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Germany is a coffee nation as it is the most important beverage in Germany.

According to a study in 2012, about 86% of the German adults drink coffee on a regular basis, with approximately 150 litres of coffee consumed per person per year Therefore coffee is the most popular drink, in the country. An average German consumes about 1.43 cups per day. 

The country imports almost 20% of total imports, worldwide. Moreover, Germany is the biggest market exporter of processed coffee products in Europe. The German coffee market is expected to register a CAGR of XX%, to reach a market value of USD XX million, during the forecast period, by 2023. The country excelled in the domestic coffee roasting process and has a large and efficient coffee processing industry. Further, it exports both green and roasted coffee beans to other European countries.  In addition, Germany is the third largest coffee market in the world after the United States and Brazil. Mondelez Deutschland, with a retail value share of 19%, continued to lead the coffee market in 2016, followed by Tchibo with 12%. 

 “Lifestyle and Culture of Germans drive the Coffee Market”
The 27.6% of the population, aged between 18 and 29 years, consider coffee machines to be the status symbol marker, compared to the 17.7 of the elder populace aged 50 years & above. Further, the early 50% of all German coffee drinkers are willing to spend more money for quality coffee. As a matter of fact, a majority of German coffee drinkers relish drinking their coffee at home alone, as a moment of respite. However, more than half of them prefer on-the-go option. This trend is mostly prevalent among the young, aged between 18 and 39 years, compared to the elderly population of 50 & above years, that prefer drinking coffee outside of their homes.  Moreover, coffee consumption at home, especially filter and instant coffee, are mostly consumed in the morning for breakfast. However, the consumption in “coffee bars” is preferred, instead, during other. A comparison of coffee lifestyle in Germany’s main cities reveals differences as well as interesting trends. For instance, in Hamburg, one-third of the population aged between 18 and 29 are rediscovering the trend of having coffee and cake in the afternoon, which was followed by the 50+ generation.  In the capital city, Berlin, about 47.1% of the young drinkers seek out varieties in coffees and aromas, which is a result of the innovative drinking locations, from vintage-style coffeehouses to modern co-working spaces. There is a less generation gap in Berlin, as both young and old enjoy meeting friends in simple neighborhood cafes. The availability of wide-range of coffee type, flavors & brewing styles and increasing number of food outlets, retail stores and cafes are some of the other factors driving the coffee market. Further, price fluctuations of coffee beans is a major restraint to the German coffee market.

Key Trends
Consumption of cold brew coffee is a growing trend in the Germany. Costa, Starbucks and Brew lab are some of the players expanding their cold brew product segment in the country. The United Kingdom launched the Starbucks’ two-year-old nitro cold-brew concept in 2016. The cold-brew coffees, infused with nitrogen, are available on tap at the Starbucks Reserve Bar in London and in 100 more stores. The nitrogenisation helps to unlock the smoothness and natural sweetness of the company’s cold-brew coffee recipe. The brew lab offers the cold brew coffee in three forms namely bottled cold brew, nitro cold brew and as a concentrate.
The Ready-to-Drink Coffee (RTD) demand is rising. The falling popularity of soft drinks including the caffeinated colas is driving sales of RTD coffee. Further, the on-the-go consumption pattern of consumers is increasing its demand. This demand has encouraged biggest players to jump into the RTD sector. For instance, in 2016, Dunkin Brands partnered with Coca-Cola to bring a new line of cold coffee beverages to retail, in 2018.

The consumption of specialty coffee is increasing as the shoppers are prioritizing experience over price. Although most consumers in Germany continue to purchase inexpensive (bulk) coffee, the population willing to pay higher prices for high-quality coffee is increasing, thus, highlighting the exceptional qualities and importance of the origin.The coffee-producing countries (e.g. Ethiopia, Indonesia and Guatemala) offer various national-level grading systems, used to describe the highest qualities. 

Individualisation of coffee consumption is growing in the Germany coffee market. Further, the Single-serving options in a variety of flavors are, as well, available in Germany. Currently, coffee capsules account for about 15% of the coffee market. These capsules make it convenient for the consumers to drink high-quality coffee, throughout the day. Further, supermarkets sell a broad assortment of coffee (including capsules and single-origin varieties) to cater the preferences, expectations (including sustainability) and consumers’ needs. In addition, the mainstream roasters are working to develop more individualised products, thus, accelerating the price differentiation. 

Market Segmentation
“Arabica holds the highest share in the coffee market”
The Germany coffee market, based on type, has been segmented into Arabica, Robusta and Liberica. Arabica holds the highest share followed by Robusta and Liberica. By product type, the market is segmented into whole-bean, powder, instant coffee and others. Further, based on flavor, the market is categorized into flavor and non-flavor. Instant coffee is the fast growing segment.  The convenience and versatility in flavor and aroma of instant coffee make it an attractive drink for consumers. The flavor segment is further segmented into vanilla, caramel, Irish cream, hazelnut and others. Furthermore, the process category consists of two segments, caffeinated and de-caffeinated, where caffeinated coffee holds the largest market share of more than 80%.

Some major market players are: Kraft Heinz, Tchibo, Starbucks, Nestle, Strauss Group, Segafredo, Caffe Nero


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