- The GCC coffee market has become one of the fastest-growing in the coffee industry, attracting significant investment from brands, roasters, and hospitality operators.
- The MENA coffee market is forecast to grow up to a 7.75% CAGR through 2033, but conflict-related disruptions are slowing expansion and increasing costs.
- As logistics, tourism, and investment confidence come under pressure, coffee businesses are shifting their focus from growth to resilience.
For much of the last decade, the Gulf Cooperation Council (GCC) region has been one of the coffee industry’s most attractive expansion markets. International brands, specialty roasters, equipment manufacturers, and investors have poured significant resources into countries such as the UAE and Saudi Arabia, attracted by rising coffee consumption, strong spending power, ambitious tourism projects, and rapidly developing specialty coffee cultures.
However, the ongoing conflict in the Middle East is beginning to test many of the assumptions that underpinned that growth. Shipping disruptions, higher freight costs, reduced tourism, delayed projects, and growing uncertainty are creating new challenges for the GCC coffee market that had become accustomed to rapid expansion.
As investors and operators adapt to a more uncertain environment, the conflict is exposing how dependent the region’s coffee boom has become on stable trade routes, international mobility, and investor confidence.
Conflict is disrupting the GCC coffee market’s growth story
The GCC’s rise as a coffee powerhouse has been difficult to ignore. Over the past decade, countries such as Saudi Arabia and the UAE have experienced a surge in specialty coffee consumption, café openings, hospitality investment, and consumer spending.
For coffee businesses, the region offered a compelling combination of high disposable incomes, ambitious tourism strategies, and a growing appreciation for specialty coffee. International brands expanded aggressively, while roasters, training providers, equipment distributors, and investors increasingly viewed the GCC as one of the industry’s most promising growth opportunities.
According to Mordor Intelligence, the Middle East and North Africa (MENA) coffee market was forecast to grow at a compound annual growth rate of 7.75% through to 2031 – however, the ongoing conflict and instability in the Gulf region have exposed how much of both past and predicted success depends on conditions beyond the coffee industry’s control.
Bogdan Prunila is Managing Director of Coffee Market Innovations (CMI), which operates across the UAE, Oman, and Saudi Arabia. According to him, the most immediate impact has been felt in logistics.
“Logistics has been the area most affected by the conflict, impacting transit times, freight availability, and overall supply chain efficiency,” he says.
The disruption mirrors broader challenges facing global trade. Shipping routes through the Gulf of Oman and Strait of Hormuz have faced significant disruption, forcing many vessels to take longer and more expensive routes around southern Africa.
For a region heavily dependent on imported coffee, equipment, and hospitality products, the consequences have been difficult to avoid.
“These disruptions significantly increased landed costs,” Bogdan says. “While roasters and cafés absorbed part of the additional expenses, some of the cost increases were ultimately passed on to consumers.”
Growth has stalled – and survival is taking priority
The GCC coffee market continues to grow, but growth is no longer coming as easily as many businesses had anticipated. And now, rather than focusing on expansion, many operators are now concentrating on resilience.
According to Bogdan, roasters and cafés have responded by diversifying suppliers, increasing inventory levels, optimising production planning, strengthening local partnerships, and reassessing pricing strategies.
“I believe this is an unfortunate exercise for the coffee industry, but will make the market healthier,” he says.
“Companies that can adapt to the situation and make the right decisions will be stronger and gain a good pace when things get back to normal.”
Tourism has also become a growing concern. While regional demand remains relatively strong, international tourism has softened in some markets, particularly during what would normally be peak hospitality periods.
“Coffee consumption in HORECA depends on tourists during this period,” Bogdan explains. “At this point, all hotels are working on offers for the local community, and coffee consumption is relying mostly on residents and regional tourism.”
This shift matters because much of the GCC coffee market’s growth story has been closely linked to tourism, hospitality, and international mobility. As visitor numbers become less predictable, businesses that built expansion plans around continuous growth are being forced to adjust.
The pressure is not being felt equally across the market. Larger operators typically have greater flexibility to absorb higher costs, secure inventory, and diversify supply chains. Smaller roasters and independent coffee shops often have fewer options.
“Independent coffee shops, smaller roasters, and businesses with limited purchasing power are likely to be the most affected,” Bogdan says.
Growth no longer feels guaranteed
Perhaps the most significant consequence of the conflict is its impact on investment confidence. For years, the GCC coffee market attracted investment on the assumption that growth would remain strong, tourism would continue expanding, and hospitality demand would steadily increase.
While many of those fundamentals remain intact, uncertainty has made investors more cautious. Logistical challenges, reduced cash flow, higher operating costs, and market uncertainty have all contributed to slower decision-making around expansion and capital investment.
“Investment confidence has certainly been affected, with many café, hotel, and restaurant projects – both large and small – being delayed or reassessed,” Bogdan says.
That does not mean investment has stopped. Many investors continue to move forward with growth plans, viewing current challenges as temporary rather than structural.
“They remain confident in the GCC coffee market’s long-term fundamentals, including strong consumer demand, a growing specialty coffee culture, and continued investment in tourism and hospitality,” Bogdan says.
This reflects the central tension facing the region’s coffee industry. The conflict has not fundamentally changed the GCC coffee market’s long-term potential, but it has exposed vulnerabilities that many businesses may have previously underestimated.
For years, the region was viewed primarily through the lens of opportunity. Today, even as calls are made to cease the current conflict, investors are also being forced to think about resilience and the cost of operating in an increasingly uncertain environment.
The GCC coffee market may remain one of the world’s most important. However, for businesses that invested heavily in the region expecting uninterrupted expansion, recent events have been a reminder that even the industry’s most promising opportunities can be vulnerable to forces far beyond the café.
