Prices continue to decrease28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 2001 2002 2003 2004year US...
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1 2 nd World Coffee Conference, Bahia 23 - 25 September 2005 Lesson emerging from the crisis : New paths for the coffee sector Session 2 : Coffee policies in a market economy Giuseppe Lavazza Average prices paid to growers in Average prices paid to growers in selected countries selected countries VS VS ICO ICO Robustas Robustas Indicator Prices Indicator Prices 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 2001 2002 2003 2004 year US cents/lb Uganda Robusta Indicator prices Brazil rob. India rob. Vietnam Cote d'Ivoire Source : Intl Coffee Org. Average prices paid to growers in Average prices paid to growers in selected countries selected countries VS VS ICO Other Milds Indicator Prices ICO Other Milds Indicator Prices 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 2001 2002 2003 2004 year US cents/lb Other Milds Indicator Prices Kenya Colombia India Brazil nat. Ethiopia El Salvador Tanzania Source : Intl Coffee Org. Coffee Production of selected countries Coffee Production of selected countries as % of Total as % of Total 1989 1990 1996 1997 2001 2002 2003 2004 Brazil 26,08 % 29,28 % 28,27 % 26,37 % 28,81 % 39,76 % 27,78 % 34,19 % Colombia 13,73 % 15,25 % 10,51 % 12,30 % 11,25 % 9,75 % 10,69 % 10,17 % Costa Rica 2,44 % 2,75 % 2,06 % 2,52 % 2,03 % 1,59 % 1,74 % 1,69 % Cote d'Ivoire 5,10 % 3,15 % 4,70 % 4,19 % 3,37 % 2,58 % 2,59 % 1,72 % Ethiopia 3,65 % 3,12 % 3,16 % 2,94 % 3,52 % 3,03 % 3,73 % 4,42 % Guatemala 3,69 % 3,51 % 4,37 % 4,25 % 3,44 % 3,34 % 3,48 % 3,05 % India 1,90 % 3,03 % 3,19 % 4,68% 4,66 % 3,83 % 4,33 % 4,29 % Indonesia 7,31 % 7,97 % 7,46 % 7,55 % 6,41% 5,56 % 6,23 % 5,74 % Mexico 5,37 % 5,01 % 4,94 % 4,84 % 3,94 % 3,28 % 4,39 % 3,42 % Uganda 2,06 % 2,09 % 4,15 % 2,57 % 2,97 % 2,38 % 2,42 % 2,43 % Vietnam 1,07 % 1,49 % 5,51 % 6,96 % 12,31 % 9,48 % 14,68 % 11,05 % Source : Intl Coffee Org. Competitive advantages as function of : Production costs and Productivity Quality standard Commercial performance The European* coffee market: The European* coffee market: Segments weight Segments weight Y.e. AM05 Y.e. AM04 Y.e. AM03 mio Euro tons mio Euro tons mio Euro tons Total coffee** 7.601 939.796 7.521 933.698 7.668 940.658 R&G 69.8% 85.0% 70.0% 85.8% 70.5% 86.5% regular 55.7% 56.2% 56.8% light*** 2.0% 2.2% 2.1% dec 6.5% 6.6% 6.7% espr 5.6% 5.1% 4.8% Soluble**** 30.2% 15.0% 30.0% 14.2% 29.5% 13.5% *Euro 11: B,D,CH,DK,ES,F,GK,IRL,I,NL,UK ** Excluded Greek coffee: (0,8 Weight in Value) ***Excluded CH ****Excluded Spain Source : ACNielsen
Transcript of Prices continue to decrease28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 2001 2002 2003 2004year US...
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2nd World Coffee Conference,Bahia 23 - 25 September 2005
Lesson emerging from the crisis : New paths for the coffee sector
Session 2 : Coffee policies in a market economy
Giuseppe Lavazza
Average prices paid to growers in Average prices paid to growers in selected countries selected countries
VSVSICOICO RobustasRobustas Indicator PricesIndicator Prices
02468
101214161820222426283032343638404244464850525456
2001 2002 2003 2004year
US
cent
s/lb
Uganda
RobustaIndicatorprices
Brazil rob.
