Capsule sales driving coffee demand sky high

With the coffee category in Australian supermarkets valued at $234 million in the 12 months ending January 2015 and with sales up 13% (or $26.4 million) on the previous year, it’s a product category that grocery and convenience stores should pay close attention to.

Australia’s love affair with coffee and our fanatical café culture has been long been documented, including our obsession with the flat white, cappuccino, macchiato, piccolo, double shot ristretto and endless other varieties, said Hugo Pinto, associate director – Retail Industry Group, Nielsen.

“Even at home, coffee is clearly still our drug of choice with 83% of households spending an average of $94 on coffee from grocery outlets in the 12 months ending January 2015 (up $1.60 versus the previous year),” he said.

“Using Nielsen ScanTrack Consumer to pinpoint exactly what is driving this positive shift in coffee sales, we can see that more than half of this growth ($19.1 million) has been driven by an increase in frequency of purchase; existing consumers buying coffee more often. An additional $6 million was injected to the category with the recruitment of new buyers, possibly lured in by innovations offered in the form of coffee capsules or pods.”

Breaking down the category’s performance by key segment, capsules is by far the biggest driver of growth, capturing an additional 10 share points of the category in the past 12 months (from 27% YA to 37% TY) – and bringing an incremental $29.1 million sales in the last year.

Sales performance for traditional coffee segments, ground coffee (down -4.3% versus year ago) and coffee beans (up a modest +2.8% growth versus year ago) paled in comparison.

“From a demographic perspective, there has been a clear evolution of the importance of small scale families and independent singles within the Capsule segment. These two segments account for more than 50% of capsule sales,” Mr Pinto.

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