RFG joint venture sees big things brewing in Mid East

GOLD Coast food franchisor Retail Food Group plans on becoming a major force in the Middle East coffee industry after forging a joint venture with two United Arab Emirates business groups.

It will hold a 50 per cent stake in the new operation, designed to grow RFG’s franchise network, while the other half will be shared equally between the Al Hathboor and HKO groups.

RFG chief executive – international Mike Gilbert said the move will enable it to bring its other brands, including Donut King, Brumby’s Bakery and Michel’s Patisserie, to the region.

The company currently has 150 outlets in the region, the majority coming under the Gloria Jean’s Coffee brand, which will not form part of the arrangement.

Mr Gilbert said the UAE groups were selected because they have expertise in the local market as well as complementary food and beverage, bakery, franchising and distribution businesses.

“They see the sophisticated systems we have and they want to bring them to the Middle East, that is pretty attractive to them,” he said.

“They understand what resonates with customers already.”

Part of the joint venture plan involves establishing a franchise management team and coffee roasting and distribution facility in Dubai in the next six months to supply the region.

Coffee is currently shipped from Australia to its outlets in the Middle East.

He said people in the region are heavy coffee consumers who prefer to visit franchise chains rather than independent shops.

Mr Gilbert said it will use the roasting facility to develop Arab and Turkish coffee blends tailored to the market.

He said the facility will also supply hotels, restaurants, and other customers outside of its franchise network.

“We see it as an untapped opportunity.”

RFG’s latest announcement follows news earlier this week it had struck a deal to roll the Donut King brand into Sweden.

Shares in the group rose 22¢ or 4.93 per cent to close at $4.68.