Coffee in Spain

PROSPECTS

Positive performance sustained by economic recovery

Spain’s economy consolidated its recovery in 2018. In a context of rising consumer confidence, retail sales of coffee recorded positive figures.

Value growth fuelled by consumers’ move towards products offering greater value

Product innovation is set to be a key driver of growth within coffee over the forecast period. New products are expected to combine convenience and quality for increasingly demanding consumers.

Coffee pods hugely popular but environmental concerns remain

The campaign for sustainable consumer products is gaining momentum in Spain, with some regions announcing the ban of non-environmentally-friendly aluminium and single-use plastic pods in the medium term; a measure that could be introduced nationwide in the medium term. Some brands such as Toscaf and Oquendo already offer fully compostable coffee pods, leading to an increasing number of brands launching sustainable pods over the forecast period.

COMPETITIVE LANDSCAPE

Nestlé maintains leadership competing with Jacobs Douwe Egberts

The coffee giant Nestlé remained uncontested in its leadership of coffee in Spain in 2018. Jacobs Douwe Egberts ranked second and consolidated its position in standard fresh ground coffee, which it leads, though its lost value share due to its weaker performance in the dynamic fresh ground coffee pods with its brands L'Or Espresso and Senseo.

Environmentally-friendly initiatives to compete

Players present in the increasingly popular fresh ground coffee pods have been extremely active from an environmental perspective through the launch of biodegradable products and the development of environmentally- friendly initiatives. Greater concerns that single-use plastic and associated products such as aluminium are likely to be negatively impacted by tougher legislation and, therefore, coffee players and retailers are developing recycling schemes to tackle environmental issues associated with coffee pods.

Private label continues to gain share

Despite coffee continuing to be dominated by the larger brands in 2018, private label continued to further increase its presence across the category. Despite Spanish consumers enjoying higher disposable incomes and an increasing preference for better quality products, price sensitivity remains high.

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