Resilient cafe culture signals future growth for Australia’s coffee shop industry

Posted by AFN Staff Writers on 29th May 2012

Australia’s resilient cafe culture will see the cafe and coffee shop industry experience sustained growth over the next five years, according to industry analysts from Australian market research company Ibisworld.

According to Ibisworld’s latest industry report, overall revenue is expected to grow by an annualised 2.6 per cent over the five years to 2016/17 to total AU$4.96 billion.

The forecast comes on the heels of separate research published earlier this year by Euromonitor. In March 2012, Euromonitor reported that Australia’s strong coffee culture assured an eight per cent current value growth and 4 per cent total volume growth in the Australian coffee industry in 2011.

According to Euromonitor’s research, coffee is currently the most-consumed hot drink in Australia, accounting for around 58 per cent of total volume and 64 per cent of off-trade value sales.

A love for gourmet coffee, which is entrenched in the daily routine of many Australian consumers, supported demand for the cafe and coffee shop industry during the recent global economic downturn, Ibisworld’s industry analyst Steven Connell said.

Mr Connell said, “During this period, revenue for the industry grew compared with rival hospitality industries such as restaurants and catering, which both experienced a consistent decline in revenue.

“While the economy will remain soft early in the next five years, consumer demand for high quality, convenient food and beverage offerings will underpin strong sales of coffee, pastries and meals,” Mr Connell added.

According to the Ibisworld report, growth is expected to strengthen later in the period as the economic outlook improves and trends, such as the ongoing increase in health consciousness and the rise of ethical consumer spending, bolster sales.

The report also suggested that, while the presence of international players and coffee shop franchises is expected to increase, the prevalence of small specialty operators and intense competition driven by the nation’s entrenched coffee culture are likely to remain the underlying tenets of the industry’s success and vibrancy.