Hot drinks in France
(Source: Euromonitor.com) 2005

Fundamental changes in consumption habits

Even though climatic conditions were less dramatic than during the legendary heat wave of 2003, the overall trend for the French hot drinks market in 2004 was that of stagnation and maturity. Such maturity proved difficult to fight since it comes from fundamental changes in consumption habits.Wafer coffee systems helps boost stagnating market

The future of hot drinks in France will depend on the success of new launches and levels of consumer confidence during the forecast period. The successful launch of Senseo (wafer coffee system) in 2001 gave fresh impetus to fresh ground coffee. The 2004 launch of Tassimo systems by Kraft was expected to bring further dynamism back to the hotdrinks market as a whole, as this machine can be used for the preparation of coffee, tea and hot chocolate. Increased interest in fair trade concept In 2004 fair trade and organic coffee was still dominated by smaller manufactures, all carrying the Max Havelaar fair trade label. Two of these, Meo and Malongo, showed remarkable results in 2004, given the difficult market conditions, with formerhaving recruited 130,000 households over the past year. Organic coffee manufacturers attempted to gain volume shares by focusing on premium products in order to differentiate their products from large and well-established manufacturers. Consequently, they often lack extensive national coverage, which constrains their growth. Private label, such as Monoprix and Auchan, are also increasingly present inorganic coffee. Industry professionals highlight the strong potential for growth in organic products as they are mainly premium and high priced, and are therefore likely to benefit from the general trend towards quality hot drinks over quantity.

Kraft Foods France maintains leadership

Most companies involved in the French hot drinks market are subsidiaries of multinationals. Kraft FoodsFrance continued to lead overall hot drinks in 2004, thanks to its leadership of the key beverage, coffee. Kraft maintained its ranking as first and second respectively in fresh and instant coffee in 2004, although its closest fresh coffee competitor Douwe Egberts gained share in the same year, helped by the performance of Senseo.

With respect to instant coffee, Nestlé’s Nescafé remained by far andaway the leading brand, unchallenged by Maxwell House, the second ranked brand in 2004. Unilever and Nestlé continued to lead sales of tea and other hot drinks respectively in 2004, with neither multinational seeing its position come under threat.

Tea manufacturers are the most innovative

New product developments were the key to tea’s dynamism in 2004, providing the most important part ofinnovations among overall hot drinks. Green tea became the most popular type of tea, as most new products have been flavoured green tea versions. Within coffee, in spite of sales of wafer coffee systems expanding in 2004, fresh coffee types remained the most buoyant in terms of new product developments. Other hot drinks manufacturers opted for an increased sophistication of traditional brands inorder to rejuvenate coffee’s image

Hot drinks in France
(Source: Euromonitor.com) 2006

Profound changes in consumption habits confirmed in 2005 France, a coffee drinking nation, seems to be beginning to swap its traditional favourite for a healthier variant, tea. The overall hot drinks market is mature, with volume sales of both coffee and other hot drinks stagnant or declining in 2005,while tea sales increased both in volume and value terms. Innovation in the form of coffee pods is the hope for coffee The coffee pods revolution is driving coffee sales. Although coffee pods were launched only relatively recently, their dynamism has rejuvenated fresh ground coffee sales and stimulated new marketing activity. Alongside this coffee innovation, the expansion of coffee bars has been…