South Africa is currently seeing an exponential rise in unemployment, our youth in particular. They have been born in the brunt of this crisis. The South African government put together a comprehensive plan which has specific interventions to reverse the current circumstances at hand. As coffeeholics, the question is “Can coffee be one of the those answers?”
Lets see if this article can help anyone considering putting their bag into the coffee market!
The global coffee market is expected to reach an estimated value of approximately US$460.0 billion in 2022, in terms of revenue, which represents a 12.2% increase over 2021, when the market reached approximately US$410.7 billion. The market is expected to grow at a compound annual growth rate of 5.3%, to reach a value of approximately US$560.1 billion by 2025. Coffee remains the most preferred global product of choice due to its consumption. The growth shift has moved from it being just a mere “morning fix” or “afternoon booster”, to its health benefits with more research pointing to its ability to prevent several diseases.
investing your money into the industry
In South Africa, the local coffee market experienced positive growth, in terms of off-trade retail value RSP at constant 2020 prices, achieving a 2.1% year-on-year growth relative to 2019. This increase is expected to continue, with the market forecast to grow at a CAGR of 2.5% between 2021 and 2025. This growth is being driven by many factors which includes the increase in at-home coffee consumption.
Large Corporates and Coffee Retailers
The major players in the South African market have been expanding their ranges to include instant coffee sachet products. Thus catering to the demand for a variety of these products. Many companies are now offering vegan instant coffee sachets, making these products more accessible to a wider range of consumers.
Nescafe has introduced new variants of its popular sachets with the new vegan options. Major retailers like Woolworths have included instant lattes and cappuccinos, as well as vegan and non-vegan instant coffee products. Coffee Shops
South Africa has produced exceptional brands such as Vida e Caffé and
Mugg & Bean. They have tested international brands such as Starbucks through their strong marketing campaigns and more importantly, exceptional coffee. Vida e Caffé opened its first store on Kloof Street, Cape Town, in October 2001 as a reaction to the inspired coffee shop culture prevalent in South Africa at the time. It has grown to more than 160 outlets nationwide. Mugg & Bean started in the early 90s when Ben Filmalter and his wife Judi took a trip to Chicago. There they discovered a unique little cafe that prided itself on its spirit of generosity. This inspired Ben to come back home and open the first Mugg & Bean in 1996 at the V&A Waterfront in Cape Town.
These two brands have created a strong identity, showing that there are still opportunities for growth due to the consumption market in South Africa. There are ever growing retail space with the many malls being constructed around the country. Some companies have gone for a small coffee bar inside the forecourt, such as
Seattle Coffee Co inside Caltex and Vida e Caffé inside Shell. Roasters
You can’t have coffee without coffee beans, and to get coffee beans you need a roaster. South Africa had less than 20 roasteries ten years ago in comparison to the just over 100 today.
As with fashion, coffee also has its trends. Single origin coffee is harvested from a singe crop, country or region and carries its own unique flavour notes. Today’s coffee consumer cares about ethical procurement, unique flavour experiences, tourism, and sustainability. Tracing beans back to their grower allows you to confirm that they are fair trade, sustainable, and organic. Certain parts of the South African market are biting at sustainability. Coffee brands are expected to make a boom in sales.
In conclusion, we can see that this caffienated bean most definitely remains an attractive market for new investors and South Africa needs you.
Try reading our
Coffee Shop Guide if we’ve intrigued you enough to start your own shop.