Ethiopia Coffee Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023-2028)

The Ethiopian coffee market is projected to register a CAGR of 5.67% during the forecast period.

As a consequence of the COVID-19 pandemic, the Ethiopian government enforced strict lockdowns and followed social distancing norms. This resulted in the closure of restaurants, cafes, micro-roasters, and out-of-home outlets. Owing to this factor, the demand for coffee products such as instant coffee and ground coffee moved to off-trade, which resulted in enhanced coffee sales in the retail sector. The pandemic resulted in disruptions in import and export activities in Ethiopia. For instance, according to Ethiopian Monitor, in April 2020, the coffee trade on the Ethiopian Coffee Exchange (ECX) declined by 30% compared to the previous year.

Arabica coffee has its origin in Ethiopia. Ethiopia is the largest coffee producer in Africa and the fifth-largest producer in the world.

Ethiopians are among the largest coffee consumers in Africa, and the coffee consumption trend in Ethiopia is growing at a steady pace. Almost 50% of the country’s coffee production is consumed domestically.

Ethiopia Coffee Market Trends

Strong Production Base in the Country

In Ethiopia, Arabica coffee is mostly grown in the forest areas of the southwestern highlands of the Kaffa and Buno districts. In Ethiopia, coffee is cultivated across around 400,000 hectares of area. The country produces almost 200,000 metric ton of coffee every year. 95% of the coffee is produced in the forest area and is claimed to be organic. A major share of Ethiopian coffee is exported in green coffee beans form to the rest of the world. This factor gives a key advantage to Ethiopian coffee in the international market. According to the United States Department of Agriculture, the production of coffee increased from 7055 thousand 60 kg bags in 2017 to 7620 thousand 60 kg bags in 2021.

Rising Demand for Instant Coffee

The instant coffee segment held a significant market share due to its convenience as it is easily prepared compared to fresh coffee, thereby driving the instant coffee market. The haste lifestyles of consumers are aiding the market for convenient food. The distribution of the product is equipped by the majority of the retail channels. The instant coffee market is highly fragmented due to the presence of global players. Companies are competing with other companies through joint ventures, partnerships, and product launches to stay in the market. For instance, Nescafé Gold sachets were introduced in June 2019. The popular instant coffee brands in the region include Nescafe, Lavazza, Moccona, and Robert Timms. Online retailing has remained a minor distribution channel for instant coffee in Ethiopia for the past few years. However, it is likely to gain prominence in the market during the forecast period due to its convenience for consumers.

Ethiopia Coffee Market Competitor Analysis

The Ethiopian coffee market is fragmented and highly competitive, with the presence of local and global players operating across the country. Thus, in order to sustain their positions in the market, the active players are bringing innovations in packaging and product offerings to cater to consumers' increasing demand for coffee. Some of the key players in the Ethiopian coffee market are Cooper's Cask Coffee Company, Starbucks Corporation, Nestle SA, Klatch Coffee, and Kalbe International. Key players are now focusing on social media platforms and online marketing and branding of their products to attract more customers. Also, major players such as Starbucks have mainly focused on partnerships and collaborations with other emerging players and new product launches.

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• The market estimate (ME) sheet in Excel format
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