Consumption in hotels and restaurants, thus, stands at 23 million cups of coffee a year.
These are the first data about the premium coffee market in Romania, a market where international companies like Julius Meinl, illy, Lavazza and coffee shop chains like Starbucks compete. The on-premise (hotels and restaurants) segment is badly affected by tax evasion, as many owners do not report all their revenue.
Taking into account an average consumption of 8 to 10 kilos of coffee per such locations and about 8 grams per cup of coffee, each location serves 1,250 cups of coffee on average.
Total coffee consumption in Romania stands at some 40 million kilos a year or EUR360 million, according to market research company Euromonitor.
The coffee types found on the Romanian market are roasted ground coffee, coffee beans, soluble coffee, coffee-based specialties and capsules.
“There’s definitely a major difference in behavior, habits and ‘going out’ culture, in drinking in restaurants and coffee shops compared with Croatia, Hungary and even Bulgaria. We are significantly behind these countries in this respect,” believes Tibor Dobri, managing director of Julius Meinl Romania.
The best selling premium coffee brands in Romania are Julius Meinl, Lavazza, sold via Blue Coffee Service, part of the wholesaler Aquila, and illy, via Pro Brands Distribution.
Julius Meinl brand of Austrian Meinl family is available in 1,500 locations, while the number of restaurants, coffee shops and bars is 30,000 (17,000 of which restaurants, according to Trade Registry data, the only available).
“This year has seen an upward trend, people are spending again going out for a cup of coffee to socialize,” says Ciprian Anton, operations manager of Gloria Jean’s chain, which has ten coffee shops in Romania.
He says the most difficult for the on-premise coffee market in Romania were 2009 through 2011, and he noticed growth starting in 2012.
According to the data of market research company TNS Info Research Austria, which Julius Meinl official cited, average sales in an on-premise location in Romania stand at 8 to 10 kilos a month. In Croatia for instance, they stand at 18 to 25 kilos per month, while in Austria they amount to 40 to 45 kilos per month, according to the same source.
Tibor Dobri says 2010 and 2011 came with an about 10% decline of the overall coffee market, with the on-premise segment more seriously affected, some 15% to 20% according to Euromonitor data and some 12% according to his estimates.
The executive says he has managed to offset consumption decline by increasing the number of customers in the last few years, as sales to new customers were higher than consumption decline.
However, he thinks the government’s plan to introduce new taxes and change how the excise duty is computed will certainly lead to a new decline in consumers’ purchasing power, which in turn will translate into lower consumer spending and make a negative impact on consumer behavior.
The mere thought that they might suffer from the new taxes causes consumers to react right away and spend less when going out, Dobri says.
Julius Meinl Romania’s managing director sees the market stabilizing next year ‘at best’ and the decline trend stopping in the next two or three years.
A rebound of the on-premise consumption would need a real increase in consumers’ purchasing power, which will not happen any time soon, he says.
(English version by Loredana Fratila-Cristescu)