Coffee Bar Ranking: Chains Push into Europe

 
After totally reshaping the retail and foodservice landscape in the US and Britain, branded coffee chains are rapidly changing the face of Europe. With ‘coffee shop culture’ becoming a key feature of modern European lifestyles, branded coffee bars become an even bigger trend over the next 3-5 years. www.allegra.co.uk
 

 
Allegra’s definitive annual research reveals that branded coffee chains now total 7,174 outlets across 20 European countries covered (not including Russia and Turkey) in the 675 page report. This represents an increase of more than 1,000 outlets added in these countries since Allegra’s last report 18 months ago.While all European markets are characterised by the dominance of small, independent coffee shop operators, the trend is definitely in favour of well-funded and highly sophisticated brands such as Starbucks, Costa Coffee, Caffè Ritazza and, more recently, McCafé. The branded chain market is forecast to grow at a compound annual rate of 9.1% to exceed 11,000 coffee bars by 2012. A number of countries are showing many of the characteristics of the UK market of nearly a decade ago. If the growth achieved over the past decade in the ‘flagship’ UK market is any indication of future European trends, European coffee culture will change significantly in the next few years. The only real difficulty is how to define each market as to what qualifies as a branded chain. Allegra’s report examines the respective markets in terms of food driven or coffee driven and this can be further complicated by a bakery-driven market which, for example, is very strong in Germany.
 

 
The UK, however, is still dominant, accounting for approximately 40% of the market or approximately 3,000 branded outlets. However, Germany and Ireland are two European countries where branded coffee bar culture is truly thriving, with 858 and 326 branded coffee bars respectively. Starbucks quietly surpassed 100 outlets in Germany in September 2007. Allegra predicts the global coffee giant to reach more than 300 German stores within five years as consumers in major cities embrace the new ‘coffee culture’. McDonald’s also now operates more than 300 McCafé outlets within its portfolio of 1,280 German stores. A host of other branded players form an impressive second tier, including Segafredo (90 outlets) and Lavazza (47), Coffeeshop Company (39), Balzac Coffee (34), World Coffee (26) and Coffee Fellows (21). Moreover, Germany’s 858 outlets do not include Tchibo which operates approximately 460 coffee outlets in its 1,000 German retail stores.
 

 
| 3 December 2007 |