Saudi coffee market valued at $3.9 bln

Bonnon Coffee is a local Saudi brand that competes with global coffee chains

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Coffee consumption has risen sharply in the Kingdom of Saudi Arabia whereby 18,000 tons worth $54 mln are imported. The growth in coffee processing has helped boost the Saudi market for cafes to a notable $3.9 bln.

The latest statistics issued by the International Coffee Organization (ICO) showed that 1.4 bln cups of coffee are consumed a day worldwide.

Within the coffee shop industry, Bonnon Coffee – part owned by the SEDCO Holding Group - is a local Saudi brand that competes with global coffee chains.

The company was established in 2006 and Salem bin Mohammed Bin Mahfouz serves as chairman of its management board. It has grown steadily ever since to compete with major multinational companies by opting for high-quality products and providing constantly its clientele with outstanding service.

The CEO of Bonnon Coffee Ltd Khalid Bin Hamad has forecasted that coffee sales would rise by 77 percent in 2016, thereby overtaking tea sales, which are projected to rise by 49 percent only amid the stiff competition of global and local companies. Given the positive outcome reflected in local consumption, these sales are expected to increase especially in the areas targeted for development by the government.

CEO of SEDCO Holding Group Anees Ahmed Moumina reckons that the current proliferation of cafes is normal because working conditions have contributed to the widespread use of cafes among of Saudi youths. He further said: “Among the company’s top priorities next year will be continued strategic growth through the installation of more outlets, the introduction of advanced ways of giving prominence to the Bonnon brand and focusing on the company’s core business, particularly in Bonnon coffee shops, which provide a drive-thru sales service”.

Khalid Bin Hamad also indicated that the company, under its brand “Bonnon Coffee” provides its clientele with all varieties of coffee products that suit all palates and mindsets under one commercial roof that values authentic culture. It also values the palate’s natural transformation in modern times.

He said Bonnon Coffee has devised outlets in a bid to satisfy the growing demand for fast coffee through specialized small sale channels both indoor and outdoor, to reach out faster to the largest number of consumers and at the lowest cost, in order to compete for a very limited segment of prime locations that are suitable for a drive-thru facility. Its brand coffee shop located in Red Sea Mall was also recently renovated to add a modern touch to its atmosphere and upgrade its menu offering.

Bonnon Coffee is planning to come up with new varieties of coffee delicacies based on clear commercial concepts and vision. The company has sought throughout its foundation stage and development to secure its own brand “Genuine Coffee Habitat” by coming up with all modern and genuine coffee products of the highest quality and in consonance with consumer satisfaction.

Bonnon Coffee branches currently stand at 14 in the Western Region. Sales growth at most of Bonnon’s outlets ranged between 12 percent and 35 percent in 2013 and operating profits rose to 28 percent from 6 percent three years ago. The company has ambitious plans to expand in both Saudi Arabia and neighboring markets.

The story was originally posted on the Saudi Gazette on Dec. 9, 2014.

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