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Retail Prices for Coffee are Steadily Rising

According to BusinesStat estimates, in 2006-2010 the sales of coffee increased by 57%, i.e. from 55 thousand tons to 86 thousand tons. The sales growth was conditioned by both the annual increase in the consumer share among the Russian population and the average per capita consumption of coffee. The general market trend is the share growth of real coffee toward instant coffee. In 2006, real coffee share of the sales volume accounted for 42%, and in 2010 real coffee share exceeded 50%. In the last years the growth of the real coffee sales was conditioned by the distribution of coffee machines, and the development of the fast food industry.

In 2006-2010, coffee production in Russia increased more than by 64%, i.e. from 33 thousand tons in 2006 to 54 thousand tons in 2010.  Since 2006 the top Russian coffee manufacturer at the federal level has been the Krasnodar Territory. Nestle Kuban, LLC, built in November of 2005, produce more than 99% of the total coffee volume produced in the Krasnodar Territory, and round 60% of the total coffee volume produced in Russia.

Retail prices for coffee are steadily rising.  In 2006-2010, the average prices increased by almost 65%, i.e. from 593 rubles per kilogram to 975 rubles per kilogram.  In 2008-2009, the market showed very rapid price appreciation.  The price rise is partly connected with the rising costs of the imported raw materials, but the most significant price boom was conditioned by the retail trade.  Along with the confectionery and alcoholic beverages coffee has become the product category, for which the shops are setting the maximal mark-on.

Retail Prices for Coffee Keep Going Up

According to BusinesStat estimates, during the period from 2005 to 2009 Russian coffee market saw a sharp rise in coffee sales (from 65 thousand tons to 113 thousand tons). The market growth was caused by the increase in both, the number of consumers and average per capita consumption. Besides, the recent spread of vending machines and development of fast-food industry have made their contribution to the hike of coffee sales, too.

Retail prices for coffee keep going up as well. During the period from 2005 to 2009 the average coffee price increased by 60% (from 546 roubles per kg to 906 roubles per kg). Prices for natural coffee are growing faster than for instant coffee. While from 2005 to 2009 the prices for instant coffee became only half as much again (from 320 roubles per kg to 467 roubles per kg), the prices for natural coffee almost doubled (from 638 roubles per kg to 1,119 roubles per kg).

In 2009 the coffee prices were simultaneously raised by 21.4%. By means of this price bulge retailers intended to make up for the common income reduction under the conditions of the crisis. Although there was no stagnation of demand for coffee in particular, and the release prices had not been raised significantly, retailers did so in order to compensate for the decline in sales revenue from other foods.