Coffee Consumption in Serbia to Reach 39,515 tonnes in 2015

Total volume sales of coffee in Serbia declined by 1% to 35,822 tonnes in 2010. The global economic crisis continued to negatively impact coffee in Serbia in 2010. Both fresh and instant coffee saw a decline in average unit price in constant value terms in 2010. Grand Prom remained the leading player in 2010, in accounting for a retail value sales share of 48%. Total volume sales are expected to see a CAGR of 2% over the forecast period to reach 39,515 tonnes in 2015.

Coffee in Serbia saw slower retail volume and values sale growth in 2010 than the CAGRs seen over the review period as a whole. Performance would have been even worse, but for the strong retail volume and value sales growth seen by instant coffee, which served to partially offset the declines seen elsewhere. However, the retail value sales growth recorded by in both 2009 and 2010 instant coffee was visibly slower than in previous review period years.

Instant coffee has recorded more dynamic performance than fresh coffee in Serbia since the turn of the millennium. This was due to instant coffee being relatively new to the country, while fresh coffee has been present in Serbia for decades. From 2005 to 2010, total volume sales of instant coffee more than doubled from 1,400 tonnes to 3,000 tonnes, while fresh coffee recorded a slow decline in total volume sales from 34,400 tonnes to 32,800 tonnes. This was due to instant coffee being well accepted among younger consumers, as well as the fact that some middle-aged consumers migrated from fresh coffee to instant coffee.

The average unit price of coffee declined in constant value terms in 2010. The average unit price of fresh coffee declined by 2% in constant value terms in 2010, while that of instant coffee saw a decline of 5%. The key reason for this was the consumer migration seen towards less expensive brands in both fresh and instant coffee in 2010.

The domestic player Grand Prom, which is owned by the regional concern Atlantic Grupa, remained the leading player in coffee in Serbia in 2010, in accounting for a retail value sales share of 48%. Grand Prom first appeared in Serbia during the 1990s, when privately-owned companies started to replace state-owned companies, and very quickly increased its distribution and retail value sales share. When Grand Prom was established in 1997, offering reasonable quality products and having a wide distribution network was sufficient for the company to become a key player in coffee in Serbia. Following Grand Prom was Strauss Adriatic with a retail value sales share of 30% in 2010.

Delta Holding, which is the newest player in coffee in the country, recorded the largest gain in retail value sales share in 2010. The company, which is the country's largest retail chain, introduced the private label coffee Fedela in early 2010. Fedela's distribution increased rapidly over the remainder of the year through Delta Holding doo's supermarket, hypermarket and convenience store. It is expected that this private label will continue to gain retail value sales share at the expense of leading players over the forecast period.

Domestic producers continued to account for a leading share of coffee retail value sales in 2010, due to their ongoing dominance in fresh coffee. On the other hand, international players accounted for a larger share of retail value sales in instant coffee in 2010. It is expected that domestic players will see a slow loss of retail value sales share over the forecast period, as instant coffee is expected to continue to record faster retail value sales growth than fresh coffee.

After a very difficult two years for coffee producers in Serbia, it is expected that both retail volume and value sales will see positive growth over the forecast period, while the average unit price is also expected to increase. This improved performance will be driven by the recovery of the Serbian economy. Over the forecast period, consumers will return to pre-recessionary habits and begin to buy more expensive coffee brands once again.

Foodservice coffee volume sales are expected to see a CAGR of 4% over the forecast period. As Serbian economy will continue with recovery from the crisis in period 2011 -2015, it is expected that consumers will start to visit HoReCa more often than in 2009 and 2010 which will increase foodservice coffee sales as dominant drinking choice in Serbian cafés.

Total volume sales of instant coffee are expected to see a CAGR of 5% over the forecast period, while fresh coffee is expected to see a corresponding CAGR of 2% over the same period. It should be noted that instant coffee will achieve this from a relatively limited base, as it is a relatively new category, while fresh coffee is long established in the country.

The Coffee in Serbia report offers a comprehensive guide to the size and shape of the market at a national level. It provides the latest retail sales data 2006-2010, allowing you to identify the sectors driving growth. It identifies the leading companies, the leading brands and offers strategic analysis of key factors influencing the market - be they legislative, distribution or pricing issues. Forecasts to 2015 illustrate how the market is set to change.