India rob.
Vietnam
Cote d'Ivoire
Source : Intl Coffee Org.
Average prices paid to growers in Average prices paid to growers in selected countries selected countries
VSVSICO Other Milds Indicator PricesICO Other Milds Indicator Prices
12141618202224262830323436384042444648505254565860626466687072747678808284
2001 2002 2003 2004year
US
cent
s/lb
Other MildsIndicatorPricesKenya
Colombia
India
Brazil nat.
Ethiopia
El Salvador
Tanzania
Source : Intl Coffee Org.
Coffee Production of selected countries Coffee Production of selected countries
as % of Totalas % of Total
1989 1990 1996 1997 2001 2002 2003 2004
Brazil 26,08 % 29,28 % 28,27 % 26,37 % 28,81 % 39,76 % 27,78 % 34,19 %
Colombia 13,73 % 15,25 % 10,51 % 12,30 % 11,25 % 9,75 % 10,69 % 10,17 %
Costa Rica 2,44 % 2,75 % 2,06 % 2,52 % 2,03 % 1,59 % 1,74 % 1,69 %
Cote d'Ivoire 5,10 % 3,15 % 4,70 % 4,19 % 3,37 % 2,58 % 2,59 % 1,72 %
Ethiopia 3,65 % 3,12 % 3,16 % 2,94 % 3,52 % 3,03 % 3,73 % 4,42 %
Guatemala 3,69 % 3,51 % 4,37 % 4,25 % 3,44 % 3,34 % 3,48 % 3,05 %
India 1,90 % 3,03 % 3,19 % 4,68% 4,66 % 3,83 % 4,33 % 4,29 %
Indonesia 7,31 % 7,97 % 7,46 % 7,55 % 6,41% 5,56 % 6,23 % 5,74 %
Mexico 5,37 % 5,01 % 4,94 % 4,84 % 3,94 % 3,28 % 4,39 % 3,42 %
Uganda 2,06 % 2,09 % 4,15 % 2,57 % 2,97 % 2,38 % 2,42 % 2,43 %
Vietnam 1,07 % 1,49 % 5,51 % 6,96 % 12,31 % 9,48 % 14,68 % 11,05 %
Source : Intl Coffee Org.
Competitive advantages as function of :
Production costs and Productivity
Quality standard
Commercial performance
The European* coffee market: The European* coffee market: Segments weight Segments weight
Y.e. AM05 Y.e. AM04 Y.e. AM03
mio Euro tons mio Euro tons mio Euro tons
Total coffee** 7.601 939.796 7.521 933.698 7.668 940.658
R&G 69.8% 85.0% 70.0% 85.8% 70.5% 86.5%
regular 55.7% 56.2% 56.8%
light*** 2.0% 2.2% 2.1%
dec 6.5% 6.6% 6.7%
espr 5.6% 5.1% 4.8%
Soluble**** 30.2% 15.0% 30.0% 14.2% 29.5% 13.5%
*Euro 11: B,D,CH,DK,ES,F,GK,IRL,I,NL,UK** Excluded Greek coffee: (0,8 Weight in Value) ***Excluded CH ****Excluded Spain
Source : ACNielsen
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The European* coffee market: The European* coffee market: Segments Segments Trend Trend
(vs previous year)(vs previous year)
Y.e. AM05 Y.e. AM04
mio Euro tons mio Euro tons
Total coffee** 1.1% +0.6% -1.9% -1.8%
R&G 0.7% -0.4% -2.6% - 2.6%
regular 0.3% -3.0%
light*** - 8.4% -0.0%
dec - 0.5% -4.2%
espr +11.1% +4.6%
Soluble**** +2.0% + 7.0% -0.3% +3.2%
*Euro 11: B, CH,D,DK,ES,F,GK,IRL,I,NL,UK** Excluded Greek coffee: (0,7 Weight in Value) ***Excluded CH ****Excluded Spain
Source : ACNielsen
FRANCE : FRANCE :
Coffee Market decreasing in volumeCoffee Market decreasing in volume
1170
10601097
1130
105110651043103310421049
950
1000
1050
1100
1150
1200
1995 1996 1997 1998 1999 2000 2001 2002 MATJULY 03
MATJULY 04
VALUE SALES (Million €uros)
166 168
160 159156 155 153 151 150 144
135140145150155160165170
1995 1996 1997 1998 1999 2000 2001 2002 MATJULY 03
MAT
VOLUME SALES (THOUSANDS TONS)
JULY 034
- 3.3%
+1.0%
Roasted coffee is still decreasing in volume but experiencing a new trend in value sales.
