The FINANCIAL — Growth in coffee retail volume sales in Georgia is expected to be slightly slower than during the review period, according to Euromonitor International recent report.
This will be mainly due to increasing maturity, particularly in instant coffee. Nonetheless, the strength of Georgia’s coffee drinking tradition will help to ensure that retail volume growth remains reasonably healthy overall. Retail volume growth will be further bolstered as ongoing economic uncertainty, increasing maturity and intense competition continue to encourage frequent price promotions by manufacturers and retailers. However, as a result of aggressive discounting, coffee retail value sales at constant 2014 prices are expected to decline at a CAGR of 2%.
Kraft Foods continued to lead coffee in Georgia in 2014, claiming an overall retail value share of 30% thanks to the combined strength of its Jacobs and Carte Noire brands, Jacobs, a well established and widely distributed brand that is renowned for its attractive price-quality ratio, was the clear leader in instant coffee in retail value sales terms, and also ranked ninth in fresh coffee. Carte Noire, which is more expensive but perceived as a superior quality brand, finished fifth in instant coffee. Nestlé SA was the second leading coffee player overall with a retail value share of 17%. The company’s world famous Nescafé brand, which has been present in Georgia for many years and benefits from high levels of loyalty and recognition among local consumers, occupied the second leading position in instant coffee. Tchibo GmbH was the third leading coffee company in retail value sales terms with an overall share of 11%. Its competitively priced Tchibo brand ranked third in instant coffee. Other prominent competitors in coffee in 2014 included Cacique de Café Solúvel, Future Enterprises Pte Ltd, Rafael Kontini Trading Compani Ltd and Balavari Tbilisi Ltd.
There is a strong tradition of fresh coffee consumption in Georgia. During the Soviet era, fresh coffee was the only type available in the country. After the collapse of the Soviet Union, the popularity of fresh coffee diminished somewhat as consumers responded very positively to the introduction of instant coffee products, which offer greater convenience. Over the following decades, many consumers migrated from fresh to instant coffee. This trend was initially concentred in urban centres, but gradually spread to rural areas as well. In 2014, instant coffee showed slower growth in retail volume sales than in any other year of the review period. While this was partly due to economic uncertainty in Georgia, the slowdown also indicated that the boom in the category was finally coming to an end. Retail volume growth remained robust overall, however, and was markedly stronger than that recorded by the fresh coffee category. This was partly due to price promotions, though retail volume growth was also bolstered as the trend towards busier lifestyles continued to strengthen consumer appreciation for the convenience of instant coffee.