Issue 1, 2013. February-March



From the traditional tiny cups of Turkish coffee to caffè macchiato to go, the coffee business is booming in Tbilisi. Is there room for it to grow? And does that mean Starbucks is on its way?

Maia Edilashvili

Wake up and smell the coffee, Tbilisi.

For a city where coffee has meant fake Turkish grounds or Café Pele instant for the past two decades, a new love affair with Italian brews and deep, rich and foamy coffee drinks is taking over - from higher sales at supermarkets to new cafes and coffee shops.

The new business has been a boom for coffee imports, according to GeoStat, the state statistics body. Instant coffee imports have doubled from $6.62 million in 2006 to $15.86 million in 2011, the latest available figures.

The import of unroasted and roasted coffee beans has also grown- from $6.45 million in 2006 to $ 13.11 million in 2011). No data is available for 2012, although studies among coffee drinkers indicate the numbers will continue to grow: the average annual coffee consumption per household in Georgia was 2.7 kg in 2011, up from 2.5 kg in 2006.

Iliauni Business Review, an online portal of Ilia State University's Faculty of Business, studied coffee consumption trends at supermarkets in November 2012, concluding that, out of 1,038 buyers interviewed, 86 percent- or 187 -said that they are coffee drinkers, with 28 percent drinking coffee more than twice a day.

Nearly half the respondents buy coffee based on taste, while 13 percent are guided by price.

Enter Thee, Starbucks?

Georgia has always had a love affair with coffee, especially the tiny tumblers of Turkish brew whose coffee grounds are said to hold the key to the future, as well as a healthy dose of caffeine.

But unlike coffee connoisseurs in the West, Georgians were largely limited to instant Nescafe if they wanted their morning cup of joe in any other form. The new fascination with coffee drinks, however, is changing that.

Lali Pipia, a manager at Latte, a coffee house in the café-heavy Vake neighborhood, told the business of coffee brewing is "bustling." "If I were to assign a score, I would give it nine out of 10," she said.

According to Pipia, the café serves around a thousand coffee drinkers a month, who consume five kilograms of coffee beans. The most popular brews are cappuccino, latte, espresso and Americano. Long-standing cafes, like Coffee House on Kazbegi Avenue in Saburtalo, which opened in 2002, say the growing number of cafes has not gone unnoticed - even though they have not yet resulted in diminished sales."Back in the 90s, we simply had no rivals. Now competition is increasing but our clients remain loyal to us," said Tea Kvatadze, manager at Coffee House.

Coffee House is the city's veteran brand in this business, with its first café having opened in 1998 in Vake, and two years later a second in Vera district. The café on Kazbegi Avenue, apart from serving drinks, also sells coffee grounds which are imported from the US and has daily sales averaging around two kilograms. Zurab Liparteliani, owner of Coffee Time Starbucks Coffee, also in Vake, said the growing trend of high-end coffee drinkers led him to invest $40 thousand in the coffee business. He opened his café in November, and hopes sales will eventually lead to a real Starbucks license - the first of its kind in Georgia.

"For a while we will be merely observing the situation in order to understand whether the market is ready to expand," Liparteliani told The key indicator, he stressed, is turnover. Once sales reach 60-70 kg monthly, they will consider expanding the business, which may also include purchasing the Starbucks license. Currently, the café consumes 10 kg coffee per month.

Reaching that magic number has been a challenge in the past: the much awaited Starbucks café in Tbilisi Mall has been postponed, reportedly due a perceived lack of potential customers.

"We had open negotiations, but Starbucks thinks that the Georgian market is not ready for them yet. We think it is but they have their standards," Mariam Kutateladze, marketing manager at Tbilisi Mall, said. Starbucks, according to her, did not elaborate what would be the desired indicators that Georgia is "ready."

Coffee drinkers in Tbilisi, however, remain hopeful: there are over 12,000 'Likes' on two Facebook pages dedicated to bringing Starbucks to Tbilisi.