ARUMI COFFEE

Proposal

NOVEMBER, 2021
KURNIAWAN ARIF MASPUL
TABLE OF CONTENTS

Specialty Coffee Market ................................................................................................... 2

Core Values and Market Positioning ................................................................................ 3

Potential Revenue Streams ............................................................................................. 4

Brand Risk Analysis ......................................................................................................... 5

Risk Management Solutions ............................................................................................ 7

Five Year Goals ............................................................................................................... 9

Budgeting ....................................................................................................................... 11

The Team ....................................................................................................................... 13

References ..................................................................................................................... 17

1
SPECIALTY COFFEE MARKET

UAE is undoubtedly becoming a mecca for specialty coffee culture in the Middle East
region. With unprecedented growing demand for specialty coffee, the GCC region and
Dubai in particular, has seen rapid growth in local and foreign investments in various
business models within the market and swiftly became a hub for the coffee industry in
the past 5 years.

This significant cultural shift in MENA has seen a considerable increase in consumption
of specialty coffee, with sales growing twice as fast as the global average (Comunicafe,
2019). By 2021, the coffee industry in the Middle East is expected to grow to $44 billion,
according to Euromonitor International.

With the pandemic bringing historic changes to the socio-economic situation in the
world, coffee industry in UAE has shown high adaptability to the new challenges as
demand went into e-commerce. In 2020, the e-commerce market in UAE for coffee hit a
record $3.9 billion – a strong increase of 53% - and constituted an impressive 8% of the
total retail market share, according to Dubai Media Office. This proves the customer
loyalty and strong purchasing preferences of the UAE coffee consumer.

Meanwhile, the specialty coffee community continued its consistent growth among both,
local and expat communities. As the public is getting informed and enthused by the art
and culture of specialty coffee, the increasing sales of various machines and
accessories for brewing confirm that this trend isn’t going anywhere. Specialty coffee
has become a staple in the modern lifestyle as an anchor in terms of remote work or
social setting, hobby, or cultural pastime.

As UAE specialty coffee community growth continues impressing the world with its
consistent and rapid growth, Specialty Coffee Association announced the World of
Coffee 2022 to be hosted in Dubai. This will provide a historic opportunity for
homegrown brands in the region to position themselves as international players in the
specialty coffee market.

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The establishment of the DMCC Coffee Center is another strong indicator and facilitator
of specialty coffee market growth in the region. As a government incentive program for
the growth of the specialty coffee sector, it includes a state-of-the-art coffee academy
and various innovation programs to further the science and skill of specialty brewing.
This shows further opportunities in research and development of niche specialty coffee
production as well as new business models, - a unique possibility of development of
lucrative innovative solutions within this booming sector.

Within the specialty coffee industry, the roastery holds a key role in market positioning.
Whether it’s a B2C or B2B model, the average order value will be heavily based on the
art of the roasting. Even though UAE roasteries often appear in the analysis of
international coffee communities, currently, coffee roasters in America and Europe
dictate 70% of the final selling price for specialty coffee products in the world. Given the
dynamic growth of the specialty community in the MENA region, changing global
environment and UAE’s hands-on incentives in furthering the industry and innovation
within it, - there is potential of a power-shift, when it comes to price positioning, among
the specialty coffee roasting services that will drive the margins higher.

CORE VALUES AND MARKET POSITIONING

As the consumers are well-versed in the specialty coffee industry, there are certain core
value points and business practices that cannot be compromised as it will affect the
desirability of the brand.

- Arumi Coffee brand must establish itself and remain a sustainable specialty coffee
value chain from farm to cup.
- Consistency of taste and quality of the specialty coffee menu items must be a staple
of Arumi Coffee, which can be reached through skilled sourcing/logistical solutions
and establishment of exceptional roasting/brewing standards within the brand.
- High quality and fresh specialty coffee roasting must be at the core of Arumi Coffee
brand’s B2C and B2B operations

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- As the art of specialty coffee requires mastery of skill, the emphasis on experienced,
enthusiastic and SCA certified staff must be a staple of Arumi Coffee.

