BMi Research Annual Quantification Report, Coffee in South Africa, September 2013

BRAND ACTIVITY

Nov 15th, 09:45

Market Trends

The coffee market saw domination this year by a few top players, who pushed the volumes in the industry up. These players have products in all four of the market’s sub-sectors so their influence was felt all-round.

The largest of these volume growths was seen in the pure ground coffee sector, a market which also saw the largest growth per capita consumption. This is a popular category, with a lot of effort being put in by manufacturers and importers to attain growth during 2012.

The lowest growth came from both the mixed ground market and the pure instant market, with increases in 2013. The mixed ground market has lost share to pure ground, but the pure instant markets biggest downfall is the quantity of products which are imported, which has caused the average pricing of this product to increase, and as such it has not seen much popularity from consumers in the past year. Given the erosion of the Rand value on international markets, this pricing trend may continue in future.

The majority of coffee is sold within the retail sector, with the exception of pure ground, which is heavily promoted in the foodservices industry through the use of coffee machines. This market has seen a growth in share of market since 2011. Retail lost share in 2012, as wholesale and the exports market grew.

Product Definitions

Pure Ground
This product comprises only pure coffee and has no chicory content. Before consumption, this coffee needs to be brewed using a coffee-making machine. Coffee beans that have not yet been ground are quantified within this coffee type, regardless of whether these are Arabica or Robusta.

Pure Instant
This product comprises coffee beans that are roasted, ground and brewed. The liquid coffee is then either spray-dried or freeze-dried before being packaged as coffee powder or granules. The use of chicory is excluded from this coffee type, and thus it is termed “pure”. This coffee does not require any further filtration and may be brewed instantly with the addition of hot water before being consumed, thus it is defined as “instant coffee”.

Mixed Ground
This coffee type entails a blend of coffee and chicory that needs to be brewed and filtered by a coffee-making machine before consumption.

Mixed Instant
The definition of mixed coffee in this report entails a blend of chicory and coffee. Chicory is often used as a coffee extender because it is less expensive than pure coffee. Chicory is a small plant where the roots are dried, cut and roasted, in a similar method to raw coffee beans, and finally ground.

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