Coffee in Azerbaijan

2021 DEVELOPMENTS

Coffee sees a rebound in foodservice as the channel reopens following the pandemic disruptions

After a year of disruptive activity within the foodservice channel in Azerbaijan in 2020, due to pandemic restrictions, consumers became eager to return to cafés and coffee shops as they reopened. This was further boosted by a return to offices, alongside the ramping up of the COVID-19 vaccine programme in the country.

Instant coffee remains in demand for many consumers, with many consumers seeking sweet three-in-one options

Instant coffee continues to demonstrate a flat yet positive performance in 2021. Despite being a very mature category, instant coffee remains a safe and traditional option for consumers after a stressful year of pandemic restrictions and the Armenia-Azerbaijan conflict.

Fresh coffee trends mostly limited to large cities such as Baku

Fresh coffee remains a smaller category in Azerbaijan, although demand is slowly increasing for higher quality coffee and, thus, fresh variants – albeit on a small trajectory. This is predominantly seen in big cities, such as Baku, which adopt the coffee shop culture and thus inspire young urban dwellers to follow the modern trends by offering a growing range of varieties and blends.

PROSPECTS AND OPPORTUNITIES

Fresh coffee set to become more popular over the forecast period, albeit at modest growth levels

Fresh coffee is expected to demonstrate higher growth than instant coffee over the forecast period, albeit at levels slower than seen pre-pandemic. The slow growth is attributed to the low development levels in fresh coffee, alongside the prevalence of on-trade channels (especially post-pandemic) and the general culture of consumers drinking sweet, pre-mixed, instant coffee in the country.

International players will continue to lead coffee over the forecast period

International companies will continue to lead coffee in Azerbaijan – such as the currently leading Nestlé Azerbaijan Ltd with Nescafé. Already-established brands will strengthen their positions along with the development of modern grocery retailers overall and, in particular, will expand to remote areas in the country.

Coffee landscape not expected to change drastically over the forecast period

The coffee landscape is not expected to change drastically in Azerbaijan over the forecast period. With the increase in the COVID-19 vaccination process, on-trade facilities will continue to retain and grow their shares.