Inside South Africa’s coffee race

The coffee market should be saturated — there are shops on almost every corner in some neighbourhoods — but long-standing operators and plucky upstarts keep expanding, competing for a place in the daily routine of consumers.

Operators see no sign of saturation.

Part of the case is economic. Coffee has long been one of the products where the “lipstick effect” applies: it’s a small, affordable luxury that consumers protect even when cutting back elsewhere. People may skip restaurant dinners and holidays, but they still buy their morning flat white.

In South Africa, spend per coffee customer is up 16% since 2023, according to Cape Town-based research company Slant, from R99 a week to R116. More customers are now buying coffee twice weekly, at a more diverse range of outlets. And they increasingly favour local alternatives over established chains like Starbucks and Seattle.

South Africa is unusual in that home-grown retail brands still shape the coffee landscape. Vida e Caffè and Seattle Coffee Company are the biggest national chains, in operation for about 25 years. Bootlegger, Plato, Motherland and a string of newer independents are all chasing a similar customer. WCafé, part of Woolworths, is a big player. So is Mugg & Bean, a division of listed Famous Brands.

New business models have emerged beyond the traditional outlets, with coffee brands going into partnerships with airlines and major events. And they’re heading into smaller areas and new regions.

At Xpresso Café, everything on the menu costs R14, including coffee. Newcomer Plato’s customer share has increased sharply since 2023, with its rapid national expansion and ambitious growth plans. Plato now attracts more customers than Bootlegger and up to half as many as Seattle.

Slant says the two chains are worth keeping an eye on, for different reasons: Xpresso serves a huge number of customers with very few stores. Plato doubled its customer base from 2023 to 2025 and, if expansion plans hold, “could change South Africa’s coffee landscape”.

South Africa is a large, unevenly served country. The coffee culture that is concentrated in Cape Town and Joburg barely exists in other cities and towns. As the emerging middle class grows outside the major metros, the market grows with it.

And then there is the sociology of it. Coffee shops are community anchors, meeting places, de facto offices for the remote work generation. Customers arrive with laptops, stay for hours and come back the next day. That social dimension sustains demand in ways that a pure product category cannot.

The market is not saturating but segmenting and “premiumising” — which is why new entrants can coexist with established chains.

With nearly 400 stores across eight African countries and ambitions to hit 500, Vida e Caffè is South Africa’s largest coffee chain and shows no sign of slowing down.

Vida CEO Darren Levy still sees enormous potential. “Saturation normally implies physical spaces,” he says. “And we believe there is huge demand for coffee in spaces where there isn’t yet speciality coffee.” New residential nodes, expanding secondary cities, forecourt locations, offices, airports, universities and even Builders and Exclusive Books have all become part of the Vida footprint “as we continuously innovate store design and functionality”.

Vida e Caffè means “life and coffee” in Portuguese. Founded in 2001 in Cape Town, Vida turns 25 this year. It serves more than 2-million shots of coffee a month and plans to open more than 50 new stores in this financial year. Two additional countries are expected to come on board, which will push the brand’s foreign store count past 50.

Owned by private equity firm Athena Capital, Vida operates a hybrid model. Two-thirds of stores are franchised, the rest are company-owned. The house espresso blend has remained unchanged for 25 years.

Levy insists coffee alone isn’t what keeps customers returning. “What we call our Vida vibe — the energy, the friendliness, the music, the staff — is something absolutely unique to us.” The Portuguese-inflected warmth of “obrigado” is a recognisable cultural signature.

Food, prepared fresh in-store daily, accounts for less than half of revenue, but Levy describes it as “extremely significant and strategic” — in many office park locations, the food offering functions as a staff canteen.

One of Vida’s strategies has been placing its brand in unexpected locations. The chain was among the first to bring speciality coffee to South African fuel forecourts, signing with Shell in 2015. It runs drive-throughs, including outlets in Zambia and Angola. A partnership signed late last year with the Spar Group opens yet another retail environment, and deals with Discovery Vitality and Vodacom have broadened the Vida reach even further.