FRANCE : Hard DiscountFRANCE : Hard Discount
Only Hard Discounters are more dynamic during the 2 last years, taking profit from the beginning of Euro in France…
2.32.6
2.9 3.02.6
2.1
3.4
2.0 2.22.4
2.01.7
1.2
3.6
4.2 4.2
1.7 1.72.0 2.0 1.9 2.0
6.0 6.0
-1.0 -1.0
1.8
3.02.7 2.5
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
1998 1999 2000 2001 2002 2003
Total France Hypermarchés ( > 2500m2 )Supermarchés( 400-2500m2 ) Hard DiscountersStores
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3
PROMOTIONAL INTENSITY INDEXPROMOTIONAL INTENSITY INDEX
3 7,5
4 0 ,4
3 9 3 9 3 9
3 7,1
3 8 ,9
3 5,9
3 8 ,9
4 3 ,6
4 2 ,54 3
3 8 ,3
4 3 ,7
4 4 ,6
4 1,7
4 3 ,3
4 1,4
4 3 ,6
3 9
4 4 ,3
4 2 ,7
4 0 ,3
4 3 ,7
4 0 ,3
4 2 ,2
4 3 ,9
3 7,93 7,6
3 7,3
4 0 ,9
35,0
37,0
39,0
41,0
43,0
45,0
47,0
gen-03 mar-03 mag-03 lug-03 set -03 nov-03 gen-04 mar-04 mag-04 lug-04 set -04 nov-04 gen-05 mar-05 mag-05 lug-05
ITALYSource: Nielsen
PROMOTIONAL INTENSITY INDEXPROMOTIONAL INTENSITY INDEX
Source: Nielsen
32,332,4
31,4
32,3
30,8
30
35,9
35,2
33,4
31,5
32,4
31
31,7
32,5
29,7
28,8
30,5
29,3
27,2
35,7
33,1
32
33,3
34
32,5
34,5
30,3
29,7
33,633,4
32,7
25,0
27,0
29,0
31,0
33,0
35,0
37,0
gen-03 mar-03 mag-03 lug-03 set -03 nov-03 gen-04 mar-04 mag-04 lug-04 set -04 nov-04 gen-05 mar-05 mag-05 lug-05
FRANCE
ITALY ITALY –– Sales Sales ––Total GroceryTotal Grocery
Value changes Value changes vsvs previous yearsprevious years
Souce: ACNielsen Trade*Mis
-3,0
-1,0
1,0
3,0
5,0
7,0
9,0
11,0
13,0
15,0
gen-02 giu-02 ott-02 feb-03 lug-03 nov-03 mar-04 lug-04 nov-04 mar-05
2002:+6.3 %2003:+7.7 %
2004:+1.6 %
2004
20032002
2005:+2.1%
a.t.apr05
ITALY ITALY –– Variation of price scale Variation of price scale Total Grocery Total Grocery
% share on price index range% share on price index range
7,4 8,1
14,6 14,7
19,1 18,3
21,4 20,7
12,0 12,0
6,6 6,4
11,5 12,0
7,87,3
2003 2004
Source: ACNielsen Trade*Mis –* 100= media categoria
8,2
15,5
18,1
20
11,7
6,4
12,1
7,9
Progressivo MAG2005
> 140
126 - 140
111 - 125
96 - 110
81 - 95
66 - 80
51 - 65
< 50
Total share of products with prices 20% below average 29.3% 32.5%
GERMANY: Consumers and PriceGERMANY: Consumers and Price
Source: ACNielsen Haushaltspanel 2003
49
43
42
87
89
92
69
62
60
„buying food I look out for pricepromotions.“
„quality of brands higher than that of private labels.“
„I accept higher prices for higher quality “
Share of agreeing households in %
2001
2002
2003
2001
2002
2003
Countries of origin 2003 2004Brazil 30,63 27,19Vietnam 13,21 18,59Columbia 11,08 8,74Indonesia 6,88 6,50Peru 5,21 5,74Honduras 4,26 4,90Ethiopia 4,16 4,58Papua New Guinea 4,31 3,47El Salvador 2,33 3,11India 1,86 1,89Guatemala 2,45 1,71Kenya 1,84 1,67Uganda 1,85 1,61Costa Rica 1,80 1,56Mexico 1,27 1,42Nicaragua 0,62 0,96Tanzania 1,75 0,96Rwanda 0,29 0,76Burundi 0,69 0,76China 0,61 0,74Others 2,90 3,14
