• Structure of the retail market



    Retail sales of coffee (both roasted and instant) in the main importing countries are channelled through a combination of retail shops owned by the roasters themselves, their own direct sales force supplying supermarkets and hypermarkets, and wholesalers and food brokers. Supermarkets today play a much larger role in the retailing of coffee than they ever did before and supermarket own brands now account for a sizeable proportion of retail coffee sales. Roasted coffee is sold in ground form or as whole bean and is packaged in various types and sizes of cans and packets. Soluble coffee is generally sold in jars, although sachets are becoming increasingly popular especially in emerging markets and in particular for the ‘3 in 1’ products where instant coffee is pre-mixed with sugar and a creamer. Single-serve instant portions are also gaining ground in established markets, as are coffee pads or pods and capsules for use in domestic filter coffee and espresso machines. What these have in common is convenience of preparation, consistency of quality, and easy mess-free disposal of spent coffee grounds. More recently there has been a significant shift towards single serve filter coffee brewing methods in the USA and Europe with the development of new single serve filter machines as well as the single serve pour over filter system, known generally as the “chemex” system.  There is also a strongly growing, although still small, market for ready-to-drink (RTD) liquid coffee beverages sold in cans or bottles.  

    Roasters have two distinct market segments: 

    • The retail (grocery) market, where coffee is purchased largely but not exclusively for consumption in the home;  
    • The institutional (catering) market, where coffee is destined for the out-of-home market e.g. restaurants, coffee shops and bars, hospitals, offices, and vending machines. 

    The percentage share of each segment varies from country to country, but in most retail sales for in-home consumption generally account for 70%–80% of the overall market. There are exceptions, especially in countries where there is a well established catering trade and eating out is part of the country’s traditions i.e. Italy, Spain and Greece.  

    Each segment accepts a wide range of products, the quality and taste of which depend largely upon the coffee growths that make up the blends, the degree of roast, the type of grind, and so on. Most small roasters tend to specialize in one segment, while larger and in particular multinational roasters usually service both. The major part of the retail market is, however, controlled by a handful of huge multinational roasters and the degree of concentration is increasing. Although this trend was temporarily halted by the growth in the specialty trade, it is once again accelerating with the rapid acquisition of small specialty roasters by the multinationals.

    Updated 11/2010 

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