The total Nordic coffee shop market (Denmark, Finland, Norway, Sweden) is forecast to reach 1,023 outlets in 2015 and is worth €436m.
Recent M&A activity is a positive sign for the future growth of the Nordics coffee shop market. The purchase of the leading Nordics chain Espresso House and Danish chain Baresso by JAB Holdings this year follows independent Swedish private equity group, Valedo, acquiring a share of Danish chain Joe & the Juice in 2013.
Allegra predicts the total Nordic coffee shop market will exceed 1,500 outlets and €814 turnover by 2020, driven by branded coffee chain expansion, with outlets predicted to grow at 8.5% and revenue at 13.3% compound annual growth rates over the next 5 years.
Sweden is the most developed market in the Nordics and remains the model for the branded coffee shop industry in this region
Sweden and Norway are the largest Nordic markets by outlet numbers, although Finland and Denmark have the highest coffee consumption per capita in the Nordics and Europe, with Finish consumers drinking 12kg of coffee per annum per capita and Danes, 9.4kg per capita. Norwegians consume 9kg per capita and Swedes drink 7kg per capita p.a.
Outlet and value growth is observed in all four countries, driven by increased consumer visit frequency and spend. Sweden shows strongest growth at 11.4% annual outlet growth over the five-year period, 2010-2015 and has the most developed branded coffee shop market with an estimated 403 outlets in 2015.
Norway has 269 branded coffee shop outlets; Finland is estimated at 205 outlets and Denmark remains relatively underdeveloped at 146 branded coffee shops. Denmark and Finland are at a pivotal stage of development as global and local multi-national chains target these markets for expansion and market entry, encouraging local chains to further growth.
Espresso House and Starbucks are important catalysts for growth
According to Allegra World Coffee Portal’s definitive report, Project Café2015 Nordics, expansion by leading players, Espresso House, Joe & the Juice and Starbucks remain the key drivers of growth.
The three leading brands in the Nordics (Espresso House, Wayne’s Coffee and Joe & the Juice) have a combined market share of 40% of the total Nordic branded coffee shop market in 2015.
Nordics is becoming a nation of out of home coffee drinkers
Coffee remains traditionally an at-home or at-work beverage in all the Nordic countries. However, the growth of the branded coffee shop market indicates consumers are increasingly drinking coffee out of home.
While coffee shop visit frequency is relatively low compared with other European markets, particularly the UK, this is showing signs of change as consumers indicate their intention to visit coffee shops more frequently in the next 12 months. Markets with a more established coffee shop presence, such as Norway and Sweden, have higher visit frequency than Denmark, which to date is relatively underdeveloped.
- Highlights from the consumer insight for Denmark, Norway and Sweden include:
- Danish consumers have low visit frequency, with just 16% visiting coffee shops at least once a week, highlighting the late development of the market. Norwegians and Swedes visit more frequently with 25% visiting at least once a week
- Danish consumers drink 15 cups of coffee per week at home and 10.1 cups of coffee/week at work. Norwegians drink 14 cups of coffee/week at home and 8 cups at work. Like the Danes, Swedes drink 15 cups of coffee/week at home, however they drink 9 cups at work as they increasingly visit out of home destinations for coffee
- 18% of Danes, 23% of Norwegians and 13% of Swedes expect to increase their visits to coffee shops over the next 12 months, further supporting the view that the coffee shop market will continue to grow
National chains are favoured in Denmark and Sweden, but global chain Starbucks is the favourite branded chain in Norway
- Baresso is the favourite branded chain (19%) among Danish consumers, followed by Starbucks (17%)
- Starbucks is the favourite coffee chain in Norway (28% of consumers), followed by Kaffebrenneriet (11%)
- Espresso House is the Swedish nation’s favourite (24%), followed by Wayne’s Coffee (16%) and Starbucks (11%) Of all the Nordic countries, Norway has the strongest ‘third wave’ coffee movement, led by two former world barista champions and specialty roasters, Robert Thoresen (Kava) and Tim Wendelboe. The small number of independent artisan coffee shops has a strong impact on coffee trends within branded chains, in particular with single origin sourcing.The market will be dominated by brands, but independents will continue to influence the direction of the sector.
- The Project Café2015 Nordics report is now available to purchase from Allegra Strategies World Coffee Portal Limited.
- 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 as they increasingly visit out of home venues.
‘Third-wave’ coffee is well established and highly influential in the Nordics market
Of all the Nordic countries, Norway has the strongest ‘third wave’ coffee movement, led by two former world barista champions and specialty roasters, Robert Thoresen (Kava) and Tim Wendelboe. The small number of independent artisan coffee shops has a strong impact on coffee trends within branded chains, in particular with single origin sourcing.
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 as they increasingly visit out of home venues.
The market will be dominated by brands, but independents will continue to influence the direction of the sector.
The Project Café2015 Nordics report is now available to purchase from Allegra Strategies World Coffee Portal Limited.
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