As the European Coffee Symposium travels to Warsaw, we put a spotlight on the Polish coffee shop market.

  • Poland has a highly fragmented yet flourishing coffee shop market undergoing considerable consolidation as international brands expand and weaker chains struggle to survive
  • The branded coffee shop market in Poland is estimated at 708 outlets as of October 2016, increasing by 100 units representing growth of 16%
  • Market leader McCafe (333 stores) is the driver of growth and opened 93 stores. It is now present in the majority of McDonald’s 366 outlets
  • Costa Coffee re-branded its remaining Coffeeheaven outlets and now trades from 12 stores
  • Previously Empik Cafe, the newly re-branded So!Coffee (50), closed 5 stores
  • International brand Starbucks (47) added 4 stores
  • Caffe Nero entered the market in 2013 with the joint branded company, Green Caffe Nero and added a further 7 stores to operate from 39 in Warsaw
  • Non-specialist players offering specialty coffee include Stop Cafe (PKN Orlen petrol stations) with 1,250 outlets and Wild Bean Cafe (BP) with 356
  • The average price of beverages remained stable. The average price for a single espresso is €1.55, a medium cappuccino is €2.44 and a medium latte €2.43
  • Estimated at 2.3 kg per year, Poland has one of the lowest consumption of coffee per capita in Europe
  • The Polish economy is one of Europe’s most resilient, following a drip in the last two years, growth has returned to the Polish economy with GDP growth of 3.3% for 2016
  • Trading conditions for branded coffee shops in Poland remain stable. Poland has a strong economy and higher than average consumer disposable income. However, in smaller towns consumers have lower spend and this is a challenge to coffee shop expansion
  • The growth of specialty coffee and rise of branded chains in  Poland are producing more demanding consumers who can get a decent quality coffee anywhere, any time
  • Key day-parts for the Polish is breakfast, when consumers want a good savoury food offer alongside their coffee and early evening, when Poles like to socialise in coffee shops rather than bars
  • A high footfall location, good quality coffee with compelling freshly made food offer and delivering good value for money are the key success factors for Polish coffee chains
  • Poles are highly sociable and enjoy drinking coffee with affordable fresh food. Pre-packed food is unappealing to Poles. Successful chains are those that tackle this issue with innovative ranging, production methods and deliver freshly made hot and cold food
  • The importance of high footfall areas to the success of a branded chain means that high property costs as well as volatile taxes remain an issue, especially for smaller chains
  • Labour costs and the cost of training are also among the key challenges named by industry leaders. Price consciousness is also still an issue, particularly with the older demographic
  • With McCafe present in the majority of McDonald’s outlets, the recent growth spurt is anticipated to halt.
  • Further investment from Costa, Green Caffe Nero and Starbucks will drive future growth, together with the potential for other leading international chains to enter this vibrant market. Poland is forecast to grow at 6.3% p.a. over the next 5 years to exceed 950 outlets by 2021.

 

Allegra Strategies, Project Café17 Europe — November 2016