AUSTRALIAN COFFEE STATS
The Australian Coffee Market
Presented to the Australian Coffee Traders Association, Annual General Meeting 19 September 2006
Australian Coffee Market
• Overall, the Australian
coffee market is very competitive but consumers are brand-loyal, and
becoming more sophisticated.
• The increasing sophistication of
the Australian coffee market is shown in the growth of the pure coffee
market. The pure coffee market is made up by the premium, roast and ground
coffee segments. This means that more consumers are buying pure coffee
products instead of instant coffee.
• More than one billion cups
of coffee are consumed in cafés, restaurants and other outlets each
year, this is an increase of 65% over the last 10 years.
•
Australia imports virtually all of its coffee, around 45,000 tonnes of dry
green bean for a total retail sales value of $636 million in 2001. Coffee
consumption per capita has doubled over the last 30 years in Australia,
from 1.2 to 2.4kg per capita in 1998/99; while tea consumption has declined
from 1.2kg to 0.9kg per capita, a decrease of 60% over the same period.
• Instant coffee comprises 80% of total sales, with a value at $516
million, though this percentage is declining slowly.
• Roast and
Ground is a growing sector of the market, currently worth around $96
million in total retail sales value (Source: Euromonitor, March 2002). This
market sector has increased by 28 percent over the last 5 years and
continues to increase as Australian consumers are beginning to appreciate
the higher quality and the convenience of preparation provided by modern
appliances now available.
(Source: BIS Shrapnel, Coffee in Australia 2006-2008; www.vittoriacoffee.com and Australian Bureau of Statistics 2000)
Worldwide Coffee Market
• The world coffee
market is enormous, with almost 8 million tonnes of dry green bean traded
with a farm gate value of over US $10 billion and a retail value of over
US$50 billion.
Graph: Coffee drinking market (kg per head per
year)
(Source: Volcafe)
Product Segments
•
Instant Coffee
The Australian instant coffee market is worth approx
$516M a year.
Dominated by the Nescafe with approx 83% (volume) and
70% market share Consumers are brand loyal & price is not the most
important factor when buying. Product innovation and marketing is a key
success factor to this segment
• Roast and Ground Coffee/Pure
Coffee
This segment is growing and the competition is increasing.
Quality and high innovation is important to this segment and companies
are constantly launching new specialty blends and ‘flavours’
and/or finding new ways of making their products more attractive and user
friendly for consumers.
• Sustainable / Specialty Coffee /
Organic
Sustainable coffee is the sector with the largest growth in
the coffee industry with an annual growth rate between 10% and 20% compared
to general worldwide consumption of 1.2% annually. It has exceeded the
‘specialty coffee’ category which has been increasing between
5% - 10% per year.* Both Rainforest Alliance and Fair Trade coffees are now
available in Australia.
100% certified organic coffee should be
roasted in dedicated equipment. There are many Australian brands which
claim to be 100% organic but the certification is
questionable.
*Please note, that world production year ending 2003 was approximately 6.5Million MT of which totally sustainable coffees made up 85,000MT or 1-1.5% of total production.
(Source: DotPoint and BIS Shrapnel, Coffee in Australia 2006-2008 )
End User Customers
A
Snap Shot:
Inner City Folk: Caffe latte
Outer Suburban Folk:
Cappuccino
Young Men: Espresso
Young Women: Caffe latte
Older Folk: Flat white
Trendy Young things: Variations on the
espresso
The Coffee Consumer Away from Home
• The BIS
Shrapnel report confirms Australians prefer their coffee with milk. In
fact, 90% of cups sold in cafés in 2005 contained milk.
•
The report also shows the cappuccino as the number one coffee beverage sold
in cafés. However, cappuccinos are increasingly being snubbed by
upper income consumers in favour of caffé lattes, particularly
amongst young women.
• The report shows the number one reason for
visiting cafés is “meeting friends” quoted by almost one
third of respondents (32%).
• Consumers’ awareness of
premium coffee is also on the rise. Once not understood by consumers, now
almost a third of Australians (32.7%) prefer Arabica coffee beans.
• The hard-core espresso is preferred by young males and the flat
white is more likely to be ordered by older drinkers.
(Source: BIS Shrapnel report entitled “Coffee in Australia (2006-2008) and www.vittoriacoffe.com)
End User Customers
The Coffee
Consumer In-home
This group includes people who buy coffee and coffee
products from a shop or supermarket to prepare and drink at home or in the
office.
• The in-home market segment is dominated by instant or soluble coffee. This type of coffee is still the largest single sector of the total hot beverage market.
• The retail market for instant coffee is worth A$452 million and represents 47.1 per cent of the total hot beverage market. However, the market for instant coffee is not growing because more and more Australian coffee drinkers are brewing their own coffee at home and often using high quality beans.
• The main area of sales growth for the in-home market is in pure coffee. The ‘Café’ style roast and ground coffees are becoming more popular and a wide range and variety of branded retail packs are now available in shops in Australia.
(Source: Retail World 2003 and BIS Shrapnel, Coffee in Australia 2006-2008 )