POTENTIAL REVENUE STREAMS

Diversification of revenue streams without compromising the above-mentioned core

values of Arumi Coffee will reduce risks in the start-up phase and increase organic
growth opportunities:

- Direct customer sales of specialty coffee menu as well as pastry items made fresh
by a Arumi’s own pastry chef.
- Arumi’s roastery offering B2B beans and pastry sales to local F&B outlets
- E-commerce sales (wholesale and individual sales) through a modern web and
social media outlet.
- Through the next two years, Arumi will develop its outlets and create opportunities
for the global community to build and develop specialty coffee knowledge through
the coffee value chain in Arumi Coffee.
- Coffee Subscription: In addition to selling roasted coffee beans (250gr and 1kg size)
for individuals through retail and wholesale, Arumi can make weekly/monthly
subscriptions for consumer needs used by the subscription package delivered fresh
to their doorstep.
- Coffee Hub and Event Hosting: Besides providing intensive courses through the
Specialty Coffee Association program, Arumi Coffee can give regional hub and
global coffee events. In addition to strengthening branding, it will also offer a strong
diversification in understanding local and global consumers.
- Upon establishment of a strong brand and operations, Arumi Coffee can offer
franchise opportunities to retailers worldwide.

4
BRAND RISK ANALYSIS

Based on the expertise of the specialty coffee community insiders, below are the most
common mistakes and risks observed de-facto among businesses that had a direct
effect on bottom lines and growth rates.

UNFIT OR DYSFUNCTIONAL TEAM

The most common and hard-hitting factor among new specialty coffee outlets is
ineffective team dynamic or unfit team members. The first years of building a brand in
an up-and-coming industry within unprecedented market conditions are crucial to the
successful growth and maturing of the business. With that in mind, engaging a team
that doesn’t have effective internal communication and/or that requires micro-
management will hit the overall customer experience and quality of service.

ATTEMPTING TO G ROW T OO Q UICKLY

Despite the growing demand, any business outlet in a metropolitan setting will be faced
with serious competition. In an attempt to “win the race”, specialty coffee shops
frequently attempt scaling while the operations and brand identity have not, yet, gained
proper foundation and recognition among the customer base. The average customer of
the specialty coffee market is well-formed in their preferences and have high standards
of overall customer experience. If a compromise is made anywhere in the quality and
values of the brand in order to increase revenues – there will be an immediate negative
shift in the loyal customer base.

INCONSISTENCY IN Q UALITY OF M ENU I TEMS

Specialty coffee industry at its core is a premium consumer market, where brand is built
on consistency of sustainably sourced and beautifully served rich flavor. The specialty
coffee experience is frequently a therapeutic and self-indulgent artisanal experience that
the average customer is willing to pay premium price as a refuge and culinary treat. One
poor experience is enough for the customer to re-consider and start shopping for
comparable substitutes at other specialty coffee outlets.

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INCONSISTENCY IN C USTOMER C ARE

As specialty coffee has become a staple of modern lifestyle, it must live up to the
expectations of a premium service that comes with it. The experience of indulgence in
an artfully prepared cup of coffee can be completely overwhelmed by sub-par customer
service. When the service does not match the craftmanship of the coffee – the
impression of the taste gets affected, as well. The customer care is often overlooked as
secondary in the list of priorities, while in fact, it should be another element that elevates
and emphasizes the specialty coffee experience.

UNCLEAR P OLICIES AND S TANDARDS

In day-to-day operations, occurrence of occasional complaints or conflicts of interest are

inevitable, and they can arise from both individual and business customers. When
standards and policies are unclear and not defined with precision, these can trigger
stressful and brand-affecting situations for the staff and the customer. Most start-up
specialty coffee brands do not prioritize the development of operational policies and
standards manuals, which in turn leads to bad experiences that could have been
prevented.

