Western Europe is the biggest coffee market in the world. It has been experiencing a strong premiumization trend, contributing to an increase in high-quality offerings and higher expectations from consumers. Sustainability concerns are pushing the growth of coffee beans, whilst coffee pods are set to expand in France and other, less mature markets. Instant coffee is expected to continue to decline as consumers are moving towards more sophisticated coffee formats.
Coffee continues to experience premiumization in western Europe
Premiumisation is now embedded in the Western European coffee market. It has driven significant product diversification and elevated consumers’ standards in terms of taste, origins, packaging style, and organic and fair trade certification.
Nestlé remains the leading coffee company in western Europe but faces competition as compatible pods flourish
Nestlé, with its Nespresso and Nescafé Dolce Gusto brands, maintains the leading position in the market and has increased its market share, due to marketing efforts and new product launches. Newmarket entrants have, however, sought to challenge the leader, and have gained share by offering high-quality coffee pods which are compatible with the Nespresso and Nescafé Dolce Gusto systems, while embracing a similar premium brand identity.
Sustainability concerns are growing, pushing the growth of coffee beans, whilst the coffee pods boom extends to less mature markets
Sustainability concerns amongst consumers regarding pods packaging have grown in Germany and the Nordic countries, which is negatively affecting the prospects for the format and favoring the growth of coffee beans. Conversely, in less mature coffee markets, such as Ireland, Portugal, and Turkey, coffee pods are expanding, as consumers are responding to the premiumization trend.
Hypermarkets and supermarkets remain dominant, discounters gain shares in Norway, Denmark, the Netherlands, and the UK
Hypermarkets and supermarkets remain the biggest and major distribution channels in Western Europe, yet discounters are experimenting with a more premium strategy with respect to their coffee product offering, adjusting to the general premiumization trend, whilst maintaining aggressive pricing. This is enabling them to increase their share of distribution in Norway, Denmark, the Netherlands, and the UK.
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Source: Euromonitor