The market study covers the present scenario and growth prospects of the global organic coffee market for 2017-2021. The report also lists fresh and roast and ground as the two major product segments, of which the fresh organic coffee segment accounted for more than 61% of the market share in 2016.
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Technavio analysts highlight the following three market drivers that are contributing to the growth of the global organic coffee market:
- Rising popularity of coffee among millennials
- Growing number of cafés globally
- Expansion in the retail landscape
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Rising popularity of coffee among millennials
Rising affluence and changing consumer choices have been fueling the demand for high-quality and specialized coffee products, such as coffee with different flavors and aromas, among the young population base. An improved economy and increased job opportunities have made different types of coffee affordable to younger consumers. Compared to other demographic segments, millennials are more likely to spend on premium beverage brands.
“Rising health consciousness is influencing consumers to shift toward a healthy lifestyle. Organic coffee is perceived to be of better quality in comparison to regular coffee as it does not contain any toxic residue of synthetic fertilizers, herbicides, pesticides, artificial flavors or colors, and preservatives. Hence, the demand for organic coffee is increasing,” says Manjunath Reddy, a lead analyst at Technavio for food research.
Growing number of cafés globally
Café culture and the trend of socializing at cafés has become quite popular among the urban youth population. The increased influx of people to urban areas and a substantial white-collar demographic is fueling the increase in the number of foodservice outlets. Varied tastes and preferences for different types of fresh coffee have given rise to several coffee shops, specialty coffee shops, and quick-service restaurants (QSRs).
With the growth in the number of coffee-themed restaurants, coffee manufacturers will receive several branding opportunities. Coffee-themed restaurants offer premium coffee products to consumers, causing them to seek these premium products at retail stores. Leading café chains such as Starbucks, Costa, and Barista are opening their outlets in the emerging economies. The growing popularity of malls and shopping centers has also induced players to invest substantially in the distribution of coffee through these establishments. In FY 2016, Costa a leading coffee chain in the UK opened 255 new stores worldwide.
Expansion in the retail landscape
Across the globe, the organized retail sector is expanding significantly with the establishment of supermarkets, hypermarkets, and specialty stores. Organic coffee products are primarily sold by large organized retailers.
In addition to the growth in the organized retail sector, the expansion in the online retail sector is also driving the global organic coffee market. Europe, the UK, Germany, and France exhibit significant potential for the growth of organic coffee products through the online retail sector due to growing preference of customers to shop online. Most customers now prefer to shop online primarily owing to the convenience factor. Also, with improved security features for payment, consumers do not hesitate to make online transactions for their purchases.
“Online shopping offers efficient customer service and customer-friendly website designs that offer enhanced product visibility. This trend along with the high internet penetration rate in developing countries has been encouraging manufacturers to shift their focus toward the internet-savvy customer segment and venture into the online retail format,” says Manjunath.
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