The Israeli woman who took on Starbucks - and won

By ISRAEL21c staff June 13, 2004

Every business has a moment where it faces a major existential challenge: for Sara Shemer, owner of the upscale Arcaffe chain of Israeli espresso bars, that moment came in late 2001, when the international coffee giant Starbucks began opening its first outlets in Israel.

The competition to Shemer's business couldn't have been more direct - a global, world-famous chain opening its flagship branches precisely on the same blocks in central Israel as her carefully-chosen outlets of Arcaffe espresso bars.

Fast forward a couple years, and the winner in the caffeine battle: Arcaffe - in a knockout punch. Starbucks opened their first Israeli coffee shop, together with local corporate partners with plans to reach 20 outlets nationwide by the end of 2002. In the end, they wound up opening only six outlets. By April 2003, Starbucks had admitted defeat and closed up shop.

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