The constant of the Greeks and the developing capsule market

The wider coffee market in Greece exhibits stability in consumption, with the HoReCa (Hotel/Restaurant/Café) market having fully recovered after the pandemic and is on a good trajectory. Meanwhile, supermarkets, where a significant portion of coffee consumption had shifted when government restriction measures were in effect, are currently losing sales volume by a single-digit percentage as market information suggests. Coffee is indeed a favorite habit of the Greeks.

The coffee market was affected globally from 2021 onwards due to the frost that prevailed in Brazil, which is the largest producer of Arabica coffee worldwide. This event led to the devastation of a large portion of the crop, causing a deficit in availability for the two years that followed in relation to demand, something that has not yet returned to normal levels. The lack of quantities was a key factor that, along with other prevailing market conditions, affected the global stock market prices of coffee.

This year, robusta prices are being held at fairly high levels; following Arabica, it accounts for about 40% and holds a significant part of global coffee production. In November 2022, considering the price on the New York Stock Exchange and the dollar-euro exchange rate, we reached the highest cost in euros in recent decades. For now, we have not seen the global market correct, despite the fact that the new Brazilian crop has already begun to be available on the market.

Interestingly, looking at the Greek market, there has been a recent increase in capsule consumption in our country. This is a trend that emerged particularly during the pandemic, when the habit of making coffee at home was strengthened, and a portion of the consumption shifted from closed food service establishments to domestic consumption.

The Major Players in Greece

Delving further into the capsule market, one will discern Nestle's dominance in domestic consumption, apart from the Nespresso capsules available from the namesake stores – boutiques throughout Greece. The market share in volume for 2022 displays the full picture. Starbucks' Nespresso-type capsules had a market share of 32.1% in volume in 2022, topping the category.

They were followed by L’Or capsules by Jacobs Douwe Egberts with a sales volume market share last year that reached 28.5%. Lavazza followed with a share of 7.8%, Illy with 7.2%, Costa Coffee distributed by Coca-Cola with a share of 6%. Right after in terms of sales volume came Jacobs with 5.8%, Dimello with 4.9%, private label with 3.8% and Coffeeway capsules with a share of 1.7%.

The Landscape in the Global Capsule Market

In the global market, coffee capsules exhibited an average annual growth of 2.9% during the years 2015 through 2021. It is projected that they will continue to grow until the end of 2032. The global coffee capsule market is expected to rise from $12.33 billion in 2022 to $13.3 billion in 2023 with a Compound Annual Growth Rate (CAGR) of 7.9%.

The Russia-Ukraine war disrupted the chances of global economic recovery from the COVID-19 pandemic, at least in the short term. The war between these two countries led to economic sanctions in many countries, rising commodity prices, and disruptions in the supply chain, causing inflation in goods and services and affecting many markets worldwide. The global coffee capsule market is anticipated to increase to $17.9 billion by 2027 with an average annual growth rate of 7.7%.

Annual Coffee Consumption in Greece Hits 40,000

It is estimated that in Greece, according to the official data of the Hellenic Coffee Association, around 40,000 tons are consumed annually, of which 40% is consumed outside the home and the remaining 60% inside.

Particularly indicative are also the recent data from a survey commissioned by the Hellenic Coffee Association to the research company, Kapa Research. Coffee represents a strong modern Greek tradition, as 95% of Greeks purchase coffee. More than 8 out of 10 respondents in the survey drink coffee daily (84%), while most of those who do not drink (66%) ensure they stock their household with coffee. 50% of the respondents buy more than one coffee per day (usually 2 or 3). Specifically, 31% of the respondents drink one daily, 40% drink two, 22% drink three, 4% consume four coffees, and more than four is consumed by 2% of the respondents.

Coffee is a beverage of enjoyment for everyone who consumes it, while 55% point out that it provides them with stimulation, and 42% find it relaxing and restful.