The biggest growth in coffee is coming from out-of-home consumption, with more and more consumers adopting the idea of ‘cafe culture’.
In the tea category, consumers are showing increasing interest towards specialty tea segments such as green tea and herbal tea due to its perceived health and wellness benefits.
Australia, unlike other Asian countries, boasts of a traditionally strong coffee culture started by European immigrants in the form of local cafes. Coffee drinking has become such an integral part of the Australian lifestyle that it has led to the explosion of many specialised coffee shops, further fuelling the growth of the coffee sector in Australia.
There is huge demand from ‘new age’ consumers who find sitting and sipping coffee in the well decorated cafes fashionable. According to Datamonitor, for every seven cups of coffee consumed by an average Australian, one is consumed out-of-home.
Niraj Lalka, Datamonitor’s senior consumer analyst, said: “In contrast to the western economies, Australians prefer their coffee with milk. However, cafes are not a quick pit-stop for caffeine intake. Rather, Australians prefer to sit back and spend hours drinking coffee in a cafes, making it a place for leisure and business gathering.”
In fact, the unsuccessful attempt by the US coffee chain Starbucks to replicate the US model in Australia is indicative of very specific expectations of Australian consumers, which are difficult to meet by regular western practices.
At-home coffee consumption is witnessing strong demand for high-quality roast and ground coffee as consumers are seeking to replicate the quality and taste of cafe coffee.
According to Datamonitor’s Market Data Analytics (MDA) database, retail coffee sales in Australia grossed A$752m and ranked second, only behind Singapore, in per capita coffee consumption among the Asian economies in 2008.
Although demand for roast coffee is growing, the at-home coffee category is still dominated by instant coffee, accounting for more than 80% of total Australian coffee sales. Nestlé, Cantarella and Sara Lee together account for more than two-thirds of the total coffee sales in volume. Datamonitor forecasts the at-home coffee market to reach A$798m by 2013.
In contrast, the Australian tea category was valued at A$437m in 2008 and is forecast to reach a value of A$473m in 2013.
Tea sales in Australia are driven by the at-home segment with per capita consumption of less than 0.8kg per annum. In contrast, the per capita consumption for out-of-home tea market stands at less than 0.1kg per annum.
The Lipton brand from Unilever, followed by Dilmah and Tetley, are the favourite tea brands among Australians. Fruit/herbal tea and green tea segments are leading the growth in the tea market with around 5% growth over the past decade in comparison to negligible growth in the higher value segment such as black tea.
“Due to its health and medicinal benefits, green tea and herbal tea have found special acceptance among the health-conscious Australian consumers,” said Lalka, based in India.
Consumers in Australia have now matured in their tastes and preference for hot drinks, and are demanding premium products in the coffee and tea categories. To optimise returns, manufacturers are banking on this trend and launching new products with distinctive features such as organic, antioxidants, etc.
In light of all the current indications, Datamonitor predicts the Australian hot drinks market to be in the order of A$1.5bn over the next five years.
Source: Datamonitor
© FoodBev Media Ltd 2024