Press release: Allegra World Coffee Portal, Project Café2017 Europe Report;

For immediate release: 5 December 2016

European Coffee Shop Market Poised for Cautious Growth

Estimated at 21,198 outlets, the European branded coffee shop market (25 countries[1]) saw a growth of 6.4%, vs. 9% a year earlier, adding 1,268 outlets in 2016.

The Project Café2017 Europe report from Allegra World Coffee Portal (WCP) revealstheUnited Kingdom, Turkey, and Greece are the fastest growing markets in terms of outlet expansion in the last 12 months. 21 of the 25 countries analysed in the report saw expansion, yet the rate of growth has slowed compared to 2015. As the most developed market in the Europe, the United Kingdom remains the model for the branded coffee shop industry.

Continued investment by leading chains saw the top three brands maintain a 32% market share of the total European coffee chain market in 2016. Market leader Costa Coffee operates 2,512 outlets across 12 European countries. McCafé and Starbucks trade from 2,199 outlets across 17 countries and 2,154 across 24 countries respectively. Starbucks was the fastest growing chain in 2016, opening 194 European stores. With its planned entry to Italy next year, it will be present in all major European markets.

Market evolution and the emergence of The 5th Wave

The influentialartisan coffee scene continues togrow across Europe. The report identifies strong sustained growth in markets with an established artisan wave presence e.g. UK, Russia, Nordics, Netherlands. Successful branded chains are adapting to this influence with new in-store design, origin coffee and fresh hand-prepared food.

Allegra WCP predictsThe‘5th Wave, The Business of Coffee’ presents an important new era for the global coffee industry. The 5th Wave encompasses a compelling combination of all four previous waves – Tradition, Branded Chains, Artisan, and The Science of Coffee – where high quality boutique chains will be a major feature of the market going forward. These highly targeted operators will adopt a more advanced set of business practices to deliver authentic, artisan concepts at scale.

According to Allegra WCP, brands who don’t adapt will risk losing business. The report observes traditional branded chains across Europe such as Coffee House, KahveDukkani, Ozsut and Coffea have already suffered multiple outlet closures in 2016.

“We are entering an exciting, yet challenging era for the Europeancoffee industry within a global context. One that will ultimately see the leading brands compete on excellence in an environment where winning is everything” says Allegra Group CEO Jeffrey Young.

Consumer trends

In a period of political uncertainty, coffee consumer confidence is relatively stable in most markets. The specialty coffee trend continues to grow throughout Europe, and isparticularly embedded inthe daily lives of consumers in key markets such as UK, The Netherlands, The Nordics, and Greece. Socialising out of home remains important and has contributed to the rapid adoption of higher quality coffee in the most developed markets.

The future marketplace

The Business of Coffee – 5th Wave concepts – will be a major force on the European coffee industry over the next decade,where unashamedly business focussed brands with genuine and principled concepts will prosper. We will see a greater investment in new technologies from operators tofully engage with savvy millennials and increase consumer satisfaction.

“Success will be defined by brands that develop and retain highly motivated and passionate staff. The industry will put more emphasis on hyper-professionalism and invest in people development programmes to support long term career paths for ‘hospitality professionals.”says Young.

The Project Café2017 Europe Report is now available to purchase from Allegra World Coffee Portal.

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Editor’s Notes

Sources

  • Over 450 online and telephone interviews with industry leaders, including CEOs and Managing Directors of the major coffee chains, key suppliers, industry associations and other industry participants
  • Desk research including trade press, company financials and online data sources

Allegra World Coffee Portal

Allegra World Coffee Portal (WCP) is the global information platform delivering on the global coffee, café and related food-to-go sectors. World Coffee Portal provides data, reports, research and consultancy to help businesses make informed decisions and is the only specialist information platform for senior decision makers in the coffee industry. World Coffee Portal builds upon Allegra Strategies’ nearly two decades of experience in global coffee market analysis.

Contacts

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Hannah Heath

Marketing Manager

Allegra World Coffee Portal

+44 (0)20 7691 8836

Anya Marco

Director of Research and Insight

Allegra World Coffee Portal

+44 (0)20 7691 8800

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World Coffee Portal Limited registered address:

Walkden House, 10 Melton Street, NW1 2EB

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[1] Includes: Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Republic of Ireland, Italy, The Netherlands, Norway, Poland, Portugal, Romania, Russia, Slovakia, Spain, Sweden, Switzerland, Turkey, and the UK