Research Paper –Europe Coffee Industry Assignment 5-2 Prepared for Professor Harold Bashor MBA 727-F3FF International Business Management October 24th, 2012 Prepared by IRELAND Coffee is a very important product in Ireland. Specialty coffee shops such as Starbucks and other local companies such as Insomnia have helped create strong growth in the industry. From a competition standpoint, Nestle’ continues to dominate the industry in Ireland with a 42% market share in 2011 (www. Euromonitor. om, 2012). “Nestle’ has managed to maintain its leadership due to its exposure within the fast growing coffee pods area and its widespread offering of price and volume promotions (www. Euromonitor. com, 2012)”. The two domestic players in the industry are Bewley’s and Robert Roberts. Both increased sales shares in 2011, 9% and 5% respectively. The primary market for each of these companies is fresh coffee. The economic downturn in 2008 has hurt the industry as consumers have cut back spending.
A 40% increase in the composite price of coffee from the International Coffee Organization in 2011 also hurt demand. The price increases are similar to those seen in many commodity prices. Coffee in particular is facing an increasing demand while supply in 2011 was slowed by a poor Colombian harvest, heavy rains, and issues in Brazil. As you can see from the chart below, the coffee industry in Ireland is very dependent on imports with nearly 90% of it coming from other European countries.
This table illustrates the high percentage finished coffee imports into Ireland. Expressed in green coffee equivalent, 2010 green coffee imports were only 42% of the volume of the finished product imports (roasted + soluble). Total coffee imports of all forms into Ireland increased from 8. 746 tons green coffee equivalent in 2009 to 9. 780 tons in 20109 (+11,8%). The vast majority of Ireland’s soluble coffee imports (almost 88% in 2010) came from the United Kingdom.
The Netherlands (6,7%) and Poland (2,8) supplied most of the remainder. In 2010 the UK represented 68% of Ireland’s roasted coffee imports. The second largest supplier – at a considerable distance – was Germany (20% in 2010). COFFEE CONSUMPTION Reference List Hill, C. (2011). International Business: Competing in the Global Marketplace, pg. 49. World Coffee Trade Chart. Retrieved 10/20/12 from http://www. ico. org/trade_e. asp Coffee in Ireland. Retrieved 10/21/12 from http://www. euromonitor. com/coffee-in-ireland/report