The Coffee Club opens in Egypt despite recent unrest

Australian café franchise The Coffee Club has opened its first venue in Egypt on the back of major political unrest, but the company is confident it can appeal to locals and tourists alike.

Founded in 1989, The Coffee Club has more than 280 stores in Australia and overseas. In the past 18 months, it has established a presence in China, New Caledonia and Thailand.

Now it has turned its attention to Egypt, opening its first café in tourist hotspot Tivoli Dome on Egypt’s north coast, which is regarded as a well-known international tourist destination.

The move comes after The Coffee Club sold a major franchise to Egyptian food and drink retail business Royal Gourmet, with 15 stores planned to open in Egypt over the next five years.

The first store is expected to generate more than 25 jobs for local residents.

Egypt has been gripped by major political unrest over the last few years, so the company’s decision to establish a presence there comes as a surprise.

But according to Ross Caldwell, international general manager of The Coffee Club, this is the perfect time for the business to enter Egypt.

“Coffee shops are an institution and Egyptian coffee drinkers have a discerning taste when it comes to the quality of coffee they drink,” Caldwell said in a statement.

“We want to create a welcoming place for locals, and a familiar place for any tourists that are looking for excellent coffee and great service.”

Coffee consumption in Egypt has been steadily increasing, with a recent report revealing coffee sales in Egypt have increased by 8.4% over the past year, to a total of $US33.67 million.

The figures come from Business Monitor International: Egypt Food and Drink Report Q2 2012.

While this figure may seem excessive, The Coffee Club points out it is largely influenced by coffee being the preferred social drink over alcohol, suggesting the company will market itself as an alternative to alcoholic drinks.

There have been recent calls in Egypt to ban tourists from drinking alcohol – which is already frowned upon in the Muslim country – although it’s unlikely a ban will be enforced.

In addition to Egypt, The Coffee Club is also planning to launch in Papua New Guinea, although there’s no word on when that is likely to happen.

The Coffee Club founder-director Emmanuel Drivas told StartupSmart earlier this year growth is continuing as discerning consumers search for good coffee and value for money.

“They’re not spending money on clothes and white goods, so they’ve got more time to sit down and have a coffee…. A cup of coffee is still something everyone can afford,” Drivas said.

“We know our business model works and believe it is well suited to numerous international markets, and our global expansion plans reflect that.”

“At the end of the day, it’s a simple sort of business… It’s all about great service, good food and excellent coffee.”

In 2011, The Coffee Club Australia achieved revenue growth of 8.1%, with total growth in sales of 14.2%. Turnover for the year was $344 million.

This year, The Coffee Club Australia expects to see revenue growth of 13.6%, while The Coffee Club Group and its associated brands expect to see revenue growth of 29% globally.

In Australia, the company is aiming to open a new store every fortnight for the next five years, targeting 500 stores by 2020.

The focus will be on new sites in Victoria and NSW, with an expected 25 new cafés opening their doors. Only 10% of the company’s stores are company-owned.