Denmark instant coffee market is estimated to be valued at US$52.391 million in 2020 and is anticipated to decline by a CAGR of 2.06% during the forecast period.
The consumption of instant coffee in Denmark is supported by its convenience in quick preparation. Coffee has gained popularity in the previous years among the younger generation in the country who live a fast-paced lifestyle. Additionally, the instant coffee adoption in the country is further supported by the improved quality of coffee products compared to previously sold instant coffee products. Intense competition prevails among the instant coffee producers in the region, and it is hard to compete due to consumer loyalty toward their preferred brands.
As per the CBI, the Centre for the Promotion of Imports from developing countries estimates that more than 90% of the coffee is imported by Denmark, Sweden, and Norway. These are imported directly from the producing nations. The onset of small speciality coffee roasters provides opportunities for direct trade models, further opening spaces for a wide range of suppliers in the Scandinavian coffee industry.
Talking in terms of retailing, the grocery sector did not show robust growth rates in the previous years. This is mainly because Danish consumers are price sensitive and only prefer to spend on quality brands when the price is right. The consumers in the region continued seeking value-for-money product solutions for groceries. This was quite evident from their shopping behaviour, where consumers preferred discounters over other distribution channels like hypermarkets and supermarkets for their grocery shopping. Also, greater emphasis was laid on the advertising of products when on discounts or promotions. Hence, cheaper shopping outlets are preferred among consumers in the country.
The coffee end market, on the basis of quality, is classified as upper end, high end, middle range, and lower end. The low-end segment consists of low-quality blended coffees. Around 40% to 100% of the coffee beans are of the Robusta variety. The segment contains ground coffee, coffee pods, and instant coffee. Hence, it is concluded that the overall market for instant coffee in Denmark is projected to decline with a constant decrease in retail sales of lower-quality coffee during the forecast period. This is mainly due to the growing consumer shift towards consuming high-quality coffee with more than 80 cupping scores. Speciality coffee is gaining momentum and is currently a niche market in the region. The growing consumer demand for high-quality coffee and willingness to pay a high price further offer strong growth prospects for speciality coffee in the region.
Product Offerings by the market players in the Denmark instant coffee market
The offering of better and advanced varieties of instant coffee with enhanced flavour and aromas, among others, by existing and new players in the market.
COVID-19 Insights:
COVID-19 had a negative impact on the Denmark instant coffee market. The surge in active cases led to the mandated lockdown across the nation. Subsequently, the closure of coffee houses and food outlets led to a decline in sales.
Segmentation: