Right now it is hard to tell the future from coffee grounds

This article is available for reading in Trade magazin 2024/8-9

This was accompanied by a single-digit rise in value sales, largely due to inflation.

Coffee prices are still rising on the world market

Premium is holding up

Zoltán Kedves
coffee and premium
spirits business director
Coca-Cola HBC

“In the January to June period sales of capsule, ground and whole beans coffee were 0.6% higher in volume and 1.3% bigger in value than in the same period of 2023. We expect the higher priced capsule and whole bean segments to continue the sales growth in the coming period”,

says Zoltán Kedves, coffee and premium spirits business director of Coca-Cola HBC Magyarország.

Nóra Nagy
Lavazza category
manager
Orbico

Nóra Nagy, Lavazza category manager of Orbico Hungary Kft.:

“Lavazza produced a double-digit sales growth in both value and volume in the first four months of 2024. What we see is that the premium coffee segment has been less affected by the decline in purchasing power”.

Storm clouds in the world market

Oszkár Laknerfi
general manager
Mokate International
Hungary

Oszkár Laknerfi, general manager of Mokate International Hungary Kft. reports that coffee prices are still rising in the world market, with robusta sometimes being more expensive than the much higher quality arabica.

“At the beginning consumers reacted to the price hike by donwtiering, but after a while the steady rise in prices led to a visible drop in consumption. In the last 6 months the price of coffee has augmented by over 70%”,

he adds.

Noémi Szuna
head of marketing
Cafe Frei

The Cafe Frei brand is present in both retail and HoReCa – in the latter channel they run over 70 domestic and several foreign units – and their pricing in both sectors is influenced by the cost of sourcing and green coffee production.

“Market forecasts indicate that the price of coffee is rising with small and large fluctuations, but it will continue to increase and become more expensive in the long term”,

explains Noémi Szuna, head of marketing at Cafe Frei Kft.

Setback? More like a transformation

Owing to the growing prices in the coffee market, the overall premiumisation of the coffee market seems to be stalling, according to Coca-Cola. The company’s view is that a transformation of coffee consumption is taking place instead of a decline in coffee drinking. The market for capsule coffee, which has been a driving force for the last 3-4 years, has started to grow again after a temporary lull, but more and more consumers are buying whole bean coffee because they get a better price per portion. Orbico Hungary Kft.’s observation is that consumers (especially in the ground coffee segment) are more price-sensitive and watching out for special offers. In the case of capsules the company sees a shift towards larger packs. One of this year’s novelties is that the already popular Rossa and Crema e Gusto products become available in capsules compatible with Nespresso machines. In response to the trend towards larger format, they are offering 30 capsules in a pack.

A növekedés motorjai az elkövetkező időszakban is a magasabb árkategóriájú kapszulás, valamint szemes kávé szegmensek lesznek

Sustainability and growing region based selection

For years the capsule coffee segment has been one of the most promising and evolving categories in the category, so it is no wonder that a large part of the innovation work is focused here.

Edit Szalai
brand manager
Nestlé Hungária

“We have experienced the success of new, special products when we launched Starbucks® by Nespresso® flavoured capsules last year. This year we came out with a whole range of products in the Nespresso-compatible capsule market, under the NESCAFÉ® Farmers Originals brand name”,

informs Edit Szalai, brand manager of Nestlé Hungária.

The aluminium capsules are made from 80% recycled materials and can be recycled almost infinitely. All capsules contain growing region selected ground and roasted coffee, from Africa, India, Brazil and Colombia.

While there is indeed a noticeable shift to private label products, manufacturer brands have remained popular, as brand loyalty, sticking to the familiar and seeking quality are still important

The average price increase varied across the different coffee segments and this had a different effect on consumer indicators. Households bought less of the coffee types whose prices increased the most: ground and roasted, Xin1 and traditional instant coffee volume sales decreased by 5-7%, while the prices of these products increased by 8-18%. Although their average prices are relatively high, whole bean and capsule products managed to grow in volume (by 12% and 4%, respectively), with much lower average price increases of 4% and 3% if compared to the other segments. //