Coffee in Ukraine

2021 DEVELOPMENTS

A muted performance for coffee as demand remains under pressure

The COVID-19 pandemic continued to exert a very negative influence over sales of coffee in 2021 as only very moderate sales growth was registered in the retail channel and only a partial recovery of sales was seen in the foodservice channel. While the impact of the adverse economic of the COVID-19 pandemic cannot be underestimated, the category’s underwhelming performance can be largely attributed to the major changes that have been seen in consumption habits among the Ukrainian population since the onset of the pandemic.

Various players benefit from the greater focus on high quality and premium brands

The trend towards higher-quality types of coffee with higher price tags continued to build during 2021, despite the impact of the COVID-19 pandemic. This was evident in the strong sales growth recorded in fresh coffee beans over the course of the year, as well as the extremely robust growth registered in fresh ground coffee pods.

Brands offer better value for money in a bid to woo consumers

As mentioned above, the adverse economic impact of the COVID-19 pandemic continued to have a major influence over sales of coffee during 2021. While a robust sales recovery was seen in the foodservice channel, retail sales growth was far more muted during the year as the pressure that has come on household incomes since the onset of the COVID-19 pandemic led to lower levels of consumer spending.

PROSPECTS AND OPPORTUNITIES

The premiumisation trend set to continue building as the economy recovers

The shift towards more expensive types of coffee that was in evidence in Ukraine throughout the review period is expected to continue building during the forecast period as well as consumers become increasingly sophisticated in their coffee tastes. This premiumisation trend can be expected to boost value growth across all categories of coffee, but is most likely to have a strong impact in fresh coffee due to the higher unit prices that are typical in this category.

Demand for fresh coffee beans and fresh ground coffee pods set to boom

The strong sales performances recorded in fresh coffee beans and fresh ground coffee pods towards the end of the review period are expected to continue into the review period, a reflection of the increasing interest in high-quality coffee and the desire of consumers to recreate the on-trade premium coffee experience at home. While this is likely to put some pressure on demand for standard fresh ground coffee, it is also expected that consumers who have until now been drinking instant coffee will want to trade up to fresh ground coffee as the economic situation improves.

Greater use of promotions and shift towards e-commerce to emerge

The anticipated shift towards more expensive types of coffee is also expected to result in higher levels of competition in fresh coffee as category players vie to take full advantage of rising demand. For this reason, the impact of price promotions is likely to become more tangible in fresh coffee as brands look to attract the attention of consumers and lure them away from their current preferred brands and products.