Europe Specialty Coffee Market – Latest Advancement & Trends

Description

Europe Specialty Coffee Market Overview
Europe Specialty Coffee Market Size Was Valued at USD 46.06 Billion in 2023 and is Projected to Reach USD 66.13 Billion by 2032, Growing at a CAGR of 4.1 % From 2024-2032.
Coffee that achieves an evaluation of 80 points or higher on a scale of 100 points from a Certified Coffee Tester (SCAA) or a Certified Q Grader is referred to as specialty coffee (CQI). Since specialty coffees are grown at the ideal height, at the optimal time of year, in the best soil, and are then selected at the ideal time, they are coffee at their best and distinct from other types of coffee. One of the most intriguing and tasty coffees in the world resulted from all of this. Just a few years after the first Starbucks store opened, the phrase “specialty coffee” was first used in the 1970s in the Coffee and Tea Trade Journal. Coffee has changed from being a contemporary convenience to becoming a consumer experience, thanks to establishments like Starbucks and Peet’s. Since then, advancements in cultivation, roasting, and brewing technology as well as the expanding market for premium coffee have made specialty coffees available to coffee drinkers all around the world.

Moreover, about 30% of the world’s consumption of specialty coffee comes from the European market, which is a large one. Additionally, the market is saturated, with Brazil and Vietnam contributing half of the green coffee consumed in Europe. While consumption is projected to stabilize over the next few years, Europe will still be a desirable market for coffee. This creates opportunities for smaller players who are more concerned with long-term connections and quality than price points. In the previous five years, the specialty coffee market in Europe has experienced substantial expansion. There are a ton of opportunities for suppliers with high-value and high-quality items in this unquestionably unique market. Given the tremendous demand for both common coffee blends and their more expensive, higher-quality alternatives, this is a particularly interesting period for the European coffee business. The rise in small coffee roasters, regional brands, and baristas is a sign of specialty coffee’s rising appeal. As a result, during the projection period, the expansion of the specialty coffee market in the European region is driven by the rise in consumption.
Market Dynamics And Factors For Europe Specialty Coffee Market
Drivers:
Specialty Coffee is Augmenting Segment in The European Market

The majority of consumers in Europe continue to purchase affordable, conventional mixes, and ground coffee for filters, capsules, and pods. However, more and more European consumers are prepared to pay extra for premium coffees. Some customers will also pay more for coffees that have a compelling origin narrative, as well as sustainable environmental and social components. Large trading companies adding specialty coffees to their portfolios demonstrates how the market is growing in prominence. One of the first major companies to establish a branch devoted to sourcing specialty coffees was InterAmerican Coffee, which is owned by Neumann Kaffee Gruppe. Other more recent examples include Olam Specialty Coffee, Volcafé Specialty, Rehm & Co (owned by Benecke Coffee), and Sucafina Specialty (formerly known as 32Cup).

Although more and more big names in the coffee industry are entering the specialty market, there are also a lot of independent trading firms in Europe that specialize in certain niches. These businesses specialize in importing low quantities of specialty or single-origin coffees at attractive rates. Examples include Nordic Approach, Belco, This Side Up (the Netherlands), Coffee Quest, Trabocca, and Belco (France) (Norway). The rise in coffee shops, independent roasters, local brands, and baristas throughout Europe is also a sign of the growing interest in specialty coffee. However, the COVID-19 epidemic has significantly impacted restaurants, coffee shops, and other out-of-home businesses. For instance, during March and April 2020, coffee consumption in restaurants and coffee shops declined by about 76% in Germany, whilst during the same period, it is thought that 92% of coffee shops in the United Kingdom had to temporarily close. In recent years, the specialty segment’s growth has primarily been led by this region.
Restraints:
Effects Of COVID-19 On the European Specialty Coffee Sector

