Article | May 06, 2021
Coffee for all: the behavior of Peruvian households that consume coffee by 2020
Today soluble and ground coffee share the same table, and the type of coffee is chosen according to the occasion.
In 2018, The Nielsen Company revealed that the Peruvian buying behavior is judicious and conscientious. Therefore, the functionality of the product was what prevailed when buying a product considered "mass" food such as coffee. However, young millennials, between 25 and 40 years old, promoted the consumption of drinks based on ground coffee; mostly in cafeterias considered inclusive recreational spaces close to their study and work centers.
This was the result of a global trend in which these young people raised the standards of the coffee industry. Thus, as of 2019, the trend of segmentation by income level and by age in the coffee industry became similar in several countries, including Peru.
According to Kantar estimates, soluble coffee currently has a penetration of 75% and ground coffee 18% in Peru. Although soluble coffee is consumed more, ground coffee has more room to grow. In addition, its presentation has become more attractive for consumption at home since the policies to stay at home and avoid contracting Covid-19 were promoted.
The pandemic further boosted consumer purchasing behavior regarding ground coffee; the purchase frequency remained constant, but there was an 18% increase in the grams that were purchased each time. While, in the case of soluble coffee; the purchase frequency decreased and the grams that were purchased increased by 23%, less times but more volume per time. Both ground coffee and soluble coffee increased their purchase receipt value; by 26% and 23% respectively.
If we appreciate consumption by income level, we find that it is the households of NSE A, B and C, where the volume of ground coffee consumption in the country is concentrated, with a 79% share of the total volume consumed in it. category, while its share of the total volume consumed of soluble coffee is 64%. Coffee is an aspirational product, which as more availability becomes available, more presentations and formats can be accessed.
If we consider the age of the consumers; those who consume ground coffee the most are 55 years of age or older; They have decreased their consumption of soluble coffee by 8% and increased their consumption of ground coffee by 12% in the 2019-20 period. On the other hand, the youngest consumers, under 34 years of age, increased their consumption of ground coffee and soluble coffee; both at 7%.
Another interesting aspect is that the consumption of ground coffee is higher in the households of couples with children between 18 and 29 years old, that is, families with one or more income, these households alternate and complement their purchases of soluble coffee with ground and have a higher Willingness to pay for the product. The age range also shows that in Peru the consumption of coffee begins late, at the end of school or in higher education and is reinforced in adulthood.
Today the habit of drinking coffee has spread in the middle class and in different types of homes. In the current context, not only functionality is sought, but also experiences. For this reason, ground coffee has been added to the table, for occasions where you want to enjoy the flavor and aroma. Soluble coffee is still functional and practical; meets the need for caffeine, energy and takes seconds to prepare. The value that each coffee presentation has is defined by the consumer, who forms his preferences according to his own perception.
The segmentation of coffee consumers according to the characteristics of their home and purchasing behavior has shown that in most cases, soluble coffee and ground coffee share the same table; each presentation for a different purpose and time of consumption. The habit of drinking coffee is consolidating in the country. In most cases, it started with soluble coffee, and today it continues with local cosplay kostüme ground coffee. We must take advantage of this process in a strategic way, coffees coexist and are not replaced, each one has an opportunity in our day to day according to our pocket.
The challenge now is to make Peruvian coffee more accessible, as all Peruvians should have the opportunity to taste our coffee. In the coming weeks, information on the sales channels in different regions of the country for local brands will be published. With this initiative, the information on the progress made to prepare the National Plan for the Promotion of Coffee Consumption will be shared, which is part of the Alliance for Sustainable and Competitive Coffee project and is executed by the Peruvian Chamber of Coffee and Cacao and the National Coffee Board as part of the SeCompetitive Program of the SECO Swiss Cooperation, in collaboration with Helvetas Peru and the Swiss Embassy in Peru.
SeCompetitivo Program Facebook: https://www.facebook.com/SeCompetitivo/
Facebook of the Peruvian Chamber of Coffee and Cacao: https://www.facebook.com/camcafeperu
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Bibliography:
1) Nielsen The Company. is cited in Labra, C. 2018. Business plan for the commercialization of Peruvian coffees through an online platform in metropolitan Lima. Master's Thesis. ESAN. Graduate School of Business. Arequipa. 180 pp. Available at https://repositorio.esan.edu.pe/bitstream/handle/20.500.12640/1542/2018_MATP-ARE_14- 1_09_T.pdf?sequence=1
2) The typology of global consumption is detailed in Grabs, J. and Ponte, S. 2019.The Evolution of power in the global coffee and production network. Journal of Economic Geography. (19), 4: 803–828, https://doi.org/10.1093/jeg/lbz008
3) Penetration is defined as the% of households that bought (or won by sampling or gift) at least one product, segment, brand or item of the category, in the study period analyzed. Kantar World Panel. Consumption of Ground and Soluble Coffee in the Peruvian Home. 2018-2020
4) The frequency of purchase of ground coffee is a quarterly period; remained with an average purchase value of 3 times of ground coffee per quarter during the 2019-20 period.
5) The frequency of purchase of soluble coffee is a quarterly period; it decreased from an average value of 8 in 2019 to an average value of 7 times of purchase of soluble coffee in 2020.
6) The purchase ticket value results from the average of the quarterly values ??registered in a year. The period in which the increase was evaluated corresponds to 2019-20. For ground coffee this value increased from 7.35 to 9.28 soles. While, for soluble coffee it increased from 2.64 to 3.26 soles
7) In the homes of couples with children between 18 and 29 years old, 1016 grams of ground coffee are consumed in one year and in the homes of single people with children, 1031 grams of soluble coffee are consumed in one year. The estimates were made by adding the average quarterly consumption for the four quarters of 2020.
8) Increase in coffee consumption in Peru opens the doors to the arrival of new companies (agraria.pe)
9) Peru: Coffee purchase frequency increases | Peru Retail (peru-retail.com)
10) KANTAR WORLDPANEL: PERUVIAN FAMILIES INCREASE THEIR COFFEE CONSUMPTION (kronos365.com)
11) Increase in coffee consumption in Peru opens the doors to the arrival of new companies | ECONOMY | MANAGEMENT (gestion.pe)