Instant Starbucks won't herald consumer exodus – industry

By Neil Merrett

- Last updated on GMT

Related tags: Instant coffee, Coffee

As café chain Starbucks announces plans to offer instant coffee at its stores to diversify in the current economic climate, the European coffee industry says it does not expect a similar shift in consumer habits in the near future.

Roel Vaessen, secretariat of trade body the European Coffee Federation (ECF), says that with the economic downturn still relatively a new concern, it remains too early to tell if consumers may switch to instant coffee en mass on the back of financial concerns.

Despite general resilience in demand for coffee products, the ECF suggested that in some national markets boasting an established take-away drinks culture, it had begun to observe a shift towards home brewing.

Instant Starbucks

The claims come as Starbucks is expected to announce this week that it will be launching a new-patented form of coffee that can match its trademark espresso beverages in an instant format.

The coffee retailer claims that it has been working for twenty years on the new technology as part of plans to enter the $17bn instant coffee segment.

As Starbucks looks to diversify it operations, after last year announcing plans to close 600 of its US stores, Vaessen told BeverageDaily.com that there was reason to suspect that store bought coffee was baring some brunt related to the economic downturn.

However, he suggested that sustainable and premium forms of coffee were still an affordable luxury to global consumers.

“Premium, fair trade and organic coffee each have their dedicated audience, and price is not the determining factor in their purchases,” ​said Vaessen.

Trends

Responding to some consumer perceptions that instant coffee did not match the quality afforded by some other coffee products, Vaessen claimed that such opinions were based more on individual preference than fact. He added that some claims regarding quality had not taken into account advances within the market for instant forms of the bean.

“It is correct to say that instant coffee manufacturing technology has made big strides and old misconceptions need to be revised,”​ Vaessen said.

Despite expected resilience within the overall demand for coffee, the ECF suggested that there is growing interest among consumers for products geared towards individual preparation and convenience, whether in roasted or instant form.

Growth predictions

The predictions are backed by recent consumer research into the coffee segment by analyst Euromonitor, which suggest that in both Eastern and western Europe, consumer demand for fresh and instant coffee will continue to rise.

According to its predictions, the analyst predicts that, excluding the foodservice industry, demand for fresh and instant coffee will increase by three and five per cent respectively on a year-on-year basis for 2009 in Eastern Europe, said the analyst.

On the same terms, Euromonitor believes that demand for fresh and instant coffee in Western Europe this year could increase by 0.07 and two per cent respectively.

Related topics: Markets

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