Coffee in Russia

PROSPECTS

Fresh coffee continues to record strong retail volume and value growth

Fresh coffee registered strong retail value and volume growth in 2018 due to greater product availability and the expansion of modern grocery retailers. The increasing numbers of specialist coffee shops and fast food outlets also supported retail growth as consumers sought to replicate their experience of premium coffee in these outlets at home.

Fresh ground coffee pods become a part of everyday life

Fresh ground coffee pods recorded strong growth from a small base in 2018 as major players invested in new product development. Hot drinks appliances are becoming more affordable for the average consumer.

Developing coffee culture

This will be supported by the growing development of a coffee culture and the increasing popularity of consuming coffee away from home. Wider product availability led by the expansion of modern grocery retailers is also set to support sales in the off-trade, as are declining average unit prices when measured at constant 2018 levels due to increasing promotions by manufacturers and retailers.

COMPETITIVE LANDSCAPE

Increasing competition in instant coffee leads to price erosion

Average unit prices of instant coffee declined in 2018. Shoppers are accustomed to deep discounts and offers from retailers across a range of consumer goods.

New product development an effective competitive tool

A great deal of new product development was witnessed in 2018, especially in fresh and instant coffee. Luigi Lavazza ventured into instant coffee with its Prontissimo brand, while Orimi Trade launched fresh ground coffee pods.

Private label’s share declines in 2018

Private label’s share in coffee continued to decline in both retail volume and value terms in 2018 for the third consecutive year as major players offered lower prices on their brands. As a consequence, consumers often chose well-known brands which they perceive as offering higher quality for the same price.

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