cafe menus. The growing demand for healthier, organic, and locally sourced food and beverages may require cafes to adapt their offerings, which can be costly and challenging for some establishments.

The ongoing impact of the COVID-19 pandemic has also presented challenges, with restrictions on indoor dining, reduced capacity, and changes in customer behavior. Many cafes had to pivot to takeout and delivery services to survive, which required additional investments in technology and operational changes.

Additionally, evolving consumer preferences for digital experiences and convenience have pushed cafes to adopt online ordering and delivery platforms, which can be complex to implement and maintain.

In conclusion, while Saudi Arabia's cafe culture has experienced rapid growth and transformation in recent years, it faces several challenges that cafe owners and operators must navigate. These challenges range from regulatory constraints and licensing issues to intense competition, labor shortages, changing consumer preferences, and economic uncertainty. Successfully overcoming these challenges requires adaptability, innovation, and a deep understanding of the evolving needs and expectations of Saudi cafe-goers. Despite these hurdles, cafes in Saudi Arabia continue to play a vital role in the country's social and cultural fabric, offering unique and diverse experiences to a wide range of customers.

Key Market Trends

Specialty Coffee and Artisanal Brews

Specialty coffee has gained significant traction in Saudi Arabia, with cafes increasingly focusing on the craft of coffee-making. Coffee enthusiasts are demanding more than just a caffeine fix; they seek unique flavors, high-quality beans, and meticulously prepared brews. As a result, cafes are partnering with specialty coffee roasters and baristas to offer a wider range of single-origin beans, brewing methods, and customized coffee experiences.

Saudi coffee lovers are becoming more discerning about their brews, pushing cafes to invest in specialized equipment like espresso machines, pour-over setups, and cold brew systems. This trend aligns with the global "third-wave coffee" movement, emphasizing coffee as an artisanal product rather than a commodity. Many cafes host coffee-tasting events, workshops, and barista competitions to educate customers and elevate their appreciation of coffee.

The demand for specialty coffee is also driving the emergence of coffee subscription services and online sales of premium coffee beans, allowing coffee enthusiasts to enjoy cafe-quality coffee in the comfort of their homes.

Health-Conscious Menus and Alternative Ingredients

Saudi Arabia, like many parts of the world, is witnessing a growing interest in health and wellness. Cafe-goers are increasingly conscious of their dietary choices, and cafes are responding by offering healthier menu options. This includes a shift towards organic, gluten-free, and vegan offerings, as well as incorporating superfoods like chia seeds, avocado, and acai into their menus.

Freshly pressed juices, smoothie bowls, and salads have become staples in many cafes, catering to those seeking lighter and more nutritious options. Additionally, cafes are reducing sugar content in their beverages, offering plant-based milk alternatives, and using natural sweeteners like honey and agave nectar.

The rise of health-consciousness has also led to the emergence of cafes that focus exclusively on wellness, offering yoga classes, meditation sessions, and detox programs in addition to their menu items. These holistic cafe experiences cater to customers looking for a balanced and healthy lifestyle.

Cultural Fusion and Global Flavors

Saudi Arabia's cafe culture is becoming increasingly diverse, mirroring the country's cosmopolitan nature. Cafes are embracing fusion cuisine, blending traditional Arabian flavors with international culinary influences. This trend allows customers to experience a wide range of global cuisines within the cozy confines of a cafe.

Fusion dishes might include Arabic-inspired tapas, Mexican-inspired shawarma tacos, or Indian-inspired flatbreads with Saudi twists. These innovative menu offerings appeal to adventurous eaters and provide opportunities for culinary experimentation.

The multicultural ambiance extends to cafe interiors, with some establishments adopting eclectic decor and themes that transport customers to different parts of the world. This fusion approach creates a unique and immersive dining experience that resonates with the diverse Saudi population and international visitors alike.