Governments in Europe have implemented measures including social isolation and lockdowns as a result of the COVID-19 epidemic. These have had a significant impact on restaurants, coffee shops, and other out-of-home businesses. For instance, during March and April 2020, coffee consumption in restaurants and coffee shops declined by over 76% in Germany, whilst during the same period in the United Kingdom, approximately 92% of coffee shops had to temporarily close. In recent years, these venues have driven coffee consumption, especially in the specialty market. Due to these factors, online purchasing for consumption at home has become more popular. Roasters have begun to offer products online, either through their websites or through distributors like Shipsbeans. To combat the issue, independent coffee shops and micro-roasters typically demonstrate a high level of inventiveness. As a result, even though independent small businesses have been severely impacted, it is anticipated that the majority of them will weather the crisis.
Opportunity:
Blockchain Is Becoming More Popular as A Technology to Improve Traceability and Transparency

You can utilize blockchain technology as a tool to improve traceability, accountability, and transparency. It is a free platform for tracking and storing data that is decentralized and also supports cryptocurrency. This means that, in the instance of coffee, the database records transactions in a verifiable and permanent manner, allowing the origins and travels to be tracked. A roaster may therefore see the origin of the coffee and the price that was paid for it in the past when the coffee is entered into the blockchain. Producers can also view the final buyer and price of their coffee sales. Blockchain can build and enhance partnerships by bringing together data about end consumers and providers. While producers can spend in connecting with customers and enhancing access to farms by sharing information about the amount and availability of harvests, it enables roasters to establish secure claims of direct trade. Some perceive one of the main obstacles to the successful adoption of blockchain as being the accessibility of blockchain, particularly in more rural areas, as well as the education about blockchain’s advantages. Farmer Connect is one example of how blockchain technology is being used in the coffee business. This platform was introduced in 2020 to enhance traceability throughout the whole coffee supply chain. It has big industry partners on board, such as Jacobs Douwe Egberts, Sucafina, and Colombia’s National Federation of Coffee Growers. Farmer Connect is also going to target consumers with an app called Thank My Farmer. The app iFinca is another example, which connects consumers and farmers, and verifies farmgate prices.
Segmentation Analysis of the Europe Specialty Coffee Market

By Grade, the 90-100 grade segment is expected to dominate the segment owing to the chrematistics associated with these grade points. Furthermore, a coffee grade helps buyers & sellers globally align their anticipations with each other. This factor also helps to drive the segment’s growth.

By Product Type, instant coffee segments are expected to have the maximum market share from this segment over the forecast period. The market has developed as a result of variables including quality, skill, and the variety of options available in a single serving of espresso. Additionally, people are ready to purchase convenient RTD coffee pods. To compete in this lucrative industry, some well-known consumer coffee brands have started to sell instant coffee. In February 2020, Starbucks and Nestlé unveiled a line of “premium” instant coffees following the announcement of their collaboration in 2018. For manufacturers, the rising demand for instant coffee may also be advantageous. Due to the pandemic’s temporary closure of several cafes and cancellation of orders from roasters, many roasters are left with green coffee stockpiles as of the first quarter of 2020. Source This abundance of goods means that they cannot buy new imports from the producing countries. Therefore, many gardeners have been forced to price specialty lots.

By Application, the commercial segment is expected to dominate the market over the forecast period. Due to rising coffee consumption and the growing number of commercial capsule machines being used in offices around the world, the commercial segment dominated the market. Although huge corporations don’t usually sell specialized coffee items, they help to shape customer preferences for purchases made at coffee shops and other out-of-home locations. Smaller, more specialized coffee shops that serve specialty or high-quality coffees are taking advantage of this market trend.

By Distribution Channel, the retail distribution channel is expected to hold the maximum market share over the forecast period. Retail is selling products directly to consumers. Additionally, when roasters are involved in the end-to-end sales process, they can better understand consumers and their preferences. Furthermore, the growing demand for ready-to-drink coffee, capsules, and coffee pods is developing the coffee market. Further, the region is anticipated to register substantial growth in both volume and market value during the forecast period owing to the rapidly rising coffee shop culture, fresh-ground coffee pods, and capsules.
Regional Analysis of the Europe Specialty Coffee Market

Scandinavian countries are among the top coffee users worldwide per capita. The Scandinavian market is mostly focused on high-quality coffees. Internationally, nations like Sweden, Denmark, and Norway are regarded as significant players in the specialty coffee business. The Specialty Coffee Association of Europe was established in Norway. In Scandinavia, the specialty coffee market has been expanding steadily for years. This is partially reflected in the significant increase in consumption outside the home, which indicates that customers in Denmark, Sweden, and Norway are increasingly seeking out specialty, premium coffee at coffee shops. Since 2010, the three European nations with the highest growth rates in coffee shop retail sales are Denmark, Sweden, and Norway.

