In the face of economic uncertainties, Europe’s branded coffee chains have demonstrated remarkable resilience, with the total European branded coffee shop market expanding by 3.3% to reach 45,008 stores over the past year, according to the latest findings from the World Coffee Portal.
Key Highlights:
- Market Growth: Despite economic challenges, 33 out of 40 major markets experienced a net increase in outlets.
- Expansion Leaders: The UK, Russia, Turkey, and Spain emerged as frontrunners, each adding over 100 outlets.
- Contractions: Germany, Greece, Austria, and Cyprus saw a decrease in outlets.
- Top Operators: The top 20 largest European operators, including McCafé, Starbucks, Costa Coffee, Greggs, and Caffè Nero, collectively represent nearly half of the total branded coffee shop market.
- Industry Sentiment: 42% of European industry leaders foresee an improved trading environment over the next year.
Trends Driving Growth:
- Specialty Coffee: Specialty coffee emerged as a major trend, with smaller and mid-sized chains deploying boutique-at-scale models, catering to the rising demand for premium and specialty brews.
- Premium Segment: Premium coffee chains in Scandinavia and Iberia are thriving, challenging international competitors with quality-focused offerings.
- Expansion in Central and Eastern Europe: Rapid expansion was observed in markets like Romania, where domestic operators are driving growth.
Outlook and Forecast:
Industry leaders express cautious optimism for the future, with the European branded coffee shop market expected to surpass 46,600 outlets within the next year. World Coffee Portal forecasts a continued growth trajectory, reaching over 52,800 outlets by March 2029, reflecting a 3.2% compound annual growth rate.
Insights from Allegra Group CEO:
Commenting on the report, Allegra Group Founder and CEO Jeffrey Young emphasized the challenges faced by coffee chains but highlighted the enduring consumer demand for quality coffee experiences. He stressed the importance of efficiency and value perception amidst rising costs, urging operators to focus on innovation and quality to thrive in the evolving market landscape.
In conclusion, despite economic headwinds, Europe’s branded coffee sector remains resilient, driven by innovation, quality, and evolving consumer preferences.