UNDERSTAFFING OR OVERSTAFFING

Steaming from ineffective operations planning and team management is the problem of
understaffing or overstaffing. Each in its own way affects the customer experience
through quality of menu and service and can have a disastrous effect on the brand. It
also leads to high staff turnover, which ends up negatively affecting the quality
standards as well as is a heavy cost burden long-term.

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RISK MANAGEMENT SOLUTIONS

THE TEAM

Strategically coordinated and timely recruitment, proper training, and skilled

management of a dynamic team:

According to the latest findings, the following characteristics of a start-up team heavily
affect the survival and growth of a business model within the context of the modern-day
industry environment: commitment, ownership, communication, expertise/mastery within
focus area, expertise in business/administration, network/insider contacts, stress
coping, coherency. These factors must be considered and probed during the interview
process. The overall team cumulatively and, if possible, individually must score high on
as many of these as possible.

At the same time, common characteristics that have a negative impact on start-up team
dynamic should be taken into consideration during the interview process and, where
possible, avoided or reduced in the overall team score count: third-party needs,
vulnerability, and illusion of control. The last one refers to the mind-set of narrow
expectations, which in turns results in poor adaptability and trouble-shooting skills. The
team needs to be able to overcome unexpected barriers with creative troubleshooting
and, in case of failures, fail fast and effectively to mould the operations to the needs of
the market without compromising set values or losing motivation.

To engage individuals that have the required skill set, it is essential to put together an
attractive compensation package that will attract and retain highly skilled team member,
who are up to the task of building a specialty coffee brand and experience. The team
must be allowed adequate time to train and develop meaningful operational practices.
Though it may seem costly, this investment will be the most cost-effective solution long
term.

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THE VISION

Consistent adherence to values and brand vision set as priority over compromising
growth:

In the uncertain start-up phase, clearly defined values and vision are the best tool,
which will navigate the decision-making in the right direction and allow for
flexibility/adaptability in a new business environment. This gives the team an anchoring
point with which choices and decisions can be assessed and, hence, avoiding
incoherent operations and internal team conflicts in the early stages of business
establishment.

THE STANDARDS

Effective implementation of defined and coherent policies and standards:

A delicate balance must be reached between flexibility to adapt in early stages and
establishment of a firm foundation for future growth of the brand. To achieve that
balance, policies and standards must rely of meaningful operational goals for the team
as a whole and each member of the team individually. As the above-mentioned
solutions to the most common risks are implemented, the competent and motivated
staff, driven by defined common values, will be able to build a strong operational
structure and policy manual, guided by meaning rather than instructions and micro-
management.

8
FIVE YEAR GOALS

Below are the overall business goals set for Arumi Coffee in the first five years of
operations:

FIRST QUARTER OF 2022

1. Arumi Coffee can open sales through roasted coffee production in associated
businesses and other business places (hotels, lounges, and coffee shops), making
Arumi the best choice for the coffee value chain.
2. This achievement can be assisted by digital marketing sales that can drive
consumers to access purchases through web-based e-commerce. In addition, with
e-commerce, unlimited access to deals can be boosted to the local and the global
markets.
3. Likewise, outlets that are the centre of coffee value chain turnover will physically
strengthen branding locally.
4. Strengthening coffee knowledge in local and global coffee communities with a coffee
academy based on the curriculum from the Coffee Diploma in the Specialty Coffee
Association's Coffee Skills Program (6 Modules, 3 levels each) and the Coffee
Sustainability Program.
5. Growing sales at Arumi Coffee (outlet) per day AED 15,000 for only coffee drinks.

YEAR ONE AND TWO (2022 – 2023)

1. Arumi Coffee can strengthen local branding by opening additional strategic outlets
located in the middle of the business district in Dubai and Abu Dhabi.
2. Arumi Coffee helps fulfil caffeine needs for consumers in busy areas by using bar
stalls (pop-up bars) at several super active spots in Dubai.
3. Associate with the Specialty Coffee Association and the Coffee Quality Institute to
make Arumi Coffee a Certified Coffee Campus (SCA Premier Campus) in the United
Arab Emirates.

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4. Making Arumi Coffee Academy a hub for roasters, baristas and coffee professionals
seeking professional coffee certification, which was initiated by themselves.
5. Obtain a license as a Coffee Institute from the local accreditation body (Ministry of
Higher Education) for the Diploma for Coffee Professional program.
6. Providing a postgraduate degree (hybrid e-learning) for CAS (Certificate for
Advanced Studies) in Coffee Excellence in collaboration with Zurich University for
Applied Science Switzerland.
7. Opening local and regional competitions in introducing Arumi Coffee as a local brand
that has world-class values.

YEAR THREE AND FOUR (2023 - 2024)

1. Making Arumi a massive production company that meets the needs of the local and
global coffee market by using a high-end roasting machine (Loring 35kg) to help
ensure consistency in large productions.
2. Targeting the production of one ton per month for supply coffee.
3. Making Arumi a green coffee sourcing hub for the Middle East and the global coffee
market.
4. Making Arumi Coffee a global hub for research and project development through
sustainability programs.
5. Opening Arumi Coffee at GCC through a partnership concept to Coffeepreuners with
core values owned by Arumi Coffee.

YEAR FOUR AND FIVE (2024 -2025)

1. Maintaining sales from the previous years, increasing the partnership and
collaboration with regional and global coffee businesses.
2. Offering Arumi Coffee partnership to Asian and European markets with Dubai
branding as Arumi Coffee HQ.
3. Making Arumi Coffee a sustainable consulting project for the coffee business at
GCC and globally

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BUDGETING

The proposed budgeting includes Head office, coffee roastery, training centre and bar
equipment/accessories, which are integrated into one production and service building.

No Item Description Number Unit Price Total

Roasting Area

1 Roasting Machine Genio 15kg Pro Upgrade (Details attached) 1 $ 72,800.00 $ 72,800.00

2 Shipment South Africa - UAE 1 $ 3,500.00 $ 3,500.00

3 Sealer Machine Shenlin 1 $ 1,100.00 $ 1,100.00

Training Area

1 Coffee Machine Linea PB La Marzocco 1 $ 14,154.00 $ 14,154.00

2 Water Filter BWT 2 $ 272.00 $ 544.00

3 Grinder EK43 Mahlkonig 1 $ 2,450.00 $ 2,450.00

4 Brewing Gadets V60/Chemex Accessories (Dripper, Filter, Server) 1 $ 550.00 $ 550.00

5 Refractometre VST 1 $ 1,580.00 $ 1,580.00

6 Scale Acaia Pearl 1 $ 225.00 $ 225.00

7 Cupping Bowls Rhino 12 $ 30.00 $ 360.00

8 Cupping Spoon Rhino 6 $ 39.00 $ 234.00

9 Tamper Cafelat 2 $ 103.00 $ 206.00

10 Knock Box Cafelat 1 $ 101.00 $ 101.00

11 Thermometre Brewista 1 $ 30.00 $ 30.00

12 TDS and PH Analyser Hidrotek 2 $ 95.00 $ 190.00

13 Cleaning Tools Urnex 1 $ 30.00 $ 30.00

14 Whiteboard 1 $ 82.00 $ 82.00

15 Milk Pithcer Rhino 2 $ 40.00 $ 80.00

16 Automatic Brewer Brewista 2 $ 165.00 $ 330.00

17 Moisture Metre Agratonix MT-Pro 1 $ 545.00 $ 545.00

18 Sizing Screen 1 $ - $ -

19 Density Metre Amast 1 $ 245.00 $ 245.00

20 Sample Roaster Ikawa 1 $ 2,170.00 $ 2,170.00

21 Roast Colour Analyser Roastrite 1 $ 1,495.00 $ 1,495.00

22 Projector 1 $ 200.00 $ 200.00

23 Lexicon Flavour Wheel 1 $ - $ -

 Bar Area

1 Espresso Cups Lino notNeutral 12 $ 47.00 $ 564.00

2 Cappuccino Cups Lino notNeutral 18 $ 35.00 $ 630.00

3 Latte Cups Lino notNeutral 12 $ 35.00 $ 420.00

4 Cortado Cups Lino notNeutral 18 $ 18.00 $ 324.00

5 Coffee Machine Linea PB La Marzocco 1 $ 14,154.00 $ 14,154.00

6 Water Filter BWT 2 $ 272.00 $ 544.00

7 Grinder EK43 Mahlkonig 2 $ 2,450.00 $ 4,900.00

8 Brewing Gadets V60/Chemex Accessories (Dripper, Filter, Server) 3 $ 550.00 $ 1,650.00

9 Scale Acaia Pearl 2 $ 225.00 $ 450.00

TOTAL $126,837.00

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THE TEAM

As for facilitating the course of communication in the success of this business operation
journey, it is necessary to explain related to the divisional staffing structure in Arumi
Coffee, as below:

Board of Directors

Executive
Head of Finance
Head of Coffee

e-Commerce
Coffee Roaster Head Barista
Manager

EXECUTIVE HEAD OF COFFEE

It is important to note here that: The Executive Head of Coffee during the early stages of
production of Arumi Coffee had full responsibility for the core of the coffee value chain
from procurement to production and sales.

Executive Head of Coffee will be responsible for managing Arumi Coffee's overall
operations. This may include delegating and directing agendas, driving profitability,
managing company organisational structure, strategy, and communicating with the
Board of Directors.
In addition, it also has responsibilities as follows:

- Overseeing the day-to-day operations of the coffee HQ production and coffee shops
- Solving challenges faced by customers and employees
- Overseeing cleanliness and maintenance of the shop
- Hiring and training employees
- Adjusting menu to maintain customer flow

HEAD OF FINANCE

This position is needed to assist the operations in bookkeeping and record all Arumi
Coffee data from employment to sales and profit and coordinate with the Executive
Head of Coffee, the production department, and the head barista.

Some of his responsibilities include the following:

- Handling everything relating to cash flow, financial planning, legal and taxation
issues.
- Providing administrative support to the day-to-day management of OT's financial
accounting and payroll processes.
- Administration of all income and receipts processes ensuring completeness of
income against invoices issued and grant payments due.
- Bookkeeping, maintaining records, and running deposits.

COFFEE ROASTER

Coffee Roasters has an essential role in the production and sale of essentially B2B
within Arumi Coffee. The coffee roaster, which is also the Production Manager, requires
having skills and chemistry in production and communicating with businesses that take
production from Arumi, both from hotel lounges and coffee shops in the United Arab
Emirates. In other cases, communication requires the coffee roaster to intensively
coordinate with the Barista for sensory skills evaluation and with the HR Finance
Manager for procurement and daily monthly reporting of B2B sales.

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Some of the basic skills that Coffee Roaster (Production Manager) possess are as
follows:

- Receiving green coffee deliveries, staging Green Coffee for daily roasts
- Weighing green coffee in preparation for roasting
- Contribute to Quality Control - through cupping and other brew methods
- Blending roasted coffee in preparation for packing
- Packing roasted coffee
- Record keeping and data entry
- General roastery cleaning and maintenance of roasting equipment
- Participate in a cupping of production roasts and new offerings
- Work closely with Coffee Program Manager on developing new offerings and roast
profiles
- Following Strict Sanitation Practices, Maintaining and Cleaning all necessary
roasting equipment
- Learning and maintaining roast profiles for a variety of brewing platforms

HEAD BARISTA

Baristas are the leading players in producing coffee in the coffee value chain's
downstream area and have an essential role in the sales growth of B2C of Arumi
Coffee. Barista has a position under the Sales Manager, who is also the head barista, in
one team. In this case, the Head Barista collects reporting data from daily, and monthly
sales also communicate with HR Finance for procurement and Head of Coffee for all
approvals.