Bootlegger began as a single outlet in Sea Point in 2013. Now it has 107 locations nationally, sells 5-million cups a year, roasts 400t of coffee and employs 3,500 people directly and indirectly.

The origin story of Bootlegger is that three cyclists couldn’t find a decent flat white along Sea Point’s main road in the early morning, so they opened one. What followed was an interesting question as to what to call the brand: who are they? Their answer was vivid and specific — a young man in a 1920s frame. Part James Dean, part Robin Hood — someone who looked after his community, never chased a trend, never caused trouble unless trouble came looking. A bootlegger.

From that character came a timeless design language, an attitude of cool restraint. “We don’t follow trends,” says CEO Ricky Ruthenberg. “If anything, we believe we’re trendsetters.”

Bootlegger has remained privately owned since day one, in an industry where private equity comes knocking regularly. It is not so much a coffee shop but an all-day café, with full sit-down service and a menu running from breakfast through to dinner at some locations. In a market full of 50m² espresso boxes competing on coffee alone, this is a different proposition. “Coffee brings the margin, food brings the revenue,” says Ruthenberg.

Bootlegger also owns its supply chain from origin to cup. Green beans are imported directly from Guatemala, Tanzania, Costa Rica, Colombia and Brazil — all Rainforest Alliance certified — and arrive at Bootlegger’s 4,500m² Cape Town production facility. A centralised bakery of nearly 2,000m² produces more than 4,000 croissants daily, distributed nationally after being blast-frozen. By controlling the value chain, Ruthenberg says, Bootlegger protects its margins while maintaining consistency.

Beyond retail, Bootlegger operates significant wholesale servicing of hotels, corporate offices and hospitality groups. Franchising is about 55% of the business. Joburg has about 40 locations, with more to come. There are two outlets in Namibia, and more expansion is planned into the rest of Africa. Thirteen years in, it is projecting about 30 new locations in the 2026 financial year.

Seattle Coffee Company is an artisanal brand at scale. With 331 stores, turnover of R1bn and 2,000 employees, Seattle is opening 40 new stores a year. Ask MD Jared Jabour if the market is saturated and he doesn’t hesitate: “Not at all. There’s still a massive opportunity.”

Seattle directly manages operations in the Western Cape, Namibia and inland regions (Gauteng, the Free State and Limpopo). In other areas — the Garden Route, KwaZulu-Natal, the Eastern Cape, Mpumalanga and Zimbabwe — regional partners pay a royalty, while Seattle acts as a supply chain, designs their stores and provides training and operational support. “If you’ve got skin in the game, you’ll run the space as an owner,” says Jabour.

Each region operates its own central kitchen. Coffee gross profit is 55%-60%. Beans are hand-roasted at its roastery in Muizenberg and distributed exclusively to Seattle Coffee Company stores. It also owns the artisanal ice cream brand Creamery, with four stores in the Western Cape and plans to expand.

Food, more costly with greater wastage, accounts for about 20% of revenue — a growing focus after two years of investment in new packaging, improved displays and a dedicated food department.

Seattle’s average spend per head is R60-R80. But Jabour is noticing a shift: lower-middle-income consumers are beginning to reach for Seattle. “They want a national brand in their hand. A Starbucks, a Seattle — that’s what the emerging market now wants.”

The real competition, he says, is not another chain. “It’s the independent on the corner — the single-site operator with the best possible artisanal approach and hands-on service. That’s what we want to achieve, but we do it on a national scale.”

Seattle is also expanding its events division and has just wrapped up a successful tournament sponsorship with LIV Golf at Steyn City.

Plato is the upstart brand, the one that seemingly came from nowhere and is rolling out at a furious pace. Founded in 2018 by brothers Stephan and Petrus Bredell in a container kiosk in Irene, Tshwane, Plato now has 33 stores and serves a million espresso shots a month. With 50 more stores planned before year-end, Stephan says it already has more outlets than Starbucks in South Africa and will soon open in London.

