The specialty coffee group has partnered with UAE-based Al-Handal International Group and expects to open its first store in Baghdad by the end of 2025
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Al-Handal International Group Vice Chairman Hardan Al Handal (left) and % Arabica Founder Kenneth Shoji (right) | Photo credit: Al-Handal International Group
Specialty coffee group % Arabica has signed a master franchise agreement with Dubai-based holding company Al-Handal International Group to launch in Iraq.
The deal, signed by % Arabica Founder Kenneth Shoji and Al-Handal International Group Vice Chairman Hardan Al Handal on 23 January 2025, will see a first store open in Baghdad before the end of 2025 before planned expansion to other Iraqi cities from 2026.
% Arabica opened its first store in Kyoto, Japan, in September 2014 and now operates more than 200 stores across 29 markets globally.
Iraq will add to the specialty coffee group’s growing Middle East and North Africa (MENA) presence, which currently comprises 48 outlets across nine countries. Kuwait and the UAE are the brand’s largest markets in the region by outlets, with 18 and 16 stores respectively.
Iraq has a small but growing specialty coffee market, led by domestic operators Cabra Coffee Roasters, Jubran Coffee, Origin Cafe and Sidra Coffee.
Increasingly viewed as an untapped coffee shop market compared to neighbouring Kuwait and Saudi Arabia, Iraq has also attracted a growing number of international operators over the last few years, including Italy’s Segafredo Caffè and Cafè Barbera, Greece’s Mikel Coffee, Turkey’s Espressolab and Saudi Arabia’s Kyan Café.
World Coffee Portal’s Project Café Middle East 2025 report shows that Iraq is the 13th largest branded coffee shop in the MENA region with 85 outlets. The market is forecast to grow 10% over the next five years to surpass 130 outlets by the end of 2029.