“I am convinced that over the next five years the market will stabilize somewhat and very many coffee shop will open. People will spend more and more time in coffee shops,” Dan Ursu says.
“Everything is connected to the living standards. I think every Romanian would like to spend more time with various activities, go out to a movie, to the theater, not just to the coffee shop.”
Pro Brands Distribution’s portfolio includes coffee, coffee making equipment (illy), tea (Darmann) and chocolate powder (Monbana). The company operates on the hotel, catering and restaurant segment, on the office and home segment and on the retail segment.
Another brand available in Romania is the illy issimo, created by a partnership between Coca-Cola Company and Italian coffee producer illy. The illy issimo ready-to-drink coffee is distributed by Coca-Cola HBC Romania on the local market.
There is no data available about the number of coffee shops open in Romania. The number of bar and restaurant companies (whose revenue is above zero) is about 17,000 in Romania, according to Finance Ministry data.
Rivals on the coffee market include Lavazza and Julius Meinl.
Dan Ursu says the distributor he runs signs more contracts than it loses every year.
“Our customer number increased during the crisis. We saw growth in the number of coffee shops but coffee consumption per coffee shop dropped slightly,” says Mirela Ionescu, marketing manager of Pro Brands Distribution.
Pro Brands was established in 2003 and the latest data available on the Finance Ministry website show it to have posted almost 21 million lei (EUR4.7 million) revenue and RON1.4 million net profit in 2013.
“Last year was a good year, we saw single-digit growth.”
According to ZF data, the annual consumption of premium coffee (ground coffee and beans, no instant specialties) in restaurants, outdoor bars and coffee shops amounts to more than EUR40 million.
Dan Ursu says the habit of going out is more developed in mature economies and that shows in consumption.
“Coffee shop distribution is quite low in Romania compared with developed and less developed markets. One example is Croatia where there is habit of going out for a cup of coffee. We do not have this habit compared with countries like Italy, Croatia and Greece.”
On the other hand, in Romania, people who do go out for a cup of coffee also buy something else to go with it, not just one cup of coffee, and sit at the table to have it not drink it quickly at the bar, he says.
“People in Italy just drink a cup of coffee at the bar, but they do go to coffee shops five times a day. Romania has this thing of meeting friends at the coffee shop, have a chat, drink some wine, some coffee.”
Unfortunately, Romania does not have as many coffee shops as he would like and no one does any surveys about the number of coffee shops and the amount of coffee sold, Dan Ursu added.
There is still room to educate the Romanian consumer, however, Pro Brands Distribution officials say, although things have improved quite a lot in this department over the last few years.
“The Romanian consumers have become more educated, more selective. Some send the coffee back because it does not taste or look good, because it has to be prepared in a specific way. In some parts of the country like Timisoara, people are borrowing from Italians’ culture,” Mirela Ionescu says.
(English version by Loredana Fratila-Cristescu)