A student report analyzes demand, imports, café margins, and investment opportunities in Saudi Arabia’s coffee sector
On the occasion of World Coffee Day 2026, Equity Hub at Yamamah Insights presents a financial and economic report titled “From Bean to Margin”, prepared by student Mohammad Alghaihab @Mohammad Alghaihab and student Noof Alanazi @Noof Alanazi from Yamamah University – Riyadh Campus, under the supervision of financial and economic analyst Hamad Alsaeed @Hamad Alsaeed. The report examines the Kingdom’s coffee sector from a perspective that goes beyond consumption volumes and the number of cafés to address a deeper question: Where is value created, and how much remains of revenue after costs?
The report starts from the fact that coffee in the Kingdom is no longer merely a consumer product; it brings together a deeply rooted social tradition, a broad hospitality market, and a value chain extending from cultivation and imports to roasting, packaging, cafés, and digital commerce.
The report notes that the value of point-of-sale transactions in the restaurants and cafés category reached approximately SAR 84.83 billion in 2025, compared with SAR 83.23 billion the previous year, while the number of transactions rose to 2.818 billion. It observes that transaction volume grew faster than transaction value, making visit frequency and operational efficiency more important when assessing sector performance, while emphasizing that central bank data covers restaurants and cafés together and does not represent the coffee market alone.
On the supply side, the value of the Kingdom’s imports under the HS0901 customs heading for coffee rose from approximately $288.6 million in 2020 to $606 million in 2024, reflecting expanding demand for coffee products and inputs. The report also reveals a relative concentration in import sources: Ethiopia alone accounted for roughly half of import value in 2024, while Ethiopia, Brazil, and Colombia together approached two-thirds of the total.
At the same time, Saudi coffee production is expanding, with more than 1.3 million fruit-bearing coffee trees and annual production exceeding 870 tons of green coffee, according to the data cited in the report. However, the economic analysis does not view local coffee as a direct quantitative substitute for imports so much as an opportunity to build a high-value Saudi product grounded in origin, quality, and identity.
From a Beautiful Café to Branch Economics
One of the report’s key ideas is that the next phase of competition in the café sector may not be decided by décor or the number of branches alone, but rather by what the report calls “branch economics.”
This refers to each branch’s ability to generate sales and operating margins that justify the capital invested in it, measured through indicators such as daily order volume, average order value, the ratios of material, labor, and rent costs to sales, same-store sales growth, and the payback period for the cost of establishing a branch.
The report explains the concept of branch EBITDA, a measure that helps determine whether a branch generates operating profit from its core activity before accounting for certain financial and accounting items. It also presents an educational model showing how changes in order volume or average bill size can significantly affect a project’s revenue and profitability.
The Opportunity Is Bigger Than Opening a Café
The report does not limit investment opportunities to opening cafés; instead, it maps a broader landscape that includes roasting, packaging and manufacturing, B2B supply, café technology, loyalty programs, training, packaged products, high-value Saudi coffee, and regional exports.
The idea is that building multiple revenue channels can reduce a project’s reliance on a single location or a limited number of seats, but it also requires more disciplined management of inventory, distribution, quality, and capital.
The report also addresses a range of risks, including global coffee price volatility, supplier concentration, rising rents and labor costs, delivery commissions, and rapid expansion before confirming the success of the operating model.
The report concludes that the question that should precede an investment decision in the coffee sector is not merely: Is the sector growing? Rather: Which business model can convert this demand into recurring cash flows and an acceptable return on capital?
Demand may bring customers into the café, but operational discipline is what turns the bean into a profit margin.
This report is an educational and academic work and does not constitute investment advice or an invitation to buy or sell an asset or establish a business.
From Bean to Margin: Yamamah Students Examine the Economics of Coffee in Saudi Arabia
