Hot Drinks in France

Downward pressure on hot drinks’ volume persists, but value grows

Hot drink’s largest category in France, coffee, continued to be characterised by the shift from standard fresh ground coffee to fresh ground coffee pods. Requiring a lower quantity of coffee per serving compared with ground coffee, the growth of fresh ground coffee pods translated into downward pressure on retail volume sales, but upward pressure on unit price, leading to stronger current value growth.

Consumers favour healthier, premium and more convenient options

Per capita retail volume consumption of green tea in France ranks third highest out of 17 Western European markets, compared to eighth for overall tea, highlighting the relative popularity of green tea in the country. Both green tea and fruit/herbal tea are enjoying strong sales as they benefit from health and wellness associations.

Leading brands increase marketing efforts but smaller brands flourish

2018 was typified by the continued marketing confrontation between Nestlé France and Douwe Egberts France, the latter being particularly proactive in promoting its coffee brands. This includes an advertising campaign for Grand'Mère, a brand previously unsupported for a number of years, as well as an expansion of the product range for L’Or, including L’Or Espresso fresh coffee beans, and a marginally more premium pricing strategy for Senseo in soft pods.

Unilever launches Pure Leaf, while Douwe Egberts expands Grand'Mère

Unilever renewed its efforts in tea with the launch of Pure Leaf, positioned as a premium organic black and green tea from unique individual plantations, available in pyramid tea bags or as loose tea leaves. There was also a range of launches in fruit/herbal tea, including new flavours for Unilever’s Elephant (Mon Infusion BIO), as well as new flavours for local brands Les 2 Marmottes and Pagès.

Growth of capsules in both coffee and tea will slow

Fresh ground coffee pods, the driving force behind the retail value growth of coffee, is predicted to slow in current value terms in addition to retail volume terms over the forecast period, partly due to maturity, while also a result of environmental concerns, placing increasing pressure on businesses. Coffee remains highly mature in France and companies will struggle to grow in volume terms over the forecast period, while current value growth will continue to grow due to product innovation and increasing consumer sophistication.

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