Coffee culture rising in Russia

26/09/2005 – Coffee house culture may be on its way to Russia as freshly ground coffee begins to eat rapidly into the market dominance of instant varieties, says a new report.

The value of Russia’s fresh coffee market grew by 10 per cent last year, supported by the country’s boom in consumer foodservice and a “burgeoning coffee culture”, says a report by Euromonitor
The report points out that instant coffee still accounts for 90 per cent of the market in value terms, with sales growing 13 per cent to $2bn in 2004.

In this context, fresh coffee is very much still in its infancy. But, the signs are promising: sales from coffee shops grew in 2004 to account for eight per cent of foodservice distribution, up from five per cent in 2003, and Euromonitor predicts fresh coffee will grow by 36 per cent in volume and 41 per cent in value up to 2009.

One obstacle to growth may be that the dominance of instant coffee leads instead to consumers spending their higher disposable incomes on value-added or premium instant varieties.

The report also says that very few Russian households have filter coffee machines, something likely to hinder fresh coffee’s rise to prominence.

Yet, Euromonitor forecasts that “the increasing western influence on the Russian market and rising levels of disposable income means that consumers are becoming more and more aware of fresh coffee, and are likely to be able to afford filter coffee machines in the future”.

The report comes only a few weeks after US iconic coffee house Starbucks showed renewed interest in Russia.

The chain has been holding negotiations with prospective partners in Russia, including the Arcady Novikov and Arpikom restaurants, for the last few months, according to Russian press reports.

Evidence, nevertheless, suggests it will take time to build a coffee house culture in Russia similar to that now seen in the UK and US. Russia still only has 1,000 coffee houses, less than one outlet per 100,000 people, according to Restcon.

Volume sales of fresh coffee per capita in Russia stand at 100g, compared to 200g in the UK and 2,900g in France.