Digital Integration and Online Presence

Saudi Arabia's cafe industry has embraced digital integration to enhance customer experiences and streamline operations. The adoption of technology includes online ordering and delivery services, mobile apps for loyalty programs, and digital menus accessible via QR codes.

Cafes are leveraging social media platforms like Instagram and Snapchat to showcase their menu items, promote special offers, and engage with customers. Many cafes have recognized the importance of creating aesthetically pleasing, Instagram-worthy dishes and interiors to attract social media-savvy patrons.

Loyalty programs and digital marketing campaigns are becoming increasingly sophisticated, offering personalized promotions, discounts, and incentives to repeat customers. Online reservations and table booking systems are also gaining popularity, especially during peak hours when cafes can quickly reach capacity.

Additionally, the COVID-19 pandemic accelerated the use of contactless payment methods and digital menus, as safety and hygiene became paramount concerns for customers. These digital integrations are expected to continue evolving and enhancing the overall cafe experience in Saudi Arabia.

In conclusion, Saudi Arabia's cafe culture is evolving in response to changing consumer preferences and global influences. The trends of specialty coffee, health-conscious menus, cultural fusion, and digital integration are reshaping the cafe industry in the Kingdom. Cafe owners and operators are continually innovating to meet the diverse demands of their customers, creating unique and immersive experiences that go beyond traditional coffee and food service. As the cafe scene in Saudi Arabia continues to evolve, it remains a vibrant and dynamic part of the country's culinary and social landscape.

Segmental Insights

Ownership Insights

Chined Cafes have emerged as the fastest-growing segment in the Saudi Arabian cafe industry. These cafes offer a unique fusion of Chinese and Arabic culinary influences, catering to the diverse tastes of the local population. Chined Cafes blend traditional Chinese flavors and cooking techniques with Middle Eastern spices and ingredients, resulting in a mouthwatering combination that has captivated cafegoers.

The popularity of Chined Cafes can be attributed to their innovative menu offerings, which include dishes like Arabic-infused dim sum, sweet and spicy noodles with local herbs, and fusion desserts that combine elements of both cuisines. This fusion concept not only tantalizes the taste buds but also reflects the multicultural nature of Saudi Arabia.

Furthermore, Chined Cafes often provide an inviting ambiance, combining elements of Chinese and Arabian decor, creating a unique dining experience. This trend highlights the evolving and dynamic cafe culture in Saudi Arabia, where culinary experimentation and cultural fusion are celebrated.

Sales Channel Insights

In the Saudi Arabian cafe landscape, the dominating segment is undoubtedly retail sales. This aspect of the cafe industry encompasses not only the consumption of food and beverages within cafe premises but also the sale of cafe-related products, often extending beyond the cafe's physical location.

Retail sales in Saudi Arabian cafes encompass a variety of products, including branded coffee beans and blends, mugs, merchandise, and even packaged pastries or snacks. This segment allows cafes to extend their reach beyond their physical footprint, tapping into the growing consumer demand for quality coffee and cafe-related products to enjoy at home or give as gifts.

Saudi Arabian cafes often use their brand recognition and reputation for high-quality beverages to sell these products, offering customers the chance to enjoy their favorite cafe experience in the comfort of their own homes. The retail sales segment not only boosts cafes' revenue streams but also enhances brand loyalty and engagement with their customer base.

Regional Insights

The central region of Saudi Arabia stands out as the dominating hub for the country's cafe culture. This region, which includes the capital city of Riyadh, holds a prominent position in the Saudi cafe landscape for several compelling reasons.

Firstly, Riyadh is the largest and most populous city in the Kingdom, making it a prime location for cafes to attract a diverse and sizable customer base. Its thriving business districts, educational institutions, and cultural attractions create a constant demand for cafes as meeting places, co-working spaces, and venues for socializing.

Additionally, Riyadh's cosmopolitan nature reflects the melting pot of Saudi Arabia's diverse population, attracting people from all over the country and the world. This diversity translates into a broad range of tastes and preferences, which cafes in the central region are well-equipped to cater to.

