Denmark instant coffee market is estimated to decline by a CAGR of 3.01% during the forecast period.The consumption of instant coffee in Denmark is supported by its convenience in quick preparation. The 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 in comparison to the previously sold instant coffee products. Intense competition prevails among the instant coffee producers in the region, it is hard to compete due to consumer loyalty towards their preferred brands.
As per the CBI, the Centre for the Promotion of Imports from developing countries estimates, 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 specialty coffee roasters is providing 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 due to the fact that 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 discount or promotion. 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 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 the consumption of high-quality coffee with more than 80 cupping score. Specialty 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 for it is further offering strong growth prospects for specialty coffee in the region.
Additionally, with the outbreak of novel coronavirus, the market is further set to experience a decline in 2020 due to the closure of coffee shops and other public gathering places in the country. However, the government allowed the reopening of shopping malls and restaurants from May 11 after the country managed to control the spread of novel coronavirus. Nonetheless, restrictions are imposed on the number of people and opening hours.