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EuropeanSpecialityCoffeeMarketOutlook

EUROPEAN SPECIALITY COFFEE CONSUMPTION TRENDS

Mick Wheeler

EuropeanSpecialityCoffeeConsumptionTrends

� It would be fair to say that when the specialty coffee movement started off in America, Europe was fairly dismissive of this new American trend, believing that it had always concentrated on quality.

� But the force proved too strong and this new phenomenon rapidly moved across the Atlantic.

� However the two markets have developed in slightly different ways.


Differences between the American and European Specialty

� Europe is more fragmented with a greater number of independent participants than is the case in America;

� The European specialty coffee sector encompasses a much wider range of regional brewing preferences than is evident in America;

� The American specialty movement has been more successful in raising the overall quality profile of coffee consumption in general than the European Speciality coffee movement has been.

EuropeanSpecialityCoffeeMarketOutlook

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Brazil Colombia Guatemala Honduras Indonesia Mexico Nicaragua Vietnam

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Origin of American Imports of Green Coffee

2010 2013 2015


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Origin of EU Imports

2010 2013 2015


But let’s take a closer look at what is happening in Europe:

Overall - The Future is Relatively Bright, But there are Clouds on the Horizon

� Various sources all show the same trend, coffee consumption in Europe is growing, but that growth is extremely slow;

� The speciality coffee sector, however, appears to be growing a little faster;

� Although, the data sources remain fragmented and are somewhat limited.


� To explore this in a little more depth, I will examine the following:

� Exports of Organic and Differentiated Coffee into Europe,

� Overall coffee consumption in Europe, and the

� Development of the Coffee Sectors in the UK and Germany, with a greater focus on the coffee shop sectors in these countries.

It is a bit of mish-mash of data, but helps to paint a picture of a sector of the industry, where some areas are growing vibrantly but others not so well,


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Reported Exports of Organic Coffee to Europe


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Reported Exports of Differentiated Coffee to Europe


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European Coffee Disappearance


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Kgs per head

European Union per capita Consumption


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2010 2011 2012 2013 2014 2015

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Retail Sales of Fresh Coffee - Western Europe


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2010 2011 2012 2013 2014 2015

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Sales of Coffee Pods -Western Europe


Fresh Coffee59%

Instant coffee23%

Out of home18%

European Coffee Consumption 2010

Fresh Coffee58%

Instant coffee22%

Out of home20%

European Coffee Consumption 2015


So let’s look at two markets in Europe, where reasonable (accessible) data exists:

THE UK &

GERMANY


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2009 2010 2011 2012 2013 2014

Per capita Consumption

Germany United Kingdom


UK Market 2015

� 20,723 Coffee shops (up by 1,699 additional outlets in 2015)� Turnover an estimated £7.9 billion (US$11.9 billion) – up 9.7% in 2015� Branded Coffee Shops 6,495 (up by 714 outlets in 2015)� Branded Coffee Shop turnover £2.6 billion (US$4.2 billion)� Main branded coffee shops players are:

� Costa Coffee 1,922 outlets – up by 171 outlets� Starbucks 849 outlets - up by 25 outlets� Café Nero 620 outlets – up by 30 outlets

� They control 53% of the branded coffee shop market – interestingly down from 54% 2 years ago.


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UK Coffee Shop Market Number of Outlets

Branded Chains Total Coffee Shops


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Retail Coffee Sales in the UK

Pods Fresh coffee


THE EUROPEAN MARKET:

So what’s happening in Germany

Errr………… Not much!!!!!

BUT


German Market 2015

� The number of coffee shops in Germany, which includes dedicated coffee shops, bakery stores, fast food outlets, petrol stations and other outlets in 2015 was just over 25,000 (up just 0.1%)

� Turnover an estimated €3.5 billion (US$3.9 billion) – up 2.2% in 2015� Branded Coffee Shops 1,882 (up by just 30 outlets or 1.6% in 2015)� Branded Coffee Shop turnover estimated at €974 million (US$1.1

billion)� Main branded coffee shops players are:

� McCafe 867 outlets – up by 7 outlets� Starbucks 163 outlets - up by 6 outlets� Segafredo 87 outlets – up by 4 outlets


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Retail Coffee Sales in Germany

Pods Fresh coffee

EuropeanSpecialityCoffeeConsumptionTrend

The Future for Consumption of Speciality Coffee in Europe

� European Consumption of Speciality coffee should continue to grow;

� Furthermore the shifts in that consumption, witnessed over the last 5 years looks, set to continue, i.e.:

� Out of home consumption will continue to grow;

� Consumption of pods will continue to expand; but

� Overall consumption of green coffee looks set to continue to stagnate.


Thank You

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