COFFEE IN GERMANY

Euromonitor International
March 2019
COFFEE IN GERMANY PASSPORT 1

COFFEE IN GERMANY - CATEGORY

ANALYSIS
HEADLINES

 In 2018, coffee stagnates in retail volume terms, while retail current value sales grow by 2%
 Fresh coffee beans outperform all other coffee types in both current value and retail volume
terms
 Foodservice performs worse than retail, with volume decline of 1% in 2018
 Mondelez Deutschland GmbH retains leadership of coffee with a 21% value share, followed
by Tchibo with an 11% value share in 2018
 Over the forecast period, coffee is predicted to post marginal retail volume growth and a 3%
current value CAGR (a 1% value CAGR at constant 2018 prices)

PROSPECTS

Fresh Coffee Beans Gains Share From Fresh Ground Coffee

The persistent growth of fresh coffee beans at the expense of fresh ground coffee was a trend
that was increasingly evident in 2018, as consumers not only opted for a higher number of
espresso machines for home consumption of coffee but were also convinced of the beans’
freshness and better quality over its ground counterpart. However, as the growth of both
espresso coffee machines and fresh coffee beans slowly decelerated in terms of retail volume
sales, established and new coffee brands benefitted from local consumers’ desire to purchase
branded coffee at a higher price that promises a more premium and better-quality coffee
experience. Rapid growth in both current value and retail volume terms can also be sustained
over the forecast period, as fresh coffee beans’ premium character is expected to continue to
gain in popularity amongst German consumers. This will be mostly manifested in significant
growth in retail value sales, as premiumisation is likely to drive a future positive performance.

Fresh Ground Coffee Pods Remains Contested

As fresh ground coffee pods is expected to mature over the forecast period, hard pods are
continuing to take share from their soft counterparts. Within overall pods, the growth of soft pods
is restricted by its relative saturation and its inability to produce significant innovation dynamics,
alongside the fierce competition from hard pods. However, even the growth of the latter does
not come without its obstacles, as consumers are increasingly concerned about sustainability
and authenticity, which have become increasingly important purchasing decision factors.
Consumers who have hitherto not purchased a soft or hard coffee pod machine, are more
reluctant than ever to make this sort of purchase as the amount of waste generated through the
single portions system makes them question its sustainability. Several coffee and packaging
manufacturers have started to launch compostable coffee pods to answer these sustainability
concerns. Changing consumers’ perceptions about the sustainability of pods and convincing
them of the authenticity of the composability claim will be the main challenges facing producers.

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E-commerce: Small But Influential

Internet retailing is at the forefront of newer retailing channels within hot drinks and is being
used more widely as a way of offering consumers convenience when making a purchase. For
coffee, the presence of e-commerce is growing, but remains relatively small as most German
coffee consumers still prefer to purchase their products from bricks-and-mortar stores. Wider
availability of coffee brands in online retailers such as Amazon, coffeecircle.de and
roastmarket.de and easier ordering options are opening up the potential of the e-commerce
space. This development is anticipated to gain further momentum over the forecast period, as
an increasing number of retailers will offer their products online and encourage Germans to
purchase their coffee through the internet.

COMPETITIVE LANDSCAPE

Mondelez Deutschland Retains Leadership of Coffee

Mondelez Deutschland retained its leadership of coffee in value share terms in 2018, due to
its large and strong coffee portfolio in Germany. Of the brands it represents for global brand
owner Jacobs Douwe Egberts, Jacobs and Tassimo performed well, both gaining value share in
2018. However, not all brands of Jacobs Douwe Egberts recorded strong performances in 2018,
such as Senseo hard coffee pods (represented by Douwe Egberts Coffee & Tea Consumer
Products GmbH), which were withdrawn in late 2017 due to a poor performance and low
consumer interest.

Nespresso Creates New Promotional Activity To Attract Consumers

To address the slowing consumption of hard coffee pods, Nespresso collaborated with Media
Markt, a German electronics and appliance specialist retailer, offering free credit to be used on
Nespresso coffee products if a consumer decided to purchase a Nespresso Essenza Mini
Machine and Nespresso coffee. While this promotional activity was only offered for a limited
time period, its aim was to convince new consumers to not only purchase the Nespresso coffee
machine but also to try the Nespresso coffee pods and consequentially invest in the brand in the
long term.

Nestlé and Starbucks Unite the Global and German Coffee Landscape
In 2018, Nestlé acquired the global rights to sell Starbucks coffee products such as its fresh
coffee beans and fresh ground coffee brands through retail, while all products sold through
foodservice (the Starbucks shops) and all RTD products are exempt from this acquisition.
Therefore, brands such as Nescafé, Nespresso and Starbucks are being brought closer
together to create new opportunities for the Swiss company to further expand its presence in
Germany. Furthermore, the company has announced plans to integrate Starbucks coffee into its
coffee capsule system, creating future incentives for Starbucks consumers to tap into the
category.

CATEGORY DATA
NBO Company Shares of Coffee: % Retail Value 2014-2018

% retail value rsp

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COFFEE IN GERMANY PASSPORT 3

Company 2014 2015 2016 2017

2018

Mondelez Deutschland GmbH 18.5 18.6 19.0 20.8

21.0
Tchibo GmbH 13.1 12.4 11.8 11.5
11.4
Nestlé Deutschland AG 9.4 9.9 10.1 10.3
10.2
Aldi Einkauf GmbH & Co 11.5 10.5 10.4 10.3
10.2
oHG
Melitta Kaffee GmbH 8.4 8.3 8.2 8.0
7.7
Alois Dallmayr OHG 7.9 7.4 7.1 7.0
6.8
Lavazza Deutschland GmbH 2.9 3.1 3.4 3.5
3.7
Lidl & Schwarz Stiftung 3.6 3.5 3.5 3.5
3.6
& Co KG
Douwe Egberts Coffee & 3.1 3.1 2.4 2.2
2.1
Tea Consumer Products
GmbH
Krüger GmbH & Co KG 1.2 1.2 1.3 1.4
1.4
JJ Darboven Holding AG 1.3 1.3 1.3 1.2
1.1
& Co
Rewe Markt GmbH 0.6 0.7 0.7 0.7
0.7
Gepa - The Fair Trade Co 0.4 0.5 0.6 0.6
0.7
Alnatura Produktions- & 0.4 0.5 0.5 0.5
0.6
Handels GmbH
Nero Commerce UG 0.2 0.2 0.2 0.2
0.2
Ethical Coffee Co SA 0.1 0.1 - -
-
Kraft Foods Deutschland - - - -
-
GmbH
Other Private Label 6.2 6.1 6.2 6.3
6.5
Others 11.2 12.8 13.3 11.9
12.2
Total 100.0 100.0 100.0 100.0
100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

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