Specialty coffees have a significant market in France as well, although it took some time for them to grow. Specialty coffees are expected to have a 2% to 3% market share of France’s overall coffee market by 2019 and are expanding significantly. By 2025, it is anticipated that specialty coffee in France would account for 10% of the country’s overall coffee market. France’s market for specialty coffee shops has expanded dramatically, especially in bigger cities like Paris. Honor and Matamata Coffee are two instances of specialized coffee shops in France. Alter Eco, fair trade and responsible coffee importer, and trader BELCO, which concentrates on high-quality coffees, are two more coffee chain players with a strong focus on specialty coffee.

Traditionally, British consumers drink more instant coffee than customers in other European nations, however, specialty coffee sales are expanding quickly in the UK. Out-of-home consumption has a significant impact on this growth. This market is being shaped by the growth of specialty coffee businesses like Grind, GAIL’s, and Joe & The Juice as well as the engagement of well-known brands like Starbucks, Costa Coffee, and Caffè Nero. The market for coffee shops in the United Kingdom is currently the biggest in Europe and has been expanding steadily for the past 20 years. There were 25,892 coffee shops in the UK in total in 2019, 1,400 of which were specialty coffee shops. For instance, the shops include Small Batch Coffee Roasters, Union Brew Lab, Caravan Coffee Roasters, Wood Street Coffee, and Redemption Roasters.

Germany’s domestic specialty coffee business is expanding. Over the past few years, out-of-home consumption has increased gradually, expanding by 5% in comparison to 2018. About 12% of all coffee consumed in Germany each year in 2018 was consumed outside the home. Europe’s largest market for coffee shops is in the United Kingdom, with Germany coming in second. German coffee shops are leading the way in introducing top-quality coffees to consumers, creating prospects for exporters of fine coffees as out-of-home consumption rises in Germany. The growth of small-scale roasters like Berlin’s Supremo (Unterhaching), The Barn, Five Elephant, and Flying Roasters is another notable development in the region’s specialty coffee market.

The Eastern European market for specialty coffee is a lot smaller than in North Western markets, but it shows interesting potential. The largest and fastest-growing Eastern European markets for specialty coffee are the Czech Republic, Hungary, Poland, and Romania.
Top Key Players Covered In Europe Specialty Coffee Market

Caribou Coffee Company

Carte Noire

Dallmayr Prodomo Ground Coffee

Blue Bottle

Leroux

Bulletproof

Costa Coffee

Jacques Vabre

Eight O’Clock Coffee

Don Francisco’s Coffee

Caffè Nero Group Ltd.

JAB Holding Company

Luigi Lavazza S.p.A.

Strauss Group Ltd. and Other Major Players.
Key Industry Development In The Europe Specialty Coffee Market

In November 2024, The Nero Group is announced acquisition of London-based FCB Coffee, a move that strengthens its position in the transport sector. With this addition, The Nero Group now boasts over 50 locations across train and underground stations in the UK, enhancing its presence in high-footfall commuter hubs. FCB Coffee’s reputation for quality and convenience aligns seamlessly with The Nero Group’s commitment to delivering exceptional coffee experiences.

In March 2022, Olam Specialty Coffee is expanding its brand and e-commerce platform to Europe after more than ten years of supporting the specialty coffee business in the US. Olam Specialty Coffee is now enabling European customers’ online sample requests and direct purchasing of its traceable specialty coffees thanks to new sites that cater to customers in the UK and EU.