The brothers have no formal background in coffee. Stephan, working in marketing at an insurance company, recognised the attractive margins coffee could generate. “We didn’t know anything about coffee, really. Hence the slogan: Just Coffee, Sculpted. We figured it out as we went.”

What they did have was sharp instincts — a marketer’s eye for design and a systems thinker’s grip on operations. And they made deliberate choices that cut against the grain of the industry.

Walk into a Plato and the first thing you notice is what isn’t there. No exposed brick, no soft-glow Edison light bulbs, no salvaged timber. Spaces are luminously white, architecturally spare and almost shockingly clean. Stephan describes the aesthetic as South Korean- and Japanese-inspired — an Apple Store sensibility where customers feel aspiration, clarity and calm. “A lot of people said it’s too cold, too clinical. It was a gamble. But I think it’s refreshing.”

The bet has paid off. White walls need upkeep and customers notice. For a food and beverages brand, the subliminal message — “This place is clean” — turns out to be powerful.

Plato also went where others hadn’t, targeting small towns and secondary cities ignored by the established speciality brands. In places like Kimberley and Rustenburg, where speciality coffee was essentially unknown, customers who once loaded their drinks with syrups have discovered they no longer need to. The Plato house blend — built on Central African and Central American origins for a naturally sweet, easy-drinking cup — has gently educated its market.

The business model is tightly integrated. Plato runs its own roastery, Plato Supplies, which provides beans and central kitchen operations for the entire franchise network. Every kilo of beans sold to a franchisee generates margin at the supply level before the royalty on revenue is even calculated. Stephan puts flat whites at about 70% gross profit; a well-run Plato store with pastries in the mix will target 55%-60%. Numbers, he notes, that most retail categories would regard as extraordinary.

Plato franchisees are capped at three stores; with more, the owner loses the operational intimacy that makes the model work. A newer joint venture structure allows franchisees to hold 49% alongside the group’s 51%, sharing capital contributions and dividends.

Community is part of Plato’s strategy, as it is for most of the chains. Each franchisee must be embedded in the neighbourhood the store serves. “People support people,” says Stephan. “We want to create a big brand feel, but with an independent feel. It must still feel local.”

Plato barely used conventional advertising in the early days. The approach included resharing every tagged Instagram story, turning customers into content creators. Today the brand has the second-largest coffee Instagram following in South Africa.

Between December and June last year, Plato received over a thousand franchise applications — without advertising — for only 60 available sites.

The first UK store opened in April at Bishopsgate, near Liverpool Street Station and in the same building as Gordon Ramsay’s latest restaurant. The commercial logic is that while South Africa has 60-million people, of whom perhaps a tenth can readily afford a R40 cappuccino, greater London alone has over 200 Starbucks outlets. After London, the Netherlands has generated the second-highest number of international franchise enquiries. Florida and Tennessee in the US are also in the conversation.

Stephan can’t fully explain how Plato grew the way it did. He suspects it’s a combination of product, design, community selection and something harder to pin down — a chain that still feels like it belongs to the neighbourhood it’s in.

Xpresso Café opened its first venue in Durbanville, Cape Town, in October 2016. Lines of 100 people formed daily in the first week. Within a year, it owned five stores. Xpresso now operates 80 stores across South Africa (36 in Durban alone), selling over 3-million items a month — roughly half of those coffees.

Founders Nicolene and Clyde Elhadad were sitting at CapeGate Shopping Centre when Nicolene noticed families walking past a coffee shop without stopping. “Isn’t that sad?” she thought. Coffee shouldn’t be a luxury, she felt — but in South Africa, it was priced like one.

Both had grown up in low-income homes. They’d met on cruise ships and spent years travelling through the Americas, Australia and Europe, watching people think nothing of driving for a flat white. That culture hadn’t fully reached South Africa yet — but they believed it could, if the price was right.

They knew nothing about coffee, food or retail. Their backgrounds were in distribution, accounting and logistics. Friends questioned the move. Nicolene’s response: someone else has already done this, “and if they can, we can. We just need to figure out how.”

