Israel's coffee king takes on Starbucks with a much cheaper cuppa

Tel Aviv

NEAR Red Square in Moscow, Irina Kushnir waited for her order of coffee. As soon as she learned that a new coffeehouse was selling all items for 50 roubles (S$1.17), the 28-year-old graduate student decided to forgo the nearby Starbucks and join the queue outside the tiny, cable car-like stand. "I haven't seen any other coffee shops in Moscow offering cappuccinos at this price," she said, shuffling her way forward in the line of six people.

This is the first Russian branch of Cofix Group Ltd. It won't be the last. Founder Avi Katz, who started the chain in Israel in 2013 and is now the country's biggest coffee-stand operator, has big plans. In addition to Russia, he's planning to expand into the other two top branded-coffeehouse markets in Europe: the UK and Turkey. He's also about to open New York and Madrid offices for Hagshama Fund, his US$650 million real estate investment firm.