Sales of soluble coffee beverages such as Cappuccino rose by 17.2 per cent during the year, while Espresso volumes increased by 8.3 per cent, well ahead of the 1.8 per cent gain for traditional soluble coffee sales, according to the latest data from the Deutscher Kaffee-Verband (DKV), the German coffee roasters' association.
The increased sales for speciality coffee products came despite a 1.7 per cent decline in the market as a whole to 532,030 tons of raw coffee, due primarily to the exceptionally hot summer weather which saw consumers switch to cold drinks.
This drop in overall volumes was compounded by a drop in retail prices, which resulted in total turnover for the German coffee industry falling to €3.50 billion from €3.60 billion in 2002. The average price of a 500g pack of roast ground coffee dropped from €3.06 to €3.00 during the year.
The DKV said that sales of caffeine-free ground coffee dropped slightly in 2003 to 43,000 tons, giving a market share of 9 per cent (down from 10 per cent a year earlier). In contrast, 'normal' ground coffee saw its share rise by 1 per cent to 52 per cent during the year.
Espresso coffee sales continued to show good growth during the year, however, driven by both the at-home and coffee bar markets. Total volumes rose by 8.3 per cent to 13,100 tons, and Espresso is now a serious rival to traditional soluble coffee as the second most-popular variety in the German market. Soluble coffee sales rose by just 1.8 per cent during the year.
This figure does not include sales of speciality products, which showed by far the biggest growth in the year. Cappuccino accounts for 85 per cent of this segment, while Viennese Melange has a 5 per cent share. Ice coffee sales - boosted by the hot summer weather - accounted for a further 6 per cent.
Coffee is by far the most popular beverage in Germany, with average annual consumption put at 158 litres per capita by the DKV, but despite the dominance of the increasingly commoditised roast ground coffee there are still major opportunities for producers, in particular in the speciality coffee market where margins are higher.
With Germany's ongoing economic problems likely to mean further retail price cuts for roast ground coffee, especially as more consumers switch to discount stores as they tighten their belts, real growth in the market is likely to come from these specialty products, which also have the added advantage of being convenient and quick to produce.