Insomnia Coffee, Cork

The total Irish coffee shop market is estimated at 502 outlets and continues to outperform the Irish retail sector with significant sales growth of 14%, to reach total turnover of €284m.

According to Allegra World Coffee Portal’s definitive report, Project Café2015 Ireland, the coffee-focused market has driven overall growth in the last 12 months. Physical expansion by leading players, Insomnia, Costa and Starbucks, is the key driver of growth. However, smaller chains, such as Coffee Angel, closed stores and Nosh n Coffee exited the market.

Market leader, Insomnia, has 96 units and a 31% outlet market share. Insomnia has strong expansion plans and several new partnerships, including Debenhams, Compass and SPAR UK.

Costa is the second largest branded coffee shop chain, with most of its stores located regionally.

Ireland is becoming a nation of coffee drinkers

Ireland is historically a tea-drinking nation; the coffee drinking culture emerged about 10 years ago and the report shows that Ireland is now an emerging coffee-drinking nation. 83% of coffee shop visitors drink coffee at least once a month and 62% drink coffee daily. This is marginally less than the UK where 95% of coffee shop visitors drink coffee at least once a month and 75% drink coffee daily. Coffee is mostly consumed at home (10 cups per week), followed by at work (4 cups) and then in coffee shops (3 cups).

Currently 71% of consumers visit coffee shops at least once a week and 1 in 5 claim they intend to visit coffee shops more often in the next 12 months, fuelling further growth in this emerging market.

The third wave is now well established in the Irish market

The Irish coffee shop market has a burgeoning independent scene that is positively influencing the direction of the branded sector. It is also increasing competition within the market. The third wave/artisan coffee segment has profoundly influenced operator and consumer expectations about coffee quality and store design.

There has also been a greater commitment to coffee credentials by the non-specialist sector, such as fast food, supermarkets and retail stores, which has generated wider consumer participation while adding to competitive pressures.

Strict planning laws impact expansion plans for branded chains

Strict planning laws in central Dublin which discourage more coffee shops and restaurants in Dublin make securing new sites centrally a significant challenge. As a result, growth from branded chains will be focused outside of Dublin.

Total Irish branded market to reach 750 outlets and €610m turnover by 2020

Allegra World Coffee Portal predicts the total Irish coffee shop market will exceed 750 outlets and €610m turnover by 2020, driven by branded coffee chain expansion and non-specialist operator growth. The branded coffee shop segment is forecast to exceed €360m across 515 outlets by 2020 with outlets predicted to grow at 9.0% compound and revenue at 14.5% compound over the next 5 years.

The future coffee shop marketplace will be shaped by further increasing consumer participation and more savvy consumers, with the desire for premium quality coffee anywhere and anytime, driving improved coffee offers across a broader set of channels.

The market will be dominated by brands, but independents will influence the direction of the sector.

The Project Café2015 Ireland report is now available to purchase from Allegra Strategies World Coffee Portal Limited.