Coffee consumers are helping the industry by seeking premium coffee
London, UK (PRWEB) September 20, 2012
Coffee is one of the most popular beverages in the world. It is also one of the world's most traded commodities, providing employment for about 100 million people globally. According to IBISWorld industry analyst Steven Connell, “Britons consume approximately 2.8 kilograms of coffee per capita per year, significantly lower than their European counterparts, yet account for the largest instant coffee market in Europe”. The Coffee Processing industry has benefited from the historical resilience of hot beverages during difficult economic times, providing an inexpensive indulgence in lieu of traditional luxuries.
The increasing sophistication of the consumer palate has also resulted in higher sales of ground and exotic coffees, in line with the trend towards in-home cafe-style coffees. This has been further aided by the increased availability in appliances such as espresso machines, which have also become cheaper over the past five years. The increased importance of ethics and sustainability in making consumption choices has further boded well for the industry, as producers have embraced the movement, evidenced by new product introductions and marketing messages. In the five years through 2012-13, industry revenue is estimated to increase 2.8% per annum to total £1.93 billion. Revenue in the current year is expected to increase 2.7%.
The future prospects of the industry represent a healthy blend of opportunities and profitability. Connell adds, “consumers are expected to continue to gravitate towards high-margin, single-origin ground coffees”. The fair trade and organic movement will continue unabated, driven by increased awareness and producer-driven initiatives such as the Rainforest Alliance. Production and prices will continue to be at the mercy of the climatic and political vagaries, as demand is forecast to stay buoyant over the next five years. The health and well-being movement has been bittersweet for the industry due to negative preconceptions of coffee as an unhealthy beverage. This is expected to result in increased competition from commonly accepted healthier substitutes such as tea or fruit juice. In the five years through 2017-18, industry revenue is expected to continue to increase.
The Coffee Processing industry is estimated to have a medium level of market share concentration, with the top two players accounting for 61.5% of the market. Although the United Kingdom is not traditionally a coffee-consuming nation, it remains a staple morning beverage for many consumers and a regular part of the weekly grocery basket. The major players fiercely compete for market share through aggressive promotions, new product introductions and various cross-promotional activities. This is particularly evident in the lucrative instant coffee market, which accounts for the majority of industry revenue. Major companies include Nestle UK and Kraft Foods Company.
For more information on the Coffee Processing industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
This industry includes the production and processing of coffee and coffee substitutes, decaffeinating and roasting of coffee. The primary products produced include ground coffee, soluble coffee and extracts and concentrates of coffee.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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