Furthermore, the central region's economic significance contributes to higher levels of disposable income, allowing residents and visitors to frequent cafes more regularly. The vibrant cafe scene in central Saudi Arabia reflects the modernization and openness of the Kingdom, making it the dominant force in the country's cafe industry.

Key Market Players

  • Starbucks
  • Dunkin Donuts
  • Tim Hortons
  • Cafe Bateel
  • Costa Coffee
  • Molten Chocolate Cafe
  • Mochachino
  • Barn’s
  • Derby Coffee

Report Scope

In this report, the Saudi Arabia Cafes market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

Saudi Arabia Cafes Market, by Ownership

  • Chained Cafes
  • Standalone Cafes

Saudi Arabia Cafes Market, by Chained Cafes

  • International
  • Domestic

Saudi Arabia Cafes Market, by Sales Channel

  • Retail Sales
  • Online

Saudi Arabia Cafes Market, by Region

  • Western
  • Central
  • Southern
  • Eastern
  • Northern

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Saudi Arabia Cafes market.

Available Customizations

The following customization option is available for the report based on your specific needs: Detailed analysis and profiling of additional market players (up to five).

Table of Contents

1. Introduction
1.1. Product Overview
1.2. Key Highlights of the Report
1.3. Market Coverage
1.4. Market Segments Covered
1.5. Research Tenure Considered
2. Research Methodology
2.1. Objective of the Study
2.2. Baseline Methodology
2.3. Key Industry Partners
2.4. Major Association and Secondary Sources
2.5. Forecasting Methodology
2.6. Data Triangulation & Validation
2.7. Assumptions and Limitations
3. Executive Summary
3.1. Market Overview
3.2. Market Forecast
3.3. Key Regions
3.4. Key Segments
4. Voice of Customer Analysis
4.1. Brand Awareness
4.2. Key Influencers
4.3. Sources of Information
4.4. Visit Frequency
4.5. Satisfaction Level
5. Saudi Arabia Cafes Market Outlook
5.1. Market Size & Forecast
5.1.1. By Value
5.2. Market Share & Forecast
5.2.1. By Ownership Market Share Analysis (Chained Cafes & Standalone Cafes)
5.2.2. By Chained Cafes Market Share Analysis (International, Domestic)
5.2.3. By Sales Channel Market Share Analysis (Retail Sales & Online)
5.2.4. By Region Market Share Analysis Western Region Market Analysis Central Region Market Analysis Southern Region Market Analysis Eastern Region Market Analysis Northern Region Market Analysis
5.2.5. By Companies Market Share Analysis
5.3. Saudi Arabia Cafes Market Mapping & Opportunity Assessment
5.3.1. By Ownership Market Mapping & Opportunity Assessment
5.3.2. By Sales Channel Market Mapping & Opportunity Assessment
5.3.3. By Region Market Mapping & Opportunity Assessment
6. Saudi Arabia Chained Cafes Market Outlook
6.1. Market Size & Forecast
6.1.1. By Value
6.2. Market Share & Forecast
6.2.1. By Sales Channel Market Share Analysis
6.2.2. By Region Market Share Analysis
7. Saudi Arabia Standalone Cafes Market Outlook
7.1. Market Size & Forecast
7.1.1. By Value
7.2. Market Share & Forecast
7.2.1. By Sales Channel Market Share Analysis
7.2.2. By Region Market Share Analysis
8. Market Dynamics
8.1. Drivers
8.2. Challenges
9. Impact of COVID-19 on Saudi Arabia Cafes Market10. Market Trends & Developments
11. Porter’s Five Forces Model
11.1. Competitive Rivalry
11.2. Bargaining Power of Suppliers
11.3. Bargaining Power of Buyers
11.4. Threat of New Entrants
11.5. Threat of Substitutes
12. SWOT Analysis