Figuring out how took two years. Nicolene visited over 40 Cape Town coffee shops, studying costs. When she stripped away the sit-down overheads and calculated what a quality takeaway coffee cost to make, the number surprised her. It didn’t have to be expensive.

The franchise model that followed was selective by design. They turned away more applicants than they accepted, looking for people who would run stores themselves and for whom ownership would be life-changing. “When you buy a franchise with us,” she tells prospective partners, “you’re changing six families’ lives.”

To maintain quality at that scale, the company moved to vertical integration. Its own roastery, Jackass, sources beans directly from farmers in Brazil and along the equatorial belt. Clyde travelled to Brazil to meet them. A recently opened in-house factory in Brackenfell now produces five product lines daily.

Pricing has always been Xpresso’s defining feature. When VAT rose from 14% to 15% in 2018, Xpresso absorbed the difference. When it started, every item on the menu, from espresso to pies to pastries, cost R10 — now it’s R14. Xpresso bet on volumes. The iced coffee, for example, is sold near cost — kept on the menu because it brings people in.

One rule has always overridden the others: family comes first. For years, that meant not expanding to Joburg — it would have kept Nicolene and Clyde away from their children too often. Now, with the kids older, they’re opening 20 stores in Joburg and Pretoria this year.

International expansion is under discussion. A 10th anniversary rebrand is coming at year-end, led by Nicolene. The shops will look different. The price will stay the same for as long as possible.

Greg Aubin, research analyst at data analytics firm Euromonitor International, tracks two restaurant categories relevant to coffee: specialist coffee and tea shops — which include brands like Vida and Seattle — and cafés, under which Mugg & Bean, for instance, falls. Both categories recorded strong growth in terms of value in 2025, 6.4% and 9% respectively on the previous year.

The categories overlap, though cafés typically offer broader menus and larger, sit-down-friendly spaces. Daytime dining has expanded as consumers gravitate towards affordable, flexible eating-out occasions such as breakfast and brunch. Demand is also lifted by hybrid and remote working patterns, and consumers use cafés for coffee breaks, light meals and a work-friendly environment with wi-fi and comfortable seating.

Cold coffee is a strong new trend. It travels well on social media, lends itself to flavour experimentation and seasonal variations, and resonates with younger consumers. Ready-to-drink formats are also gaining momentum.

Says Aubin: “Offerings from brands such as Vida and Mugg & Bean, such as coffee-flavoured milks and iced lattes, remain strong performers in retail, supported by promotions and greater shelf visibility at retailers like Checkers.”

Channel expansion is another area of competition. Bootlegger has secured an exclusive partnership with FlySafair; Vida has one with local airline Lift. On the convenience side, Woolworths’s Now Now concept deploys compact, fast-casual outlets in high-traffic urban areas, while Mugg & Bean’s On-The-Move format has passed 100 locations, including fuel station forecourts.

Digital engagement has become critical. Apps now sit at the centre of consumer relationships, offering personalised recommendations, rapid reordering, loyalty rewards and exclusive promotions.

“In South Africa, 58% of Gen Z consumers order food and beverages online, and 49% say easier checkout via digital wallets improves the experience,” says Aubin.

Subscription models have started to gain traction too. In its latest integrated report, Mugg & Bean notes that there is sustained interest in and uptake of its subscription service, launched in February 2023.

The broader pressure on brands is real. “Coffee brands are needing to work harder to justify out-of-home spend through convenience, speed, quality, differentiation or flavour profiles that are difficult to replicate at home,” says Aubin. This comes as consumers invest more in home equipment, from pod machines to entry-level grinders.

The coffee market is a notable outlier in an otherwise strained consumer environment. While most South Africans are tightening their belts and cutting discretionary spend, demand for coffee continues to grow — fuelled by new channels, expanding consumer segments and a culture that increasingly treats coffee as an affordable everyday ritual rather than a luxury. But growth alone doesn’t guarantee winners: it’s the established chains, the new operators with a distinct personality and the neighbourhood cafes with a strong identity and a quality product that are capturing loyalty and pulling ahead of the pack.