Dubai: On any given Friday night, large groups of Dubai’s residents descend on their favourite watering hole to enjoy a stimulating drink or two, and talk into the early hours.
But these aren’t pubs — they’re coffee shops.
Dubai’s recently opened Nightjar Coffee takes this metaphor to its logical conclusion, with baristas more closely resembling barmen as they pull half pints of coffee from taps at the bar. The green leather stools and black tiled walls complete the polished, gastropub look.
The new cafe, located at Alserkal Avenue, stocks a wide selection of coffees, both hot and cold, that make up a drop of the $100 billion (Dh367.3 billion) global coffee market.
“There are coffee shops that serve coffee, and there are coffee shops that know coffee,” said Leon Surynt, founding executive director of Nightjar Coffee. “We know and love our coffee.”
For the bean counters, over 2.25 billion cups of coffee are consumed globally every day, while the global market value of the drink is expected to see an annual growth rate (CAGR) of 5.5 per cent, according to research by Mordor Intelligence.
For much of the past 50 years, coffee beans were the second-most valuable commodity exported by developing countries, after crude oil. Two exchange-traded funds (ETFs) directly track the performance of the coffee market, and unroasted coffee is traded in futures contracts across many of the world’s largest financial hubs including New York and London.
Starbucks is largely credited with heralding a renaissance in coffee, attracting young, tech-savvy customers around the turn of the century. The boom in branded java saw the company grow from around 2,000 outlets in 1998 to over 28,000 in 2018, with soaring revenues of $22.3 billion, up by 1,615 per cent over the past 20 years.
But the reign of Starbucks is under threat, especially in coffee-crazed Dubai. Fans say that the likes of Nightjar — independent sellers offering craft coffee in stylish surroundings — make the Starbucks of the world, with their drab, identikit furniture and basic coffee selection, feel ordinary.
“Mass produced chain coffee shops will always have an important role to play for mainstream coffee drinkers,” Surynt said.
However, discerning consumers are shifting towards something more refined, and less mass-market, he said. “In recent years, there has been a general increase in quality, as well as a rapid growth in specialty craft coffees. Consumers are becoming more knowledgeable about coffee,” Surynt added.
Demand for speciality coffee continues to grow as younger drinkers search for new styles, with 48 per cent of US millennials reporting that in the past 24 hours, they had drunk a cup of coffee they considered to be gourmet, according to a recent National Coffee Association (NCA) survey.
Long history in Mideast
Long before craft coffee existed, however, the people of the Middle East were boiling the bean and drinking it. Evidence suggests that the practice originated in Yemen in the 15th century, from where it quickly spread to Cairo, Makkah, and the rest of the Middle East.
Such is the enduring popularity of coffee in the UAE that the dallah, Arabic for coffee pot, is seen on the back of all one dirham coins.
This affinity for the drink is reflected in the number of shops in Dubai: Hundreds of cafes line the streets of Jumeirah, while malls such as Dubai Mall appear to have almost as many coffee shops as they do fast food restaurants.
And while brands like Starbucks have enjoyed growth of more than 70 per cent in the UAE in recent years, their dominance is increasingly under threat from independent sellers. Outlets such as % Arabica, Roseleaf Cafe, the ‘Breaking Bad’-inspired Walter’s Coffee Roastery, Mokha 1450 (which claims to sell the world’s most expensive coffee), and Stomping Grounds have all enjoyed a roaring trade thanks to the recent rise in demand for craft coffee.
Putting up a fight
But Starbucks isn’t backing down. The Seattle-based brand says that its customers in the UAE demand something new and unexpected each year.
“Starbucks Reserve stores meet that demand for innovation, and introduce the Roastery coffee experience bar from Seattle, US…[including] the company’s line of rare and small lot coffees — only available in limited quantities,” and a range of brewing styles, including clover, pour over, siphon, and chemex, the company said.
Currently, Starbucks has five Reserve Bar stores across the Middle East, including one in Dubai. The company said it would continue to expand its Reserve brand across the region with more store openings. “They are a great way for us to emphasise our coffee leadership.”
And Starbucks is not just in the business of serving coffee: They’re selling it too.
Reserve coffee is the company’s line of rare and small lot coffees, which are only available in limited quantities. Each coffee is sourced from a small coffee growing region in Latin America, Africa and the Pacific islands, and is sold by the bag in Starbucks Reserve stores.
Market watchers say the demand for artisanal coffee with a specific provenance, such as Guetamala’s celebrated El Injerto farm, and a specific roaster, such as California’s Blue Bottle Coffee, is set to continue growing, in a movement being dubbed ‘third-wave coffee’.
In a sign of the times, Swiss food giant Nestle, owner of the ubiquitous Nespresso machines, acquired a majority stake in Blue Bottle last September for a reported $425 million.
Surynt said that the 2017 acquisition was just another example of a major multinational looking to shore up its portfolio by buying a successful company in the thriving coffee sector.
Analysts say that with attractive margins and a dedicated following, the Blue Bottle deal is one of the clearest signs yet of how third-wave coffee has become big business.
Like Blue Bottle, Nightjar has dreams of becoming much more than just a coffee shop.
The company, which already sells beans to other coffee shops around Dubai, is branching out into more sophisticated business to business products.
Surynt said that Nightjar has already installed a cold brew tap in Zuma, the high-end Japanese restaurant located in DIFC, for the bar to use when making espresso martinis. The founder said that he was in discussion with a number of other hotel chains and restaurants around supplying them with Nightjar coffee concepts.
Surynt said that eventually, he sees Nightjar selling branded, ready to drink products direct to the consumer.
“There may come a time when we will offer Nightjar coffee in personal packages such as glass and can, but we believe that the segment and the habit will be built predominantly out of the home in offices, cafes and areas of leisure,” he said.
For now, however, the company says it will focus on delivering a “damn good cold brew experience on tap,” and will “only expand into packaged cold brew when we believe consumers are ready and we can guarantee the same high quality coffee experience.”
By looking at the company’s investors, one can get a clear glimpse in to the scale of Nightjar’s ambition.
Jonathan Lawlor, investor and partner to Surynt, is a 20 year veteran of Coca-Cola, where he most recently oversaw the company’s Middle East and North African marketing operation before leaving to start his own consultancy.
“Nightjar is a very young business and will benefit greatly from having the experience of Jonathan onboard as we scale up our business. He will help Nightjar as we grow to become a major coffee brand,” said Surynt.