As the second largest commodity in the world after oil, coffee is big business.

Over the years, coffee houses have evolved from just being places to get your morning fix of java and a chocolate muffin.

Today's coffee houses have metamorphosed into gathering places, meeting rooms, art galleries, performance stages, and, most importantly, places to sit back and relax.

As the second largest commodity in the world after oil, coffee is big business, and the global market for speciality coffee beverages is estimated at $9 billion.

Coffee drinking is a traditional pastime in the Middle East, and combined with the region's penchant for shisha, it spells good news for local coffee houses. "Traditional local cafés continue to attract many loyal and new customers due to its authenticity, local atmosphere and traditional flair which might not be present in other speciality coffee houses," says Reeves Vaz, Operations and Training Manager, Second Cup.

But with the sharp increase in competition within the market, cafés have to constantly come up with innovative product offerings, themes and unusual merchandise. "With the addition of new entrants in the market, the competition level has also gained momentum as individual players compete for market share. This growth has driven the industry to offer more options within themed cafés. And while coffee continues to be the main offering, cafés are now adding a lot more to their cuisine and menus," says Mojtaba Asadian, CEO, Central Perk.
Social activity

Visiting a café is a much-loved social activity and an important part of daily life for some people. The UAE is a melting pot of cultural backgrounds that is reflected across various coffee outlets. "Both local and international cafés can be found across the UAE, with certain themed cafés attracting specific demographic of customers," says Asadian.

Simon Holroyd, Regional Manager, Costa Coffee, feels that the coffee retail industry in the UAE has been expanding at a startling rate over the past few years and there is no sign of this growth abating. "The expansion of Dubai, especially in new business hubs and residential communities is feeding the coffee culture in the country. There is still substantial room for growth in the region. Our expansion plans are closely linked to the development of the UAE and we will continue to develop our stores for as long as there are people to frequent them," he says.

The café industry has changed dramatically over the past few years, thanks to people's rising expectations and better knowledge of the café experience. Operators have responded to this by raising standards, and cafés are delivering their products with flair and panache in order to attract and retain customers.

Innovative offerings

"We are continually updating our offerings with innovative food products and exciting new drink ranges to keep our loyal customers interested and give them something new to sample. Cafés have also become more comfortable, ensuring guests stay longer and enjoy the atmosphere and ambience. This, also, has been driven by the customers, which can only be good for the industry as a whole," says Holroyd.

Apart from social meeting grounds, cafés have also metamorphosed into ideal places to do business. Most cafés offer Wi-Fi services and stock newspapers and magazines to help people remain connected to the outside world.

"We were the first to introduce Wi-Fi in our cafés which led to an increase in the number of customers and better-than-average customer spend per visit, because of the fact that Wi-Fi users spend more time in our cafés, thus increasing our business," says Radwan Masri, General Manager, United Restaurant Development. But Masri also feels that URD's franchises — Cinnabon, Seattle's Best Coffee and Zaatar w Zeit — don't attract large numbers of business patrons. "Our Wi-Fi access is restricted to an hour which can be renewed based upon the amount spent," he says.

Central Perk offers unlimited free Wi-Fi access to all of its customers. "This additional service adds value to the success of the business module as it allows the outlet to diversify its consumer base," says Asadian.

Second Cup has introduced Wi-Fi services at its outlet in Bin Hendi Avenue and Starbucks offers its customers wireless internet connections for laptop computers and PDAs through its iZone Wi-Fi services at all its outlets.

With the UAE becoming more dynamic and cosmopolitan, there is a growth in the coffee take-out sector. Coffee Planet is a growing coffee company in the Middle East, specialising in providing turnkey coffee solutions to all food service operations.

Gourmet coffee

"Coffee Planet is bringing premium gourmet self-serve coffee to a new market by targeting consumer outlets that currently do not have access to gourmet coffee," says Matt Yorke Smith, Operations Director, Coffee Planet. Last year, the retail heavyweight Tesco installed automated self-serve gourmet coffee-on-the-go in 150 of its stores in the UK in a bid to undercut Starbucks.

Independent market research commissioned by Tesco also showed that it was possible to sell high quality coffee at less cost than at the major coffee bars and with lower investment and outgoing costs.

The Coffee Planet proposition is being recognised as a means for additional revenue generation, and its kiosks have been set up at Wollongong University, Ikea and ENOC and EPPCO stations across the UAE.

Favourite beverage

Coffee continues to be among the world's favourite beverages, and the market has incredible potential for growth and improvement. Reeves Vaz, Operations and Training Manager, Second Cup, says their company's research shows that coffee drinkers expect more from their caffeine fix. "People want better quality, variety, taste and access to quality coffee. Most coffee drinkers are willing to pay more for a great cup of coffee," he says.

Did you know?

- Coffee was discovered by accident. An Ethiopian goat herder, Kaldi, noticed his goats leaping around after eating certain red berries. Curious, he ate the berries and discovered
he was stimulated.

- For several centuries, Yemen was the world's primary source of coffee.

- The people of Turkey were the first to make a drink out of coffee beans. Funnily enough, Turkish law required a man to provide his wife with enough coffee, failing which he
could be divorced.

- Arab merchants and traders guarded the secrets of coffee so carefully that the Dutch, the French, the Brazilians and the Italian traders had to eventually smuggle the seeds out.

- The first coffee house was established in Damascus in 1530.

- Coffee is naturally rich in anti-oxidants (anti-oxidants help fight free radicals, one of the main reasons for aging).

- Courtesy: Nescafe