12.1. Strengths
12.2. Weaknesses
12.3. Opportunities
12.4. Threats
13. Policy & Regulatory Landscape14. Saudi Arabia Economic Profile
15. Competitive Landscape
15.1. Company Profiles
15.1.1. Dunkin Donuts Company Details Product & Services Key market Focus & Geographical Presence Market Positioning Key Management Personnel
15.1.2. Barn’s Company Details Product & Services Key market Focus & Geographical Presence Market Positioning Key Management Personnel
15.1.3. Starbucks Company Details Product & Services Key market Focus & Geographical Presence Market Positioning Key Management Personnel
15.1.4. Tim Hortons Company Details Product & Services Key market Focus & Geographical Presence Market Positioning Key Management Personnel
15.1.5. Costa Coffee Company Details Product & Services Key market Focus & Geographical Presence Market Positioning Key Management Personnel
15.1.6. Mochachino Company Details Product & Services Key market Focus & Geographical Presence Market Positioning Key Management Personnel
15.1.7. Derby Coffee Company Details Product & Services Key market Focus & Geographical Presence Market Positioning Key Management Personnel
15.1.8. dr.CAFE COFFEE Company Details Product & Services Key market Focus & Geographical Presence Market Positioning Key Management Personnel
15.1.9. Cafe Bateel Company Details Product & Services Key market Focus & Geographical Presence Market Positioning Key Management Personnel
15.1.10. Molten Chocolate Cafe Company Details Product & Services Key market Focus & Geographical Presence Market Positioning Key Management Personnel
16. Strategic Recommendations
List of Figures
Figure 1: Saudi Arabia Cafes Market Size, by Value (USD Billion), 2018-2028F
Figure 2: Saudi Arabia Cafes Market Share, by Ownership, by Value, 2018-2028F
Figure 3: Saudi Arabia Cafes Market Share, by Chained Cafes, by Value, 2018-2028F
Figure 4: Saudi Arabia Cafes Market Share, by Sales Channel, by Value, 2018-2028F
Figure 5: Saudi Arabia Cafes Market Share, by Region, by Value, 2018-2028F
Figure 6: Saudi Arabia Cafes Market Share, by Company, by Value, 2022
Figure 7: Saudi Arabia Cafes Market Map, by Ownership, by Value, Market Size (USD Billion) & Growth Rate (%), 2022
Figure 8: Saudi Arabia Cafes Market Map, by Sales Channel, by Value, Market Size (USD Billion) & Growth Rate (%), 2022
Figure 9: Saudi Arabia Cafes Market Map, by Region, by Value, Market Size (USD Billion) & Growth Rate (%), 2022
Figure 10: Saudi Arabia Chained Cafes Market Size, by Value (USD Billion), 2018-2028F
Figure 11: Saudi Arabia Population, 2019-2022 (In Million)
Figure 12: Saudi Arabia Chained Cafes Market Share, by Sales Channel, by Value, 2018-2028F
Figure 13: Saudi Arabia Chained Cafes Market Share, by Region, by Value, 2018-2028F
Figure 14: Saudi Arabia Standalone Cafes Market Size, by Value (USD Billion), 2018-2028F
Figure 15: Saudi Arabia Standalone Cafes Market Share, by Sales Channel, by Value, 2018-2028F
Figure 16: Saudi Arabia Standalone Cafes Market Share, by Region, by Value, 2018-2028F
List of Tables
Table 1: Major Cafes Chains in Saudi Arabia, 2022
Table 2: Leading Online Food Delivery Platforms in Saudi Arabia, 2022

Companies Mentioned (Partial List)

A selection of companies mentioned in this report includes, but is not limited to:

  • Starbucks
  • Dunkin Donuts
  • Tim Hortons
  • Cafe Bateel
  • Costa Coffee
  • Molten Chocolate Cafe
  • Mochachino
  • Barn’s
  • Derby Coffee

Table Information