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Germany’s Coffee Market
By Manfred Korner

While Germany’s coffee consumers may feel unhappy about increasing retail prices, roasters are sighing in relief at the recent turnover on investment and reimbursement of higher costs of raw coffee and transportation.

The Route to Cup
The total turnover of the industry, including sales of soluble coffees, was EUR 4.0 billion in 2005 after EUR 3.4 billion in 2004, which represents an increase of almost 17.6%. Coffee sales, in terms of volume, however has decreased by 4.4%.

Recalculated to green coffee equivalent was some 502,835 tons or 8.38 million bags that were processed to roasted and soluble coffee. This represents a new low as compared to the early ‘90s, which was well over 600,000 tons. The distribution of green coffee imports showed an increase of Robustas from 23% in 2003 to 29% in 2005. Correspondingly, the share of Arabicas fell from 77-71%. This shift in preferences is due to a rising demand in espressos and similar coffee drinks, as well as to refined technologies in treating Robustas so as to make them an acceptable blend to Arabicas.

While roasted coffees lost sales of 20,500 tons, soluble gained by 500 tons each year. Yet, not all roasted coffees lost. Big winners were the ever-growing segment of espresso and caffè crema with an increase of over 60%, including imports from Italy. Also sales of coffee pads and pouches nearly tripled.

The market share of various segments showed little or no change. Treated decaf coffee decreased to 9%, untreated others increased to 53% in 2005.

Top Running Soluble Coffees
Germans consumed some 6.1-kg of coffee per head this year, which is -- again -- less than in the previous year. However, there is some hope that this trend might be slowing. During the last years, the industry was successful in changing coffee’s image from an old fashioned beverage for the elderly into a more fashionable lifestyle drink for the younger generation. This is reflected in a multitude of new and innovative coffee drinks offered in trendy coffee bars, and the rapid spread of high quality private roasting shops.

While difficult to assess due to the lack of statistics, the out-of-home consumption is estimated to be 25% of the total market.

Whether consumed in private or out of home, soluble coffees represent a success story of its own. Their consumption has consistently increased from some 15,000 tons in the early ‘90s to an actual 55,700 tons. There seems to be no end to further growth. Instant coffee drinks hold the lion’s share within the soluble market, which accounts for nearly 80%. By far, the largest and most popular drinks are instant family cappuccinos with a remarkable two-digit increase in volume at cost, however, of traditional and aroma cappuccinos. The same holds true for latte macchiato. While this specialty has nearly doubled its market share other specialties like iced coffee, café au lait, and “wiener melange” lost due to weak demand.

Catch the Gourmet Taste
While there are some 250,000 points of sale in the out-of-home market, where coffee is served almost any time, small private roasting shops and bars have been mushrooming particularly in big cities like Hamburg. Coffee chains, such as Starbucks or Balzac, paved the way for this new development. Well-off consumers are cultivating an ever growing sense for refinement and individuality concerning their coffee drinking habit. This has resulted in the start-up of small roasting shops where consumers are offered different kinds of gourmet coffees for tasting and have their chosen coffee variant roasted on the spot, and according to their individual preferences.

Shop operators are -- in most cases -- not professionals from the established coffee business, but young dedicated coffee enthusiasts of different professional and mostly non-coffee background. On sale are most exquisite and exotic gourmet coffees like the Hawaiian Kona Extra Fancy, the Jamaica Blue Mountain or the hand-picked Kopi Tongkonan Toraja from the Sulawesi highlands in Indonesia.

Prices for an ordinary 500 grams pack of such delicacies amount up to EUR 150. Yet, it sells, and while it’s no bulk business, margins are extremely high. “The Germans are discovering the very special flavors of individual gourmet variants. What is now happening to coffee has been happening to wine some decades ago,” said Annika Taschinski and Thomas Kliefroth of the Elbgold roasting shop. Now in their mid-30s, both nourished a special enthusiasm for the green bean since their early youth. They started their business after nine years of professional preparations and are proud of their success.

Tea & Coffee - November/December, 2006


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