Newly released market study: Coffee in Lithuania

Rainfall in Brazil at the end of 2014 and the appreciation of the US dollar pushed raw coffee prices down in 2015. At the same time, more Lithuanian coffee sellers started to import raw coffee directly from the world’s largest coffee producers, and these imports were 30-35% cheaper than imports from Germany. The stabilisation of raw coffee prices, which had soared in 2014 due to severe drought in Brazil, allowed companies in Lithuania to restore their margins to 2013 levels. However, this did not protect companies from declining current value sales, as retail prices remained at 2014 levels due to continuous price wars between retailers, and consumers mainly bought coffee products during price-based promotions. Industry sources also attributed the poor performance of coffee in 2015 to Lithuania’s adoption of the euro at the start of the year. Many Lithuanians anticipated that this currency change would cause prices to rise, and therefore stocked up on coffee products in late 2014. Demand subsequently slumped in January 2015 and did not recover over the remainder of the year.

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Competitive Landscape

With an overall retail value share of 25%, Mondelez Lietuva Production UAB maintained its leading position in coffee in 2015. The company offers the Jacobs brand, which has a longstanding presence in Lithuania, benefits from strong promotional support and enjoys high levels of brand awareness and loyalty among local consumers. Jacobs is available in a wide range of presentations within standard fresh ground coffee, fresh ground coffee beans and instant coffee. Mondelez’s main competitor is Paulig Baltic AS, which ranked second in coffee in retail value sales terms in 2015 with an overall share of 17%. Aggressive discounting and strong marketing support enabled this company’s Paulig brand to overtake Jacobs and claim the leading position within fresh ground coffee in 2014.

Industry Prospects

Coffee in Lithuania is not expected to experience any major changes over the forecast period. The maturity of the category should ensure that retail volume sales growth remains quite stable overall. Any potentially negative impact that population decline might have on retail volume sales will be offset by the emergence of a new generation of young coffee drinkers, with the average age at which Lithuanians start to drink coffee expected to continue falling. At the same time, rising disposable incomes should continue to fuel a shift towards higher quality and more expensive coffee products, including premium variants, which will drive growth in retail value sales at constant 2015 prices.

Report Overview

Discover the latest market trends and uncover sources of future market growth for the Coffee industry in Lithuania with research from Euromonitor's team of in-country analysts.

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