Tradition Meets Innovation in Turkey’s Booming Coffee Market
Amid economic challenges, Turkey’s branded coffee shop market demonstrated remarkable resilience in 2023, positioning itself as one of Europe’s fastest-growing markets by outlets. This success, rooted in a blend of tradition and modern trends, reflects Turkey’s unique position in the global coffee culture. qahwaworld delves into the reasons behind this thriving market, where old traditions harmoniously coexist with new trends.
A Historical Foundation
The journey of coffee in Turkey began nearly 500 years ago when Özdemir Pasha, the Ottoman governor of Yemen, introduced the first coffee beans to Istanbul. Özdemir Pasha, a Mamluk Circassian and the father of Grand Vizier Özdemiroğlu Osman Pasha, was captivated by the taste of Yemeni coffee. He brought it to Istanbul, where a new preparation method involving cooking coffee in jugs and coffee pots led to the creation of what is now known as Turkish coffee. The establishment of coffeehouses, starting from Tahtakale and spreading throughout the city, helped popularize coffee among the populace.
Traditional Turkish coffee, brewed in an ibrik and served with sediment, remains a staple of daily life, with a small cup still costing as little as TRY 7 ($0.22). However, the landscape has evolved significantly. International coffee chains like Starbucks, Caffè Nero, and McCafé have found a firm foothold alongside domestic chains such as Kahve Dünyası and Espressolab. In major cities, Turkish consumers are as familiar with a caffè latte as they are with traditional Turkish coffee.
Economic Resilience and Market Growth
Despite inflation soaring above 65% in February 2024 and average beverage prices rising by 25% over the last year, Turkey’s branded coffee shop market grew by 9% in 2022-2023 and 7.3% over the last 12 months, surpassing 3,100 stores. This growth is fueled by both domestic and international investments.
Starbucks leads the market with over 700 stores, making Turkey its second-largest European market after the UK. Yet, domestic brands hold more than half of the market share, showcasing the strong presence and growth of local operators.
Blending Tradition with Modern Trends
The Turkish coffee market has aligned with the global demand for premium and specialty coffee. Data from the Turkish Statistical Institute (TÜİK) shows a quadrupling of overall coffee consumption since 2012, with coffee imports jumping 193% between 2008 and 2019. This surge has paved the way for both international and domestic brands to flourish.
Espressolab, a prominent Istanbul-based brand, operates around 160 stores in Turkey, offering a mix of traditional Turkish coffee and modern beverages like flat whites and lattes. The brand’s international expansion, with plans to open 100 new stores in Morocco and agreements in 13 other countries, highlights the global appeal of Turkish coffee culture.
Innovation Anchored in Heritage
Distinct demographics are shaping Turkey’s evolving coffee landscape, with age, locale, and even class underpinning consumption patterns. Major city centers, popular with young and educated Turks with a global outlook, have seen specialty coffee shops thrive. Conversely, traditional Turkish coffee maintains a stronghold in the more conservative Anatolian regions and smaller cities, where its cultural significance, strong flavor, and affordability remain popular.
From my observation, Turkish coffee consumption is very low among young people between the ages of 18-25. However, the gap is narrower in less affluent urban areas,” says, Old Java Coffee’s Bulut.
Cenk Giringol echoes this sentiment and observes that beyond the urban hubs in Anatolia, local chains are experiencing stronger growth in comparison to the international brands. “These [consumption] changes take place faster in large cities where there is generally more money. That said, outside of the big cities, especially in Anatolia, the rate of Turkish coffee consumption is very high and it remains the most popular coffee consumed in Turkey – around 70% of all coffee consumed.”
While traditional local coffee shops maintain strongholds in smaller Turkish cities for now, Murat Kolbaşı believes younger consumers will lead a gradual shift towards more contemporary Western-style coffee shops.
“Coffee chains based abroad or in Turkey can expand their business as they maintain a certain standard of taste and service. However, smaller cities still prefer the taste of their local coffee. We predict this situation will change in the coming years with the population becoming increasingly younger on average, the influence of modern culture and the urge of young people to feel they belong to a class.”
The Role of Domestic Brands
Domestic chains have leveraged the growing popularity of premium and specialty coffee introduced by overseas brands to carve out a share of the evolving coffee culture. Brands like Kahve Dünyası, Arabica Coffee, Espressolab, and MOC have stood out by blending local coffee traditions with international trends. For instance, Espressolab offers traditional Turkish coffee alongside single-origin and milk-based beverages, such as flat whites and lattes.
The international appeal of Turkish coffee brands is evident in Espressolab’s expansion plans. The brand has signed agreements to open 100 new stores in Morocco and expand into 13 other countries, including Libya, Tunisia, Algeria, and Sudan, with investments projected to reach $10 million by 2027.
Cultural Significance and Future Prospects
Turkish coffee remains deeply ingrained in the country’s culture. Murat Kolbaşı, Chairman of the Board of Directors at Arzum, emphasizes that Turkish coffee plays a significant role in social and personal rituals. The annual per capita coffee consumption in Turkey has increased fourfold over the past decade, reaching 1.5 kg today, with Turkish coffee accounting for 70% of this consumption.
However, the younger generation, particularly those aged 18-25, is driving a shift towards espresso-based, milk, and flavored coffee. This trend is more pronounced in major cities, while traditional Turkish coffee maintains its stronghold in conservative regions like Anatolia.
A Balanced Market
The rise of international coffee chains has not diminished the popularity of traditional Turkish coffee. Instead, it has complemented it. International players, by including Turkish coffee in their menus, have helped boost its consumption and global recognition. TÜİK data shows that Turkish coffee exports rose to $400 million in 2023, reflecting the positive impact of both local and international cafés.
Moreover, international chains like Starbucks have played a pivotal role in shaping consumer perceptions and market dynamics in Turkey. They have enabled coffee knowledge and expertise to spread widely, influencing both the growth of the market and the quality standards upheld by domestic brands.
Conclusion
Turkey’s coffee market, rooted in centuries-old traditions and embracing modern trends, continues to thrive despite economic challenges. This unique blend of heritage and innovation positions Turkey as a compelling market for coffee businesses looking to scale both domestically and globally. As the market evolves, it is clear that Turkish coffee will remain a beloved staple, enriched by the diverse offerings of modern coffee culture. The interplay between traditional Turkish coffee and the rise of specialty coffee shops creates a vibrant and dynamic coffee scene, promising sustained growth and continued cultural significance.