Some of the basic skills possessed by Head Baristas and Baristas include:

- Specialty coffee brewing skills

- Cashiering duties
- Maintaining inventory, ordering, and receiving products
- To perform ad hoc runner/barback/host duties when required
- Daily operations

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- Proper maintenance and care for all coffee equipment – includes thorough daily
cleaning, after peak hours, as well as maintaining a clean work area through the day
- Recommended food items like main courses, sandwiches, bread to go along with
the coffee or tea
- Good understanding of the various types of coffee range
- Ordering and managing inventory
- Beverage creation/preparation
- Organising internal and external events
- Supervisory and people skills

E-COMMERCE MANAGER

e-Commerce has an essential role in online sales, both for individuals and wholesalers.
Its function is needed to be able to strengthen downstream coffee sales through web-
based services. Collaborate with other staff in promoting coffee both online and offline.

Some of the roles that are the primary responsibilities include:

- Driving the sales performance of the e-commerce platform

- Managing and executing promotional campaigns
- Providing insights on customer shopping trends to support assortment selection and
identify assortment gaps
- Ensuring good customer service by addressing and ensuring the timely resolution of
customer issues or comments
- Working closely with demand planning and warehousing teams to ensure smooth
order fulfilment.
- Providing analysis and reporting on metrics such as weekly/monthly sales by
department, new coffee products (coffee consumption and accessories) sell-through
and offer code performance

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REFERENCES

Bellwether Coffee. (2021, February 12). Why Coffee Shops Should Start Roasting Coffee In-
House. Bellwether Coffee. https://www.bellwethercoffee.com/why-coffee-shops-should-
start-roasting-coffee-in-house/

Comunicaffe. (2019, October 31). Coffee Industry in the Middle East to reach a value of $44
billion by 2021. Comunicaffe. https://www.comunicaffe.com/coffee-industry-in-the-middle-
east-to-reach-a-value-of-44-billion-by-2021/

Dubai Media Office. (2021, June 23). Value of UAE Retail e-Commerce Market Hit Record $3.9
Billion in 2020: analysis. Media Office. https://www.mediaoffice.ae/en/news/2021/June/23-
06/Dubai-Chamber

Maspul, K. A. (2021a) The Role of Instagram in Specialty Coffee Marketing during the
Pandemic in the United Arab Emirates. Academia Letters. https://doi.org/10.20935/AL3602

Maspul, K. A. (2021b). Specialty Coffee Trends Post-Lockdown in the United Arab Emirates.
Academia Letters. https://doi.org/10.20935/AL3185

Maspul, K. A. (2021c). Correlation between Cropster and Sustainability of Coffee Roasteries in

The United Arab Emirates 2021. Journal of Economics and Development, 1(1), 14-30.

Mordor Intelligence. (2021). Middle East & Africa Coffee Market - Growth, Trends, COVID-19
Impact, and Forecasts (2021 - 2026). Mordor Intelligence.
https://www.mordorintelligence.com/industry-reports/middle-east-africa-coffee-market

6Wresearch. (2021). UAE Coffee Market (2020-2026). 6Wresearch.

https://www.6wresearch.com/industry-report/uae-coffee-market-2020-2026

Specialty Coffee Association. (2021, November 4). World of Coffee, SCA'S Premier Coffee
Trade Show, Expands to the Middle East in 2022. Specialty Coffee Association.
https://sca.coffee/sca-news/world-of-coffee-expands-to-the-middle-east-in-2022

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