After seeing slow but stable total volume growth for most of the review period, in 2020 coffee has seen a slow decline as a result of COVID-19. However, whilst the on-trade channel has seen a significant decline, the off-trade channel has seen dynamic growth.
Although both fresh and instant coffee have seen much higher growth rates in 2020, the trend seen over the review period has been maintained, with fresh coffee seeing a better performance than instant coffee in off-trade volume terms. Although instant coffee offers convenience, more consumers are being attracted to the better taste of fresh coffee.
Nestlé Portugal has continued to lead coffee in off-trade value terms in 2020. It has seen a strong increase in its value share thanks to its strength in the highest-growth category, fresh ground coffee pods with its brands Nespresso and Nescafé Dolce Gusto, as well as the 2020 launch of the Starbucks brand.
After seeing an exceptionally strong increase in off-trade sales during 2020, coffee is set to turn to decline in 2021, losing some of the ground gained in the previous year. This is because as the virus comes under better control and restrictions on the opening of foodservice outlets are eased, consumers are expected to start to return to on-trade outlets.
Coffee is expected to present a positive total volume increase over the forecast period overall, mainly due to the strong performance of fresh coffee. Fresh ground coffee pods is expected to continue to drive growth, not only off-trade, but also on-trade, with a growing number of companies investing in developing higher-quality options and more outlets choosing the convenience of using pods, which are cleaner, give uniformity of flavour and save space.
With the standardisation brought about by coffee pods, whereby it is possible to find similar high-quality coffee with different systems, differentiation will need to be built around marketing, sourcing and production. For instance, brands and companies have already invested in certifying their products to prove sustainable practices, and have been launching special products to differentiate.
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Understand the latest market trends and future growth opportunities for the Coffee industry in Portugal with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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This report originates from Passport, our Coffee research and analysis database.
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