Coffee in Kazakhstan

PROSPECTS

While instant coffee dominates, demand for fresh coffee increases as varied consumer groups search for higher quality

While demand for coffee in Kazakhstan continued to increase in 2019, the dominant format of instant coffee showed signs of maturity due to its long-standing presence and its preference amongst traditional coffee drinkers in the country. The category offers well-known brands, and is appreciated for its convenience factor as it is easy and quick to prepare.

Development of coffee culture supported by urbanisation and Western trends

Urbanisation is having a positive impact on the development of a coffee culture in Kazakhstan, as consumers living in large cities, especially those enjoying rising disposable incomes due to a positive economy, continue to pursue increasingly sophisticated lifestyles, including the purchase and drinking of fresh coffee. This trend is also being driven by the increasing number of younger Kazakhstanis that are returning to the country after pursuing higher education in Europe and the US, where they have been introduced to westernised habits and the strong café culture in those regions.

Strong growth for foodservice as consumers enjoy socialising and indulging

Foodservice continued to perform strongly within fresh coffee, supported by the increasing number of cafés and specialist coffee shops in the country, particularly in large towns such as Almaty and Astana. Demand for fresh coffee beans is much higher through foodservice than it is for retail, as consumers appreciate the experience of having fresh coffee prepared for them by baristas, for which they are willing to pay.

COMPETITIVE LANDSCAPE

Multinational players dominate, but competition is offered by regional companies

Coffee in Kazakhstan continued to be dominated by leading multinational players Mondelez Kazakhstan TOO (which locally represents the Jacobs brand for Jacobs Douwe Egberts) and Nestlé SA (offering instant coffee brand Nescafé). Mondelez continued to strengthen its leadership of both fresh and instant coffee in value terms in 2019, due to the wider portfolio of Jacobs.

Players capitalise on growing interest in coffee by launching new products to Kazakhstan

Many players are diversifying their product portfolios with new flavours and exciting and attractive packaging designs, in line with the increasing demand for premium quality brands. In 2019, Kazakhstani player Coffeelogia TOO launched an interesting range under its Coffeelogia line with new flavours including Shanyraq, which is a blend of grapefruit, caramel, and chocolate; Nomad blend, which offers a combination of peach, nut and cocoa; and Brazil Santos, which combines nut and chocolate flavours.

Advertising and promotions through evolving modern grocery retailers help to raise consumer awareness

Increasing awareness of coffee in Kazakhstan is being driven by the advertising and promotional efforts of major brands such as Nescafé, MacCoffee and Jacobs. These brands benefit from their owners’ larger marketing budgets with frequent campaigns run through television, billboards in streets and special offers and in-store discounts in retailers.

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