Total 100,00 100,00
Source: Statistisches Bundesamt
- in % -Green coffee net imports by main sources
Percentage distribution of not-decaffeinatedFederal Republic of Germany
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Countries of origin 2003 2004Vietnam 25,5 34,2Brazil 20,3 20,7Colombia 14,2 11,8Indonesia 13,1 8,4Peru 3,8 4,4Nicaragua 3,7 3,9Honduras 4,0 3,8Kenya 3,0 3,0El Salvador 1,5 1,6Ethiopia 1,0 1,5Costa Rica 1,6 1,3India 0,6 0,9Uganda 1,4 0,9Guatemala 1,8 0,9Mexico 1,6 0,4Tanzania 0,2 0,3Papua New Guinea 0,3 0,2Others 1,8 1,8
Total 100,0 100,0
Source: Coffee Trade Federation Ltd
United KingdomPercentage distribution of green coffeenon-decaffeinated imports by main origin
- in % -Year Eur/500 gr1970 4,241975 4,101980 4,941985 5,461990 3,701991 3,571992 3,551993 3,431994 3,821995 4,081996 3,581997 3,971998 4,021999 3,562000 3,432001 3,272002 3,062003 3,002004 2,91
average consumer price of not-decaffeinated roasted coffee
Source: German Coffee Association
Federal Republic of Germany:Retail prices of roasted coffee 1970-2004
Year SEK/kg1993 44,081994 64,001995 76,201996 58,601997 73,401998 77,201999 63,802000 61,002001 57,602002 54,602003 52,302004 49,90
Source: Statistics Sw eden
1993 - 2004Sweden: Retail prices roasted ground coffee
ConsumptionConsumption MacrotrendsMacrotrends in Italyin ItalyIndex 1985=100Index 1985=100
85
95
105
115
125
135
145
155
165
175
1985
1990
1995
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Food Non Food
1.80.4
2009
1.50.4
2008
1.60.5
2007
1.81.31.61.1-0.10.73.32.93.53.51.22.93.0-2.91.53.32.2Non Food0.5-0.1-1.10.40.70.52.00.00.81.6-0.8-1.6-1.2-1.30.40.71.1Food
20062005200420032002200120001999199819971996199519941993199219911990var%
Source:Istat, elaborazioni ACNielsen
Relative PriceRelative Price MacrotrendsMacrotrends in Italyin ItalyIndex 1985=100Index 1985=100
80
85
90
95
100
105
110
1985
1990
1995
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Food Non Food
2.31.9
2009
2.21.3
2008
2.31.8
2007
2.02.32.22.63.12.62.92.32.32.64.65.95.15.85.97.36.7Non Food1.21.12.92.73.43.91.60.80.9-0.14.46.03.91.64.85.95.8Food
20062005200420032002200120001999199819971996199519941993199219911990var% prezzi
Source :Istat, elaborazioni ACNielsen
European Roast & Ground coffee: European Roast & Ground coffee: competitors value shares competitors value shares
Euro 11*Euro 11*
Y.e. AM05 Y.e. AM04 Y.e. AM03 Total Roast & ground 100.0% 100.0% 100.0%
5.302 mio 5.267 mio 5.407 mio
KJS 21.2% 22.1% 22.5%Private Label (Inc.Aldi+Migros) 19.5% 19.3% 19.2% Sara Lee 13.8% 13.6% 13.2%Lavazza 9.6% 9.8% 9.9%Tchibo 6.9% 7.0% 7.0%Nestlè 4.7% 4. 6% 4.6%Melitta 4.1% 4.3% 4.5%Segafredo 1.7% 1.9% 2.0%
