Retail coffee volume has stagnated in 2020. Retail channels have not been able to absorb demand from foodservice, which has been dramatically impacted by the closure of outlets in order to limit the spread of the pandemic.
Health and wellness coffee remains an underdeveloped niche in the Russian market, especially in fresh coffee. The main reason is that despite the popularity of coffee it is still perceived as an inherently relatively unhealthy drink.
Instant coffee, the largest category in coffee, has continued to lose share of overall sales in 2020 as it has continued to suffer from consumers switching to fresh ground coffee or tea. Consumers who do migrate from instant coffee to fresh ground coffee generally do not switch back.
Total coffee volume is expected to grow steadily throughout the forecast period, supported by consumers returning to foodservice establishments and the revival of on-the-go consumption as consumers return to hectic modern lifestyles. The return of on-trade demand is also likely to support the further development of retail sales, as it encourages growing numbers of consumers to opt for fresh ground coffee in order to recreate their on-trade experiences at home.
Food and drink e-commerce remains a small channel in the Russian market. However, it has seen considerable growth in 2020, as consumers have appreciated its capacity to reduce the risk of exposure to the COVID-19 virus and to allow larger average grocery shops without the problem of personal transportation of goods, as well as the convenience of 24/7 ordering.
Major multinational players, Nestlé Russia OOO and Jacobs Douwe Egberts RUS LLC, are expected to continue to dominate coffee during the forecast period, as their strong supply chains will allow them to keep price rises to a minimum. This will be a crucial factor in the early part of the forecast period, in particular, as the COVID-19 crisis has undermined consumer confidence and purchasing power.
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Understand the latest market trends and future growth opportunities for the Coffee industry in Russia 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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