The Ho.Re.Ca coffee market in the CEE countries, including Hungary, Czech Republic, Slovakia, Slovenia, Croatia, Serbia, and Bosnia, has demonstrated significant recovery since the aftermath of the Corona pandemic. In 2023, manufacturer revenues in the region reached 217.4 million EUR, surpassing the pre-pandemic level of 2019 (206.4 million EUR). Although the market quantity of the CEE gastro coffee market increased by 27.1% in 2022, sales fell by -1.8% to 13,343 tons in 2023, as a current study by Interconnection shows.

Hungary’s Coffee Makers Bake Smaller Bread Rolls

Hungary, in particular, poses challenges as its Ho.Re.Ca coffee market contracted by 17.0% in quantity. Manufacturer revenues decreased moderately by 2.2% to 24.7 million EUR in 2023. Double-digit inflation rates in Hungary led to real wage losses and people were obviously saving money on the small luxury coffee. Conversely, Croatia experienced positive growth in 2023 and the market increased by 4% to 2,500 tons. The trend was supported by high tourist spending’s as tourism achieved record-breaking overnight stays.

Ground Coffee Still Important in Czech Republic and Slovakia

Country-specific differences add complexity, with the market share of ground coffee notably higher in the Czech Republic (2023: 10.5%) and Slovakia (2023: 9.9%) compared to the CEE region’s average across all seven countries. Croatia, Slovenia, Serbia, and Bosnia maintain a ground coffee market share of less than 3% in 2023. The aggregated market share for ground coffee in the CEE region will continue to decline by 2027. On the other hand, whole bean coffee accounts for the majority of the Ho.Re.Ca coffee market and will expand market share to 93.5% by 2027. Additionally, the bakery & confectioner market segment (CEE aggregated average 2023: 7.4%) plays a substantial role in Hungary, Slovakia, and the Czech Republic, distinguishing them from the other CEE countries.

Julius Meinl Maintains a Strong Presence

Major players in the surveyed seven countries include Atlantic Grupa, Franck, Jacobs Douwe Egberts, Julius Meinl, and Lavazza. Julius Meinl maintains a strong presence across all seven countries, while Franck excels in Croatia, Slovenia, and Bosnia. The overall market analysis reveals a significant market share held by smaller players, indicating lower barriers in the Ho.Re.Ca segment compared to the retail sector, as explained by Laszlo Barla, the author of the study. Laszlo Barla remarked, “Our comprehensive analysis sheds light on the nuances of the Ho.Re.Ca coffee market in Central Eastern Europe. Understanding these dynamics is crucial for businesses aiming to navigate these diverse and evolving markets.”

The Ho.Re.Ca coffee market in Italy, Germany and Austria reached 94,315 tons in 2023, marking a 2.9% increase compared to the previous year. While Italy and Germany showcased continued recovery with moderate growth levels, Austria recorded a slight decline of 1.7% in 2023. The aggregated market’s value surged by 10.4% to 1.55 billion EUR in 2023, propelled by rising sales prices, as a recent study by Interconnection shows.

Highest Price Increase in Austria

Notably, Austria experienced the highest price increase among the three countries, with whole bean coffee prices surging by 18.4% between 2023 and 2021. Germany closely followed with a 16.8% increase, while Italy recorded a comparatively lower increase of 13.3%. The price for whole bean coffee is particularly relevant as the product has an aggregate market share of 86.1% (2023); however the dominance varies across the countries. The figures of the latest market report indicate distinct market dynamics in Italy, Germany, and Austria.

Italy’s Coffee Culture Is Different

Noteworthy country-specific differences include the higher market share of ground coffee in Germany (2023: 19.5%) and Austria (2023: 15.2%), in contrast to Italy (2023: 6.3%). The aggregated market share for ground coffee is 13.0% in 2023 but will continue to decline to 10.5% by 2027. Additionally, the bakery and confectioner market segment plays a significant role in Germany, constituting 14.8% of the Ho.Re.Ca market, while in Italy, it accounts for only 5.3%. In Italy, coffee in a bar is as much a part of life as pasta and Chianti.

Delayed Increase in Real Income as Market Driver

Looking ahead, the delayed increase in real income is expected to enhance purchasing power, providing a growth impetus for the Ho.Re.Ca coffee market in 2024. While above-average growth is not anticipated in the medium term, Interconnection predicts a compound annual growth of +2.6% annually in terms of quantity for the period 2023 to 2027. Laszlo Barla, Senior Market Analyst at Interconnection Consulting, commented on the findings, saying, “The insights from our report underscore the resilience of the Ho.Re.Ca coffee market in the face of economic challenges. Understanding the country-specific dynamics is crucial for businesses operating in these markets.”

When it comes to the market players, Italy is firmly in Italian hands with illycaffè, Lavazza, and Segafredo Zanetti, among others, although these players are also important in Austria and Germany, although there are also very important local players such as Dallmayr, Darboven, Melitta, Tchibo, which, however, do not play a relevant role in Italy. Julius Meinl has a strong presence in Austria.

Only a prolonged pandemic could have weakened demand for professional coffee machines, as worldwide out-of-home consumption of coffee had been on steady growth trend for the last 10 years in almost all the 16 regions covered by this global report. Lockdown measures and travel restrictions have severely impacted all customer segments, in particular hotels and restaurants, and the worldwide market declined in 2020 by ca. 20% in terms of new machines sold. Interconnection predicts that demand will resume soon and in the next 3 years the global market will grow by a yearly average of 5,6%.

Europe severely hit, but downfall experienced in all regions

In Europe all major markets (Benelux, France, Germany, Italy, Nordics, Spain, and UK) lost combined 23,0% in quantity. Interconnection detected a slightly better performance in Germany and Nordics, while, at the same time, countries like Italy, Spain, and France suffered the most.

Outside Europe demand fell less on average, around 14%, but still high if compared with their performance of the last 5 years. For example, the Chinese market, which had been growing on an average around 30% in the last 3 years declined due to the COVID crisis, despite overperfoming with a fall of -3,3% in quantity. Other best performers have been East and South-East Asia, where coffee consumption is becoming more popular especially among younger generation.

Higher growth for collective/ event catering expected after the crisis

Rapid expansion of coffee houses has been observed especially in less mature markets where coffee consumption is clearly associated with a less traditional, more cosmopolitan lifestyle. A growing segment until the pandemic, collective and event catering lost more than 30% in 2020 because of home office and cancellation of indoor events. However, this segment will start regain market shares in the next 3 years.

Strong demand for touchless solutions and cloud computing

All product types have been negatively affected by the crisis, but fully automatic performed better than  semiautomatic and reached 49,8% quantity shares in 2020. Interconnection predicts that both groups will start to recover in the next 3 years and regain the lost ground with an average growth of 6,0% and 5,2% respectively. Average prices are on the rise and are expected to grow further mainly because of technological innovation, in particular, cloud computing, remote control and touchless solutions. Among the major global players, there are Cimbali, Evoca Group, Franke and WMF.