*B,CH,D,DK,ES,F,GK,IRL,I,NL,UK Source : ACNielsen
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PODS IN EUROPE (I, F, D, UK, A, CH) PODS IN EUROPE (I, F, D, UK, A, CH)
RETAIL:
0
50.000
100.000
150.000
200.000
250.000
2004 2005
Values (€x1.000)
0
2.000
4.000
6.000
8.000
10.000
12.000
2004 2005
Volumes (Tons)
+83%
Source: Nielsen
Macro Area Total Coffee Market Tons Macro Area Total Coffee Market Tons 20042004
11,0%
1,0%
6,8%
36,2%
7,8%
18,8%
18,5%
Asia Pacific
Australasia
Africa and MiddleEastWestern Europe
Eastern Europe
North America
Latin America
Source: Internal Analisys on IMIS Euromonitor data
Source: Internal Analisys
95
100
105
110
115
120
125
130
135
140
145
150
155
160
165
170
175
180
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Years
Inde
x
Africa Mid. East 62 %
Latin America 30 %
Macro Area Retail Market (1)Macro Area Retail Market (1)
95
100
105
110
115
120
125
130
135
140
145
150
155
160
165
170
175
180
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Years
Inde
x
Asia Pacific 61 %
Australasia 29 %
Source: Internal Analisys
Macro Area Retail Market (2)Macro Area Retail Market (2)
Macro Area Retail Market (3)Macro Area Retail Market (3)
95
100
105
110
115
120
125
130
135
140
145
150
155
160
165
170
175
180
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Years
Inde
x
North America 36 %
Eastern Europe 38 %
Western Europe 3 %
Source: Internal Analisys
U.K. Coffee Shops Growth TrendU.K. Coffee Shops Growth Trend
233
419
557
914
1226
1395
1527
1681
1907
2150
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2200
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Years
Out
let n
umbe
r
U.K.
-
6
95
100
105
110
115
120
125
130
135
140
145
150
155
160
165
170
175
180
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Years
Inde
x
North America 69 %
Eastern Europe 70 %
Western Europe 26 %
Source: Internal Analisys
Macro Area A.F.H. Market (1)Macro Area A.F.H. Market (1)
95
100
105
110
115
120
125
130
135
140
145
150
155
160
165
170
175
180
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Years
Inde
x
Asia Pacific 55 %
Australasia 76 %
Source: Internal Analisys
Macro Area A.F.H. Market (2)Macro Area A.F.H. Market (2)
95
100
105
110
115
120
125
130
135
140
145
150
155
160
165
170
175
180
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Years
Inde
x
Africa Mid. East 33 %
Latin America 39 %
Source: Internal Analisys
Macro Area A.F.H. Market (3)Macro Area A.F.H. Market (3)
Product innovation
Market with growth potential
New segments (in mature markets)
Attract young consumers
Thanks for your attention
Giuseppe Lavazza Giuseppe Lavazza
