The parent chain Coffee Island will debut in the Indian market with a store in Delhi next month, ahead of (!) even Nestle, which is preparing to open the first Nespresso boutique in the Indian capital and then expand to other major cities of India.
The truth is that Coffee Island is currently the first European coffee company to enter this vast market where in recent years, the consumption of the beloved beverage has seen an explosion, but with a clear trend towards home consumption.
Coffee Island built a factory in Egypt
At the same time, Coffee Island’s international footprint is being strengthened on the African continent, specifically in Egypt, a market in which the Greek company, in addition to commercial activity with 5 stores, now also has a production base.
In particular, through a joint venture (30% participation), a new production unit became operational just one month earlier exclusively for the market in question, meeting the needs of its local stores, while there is the possibility of expansion depending on the needs that will be created.
As Konstantinos Konstantinopoulos, CEO of the company, explained at a special event on Coffee Island’s ESG strategy, the Egyptian market has dynamic characteristics (110 million population with a low average age) and significant prospects.
He noted, however, that production will not be transferred from the Patras unit, which he said is now an international raw coffee management hub, processing over 1,800 tons per year.
At the same time, the company has signed a master franchise and will start development in France in 2025.
At 37 million euros, the turnover with rationalization of the network
In terms of size, the growth for Coffee Island is estimated at around 8% for 2024 until now, at the same levels as last year, when sales amounted to 36.9 million euros.
For this year the goal is to rationalize the network and to correct movements through collaborations that had exceeded ten years.
“We don’t want to cannibalize the network, we are the biggest chain, we are not the first in number in Athens or Thessaloniki, we are the first in Patras,” said Mr. Konstantinopoulos, among other things, adding that “we don’t want the 430 stores to become 630, we want as much as possible to increase the quality of our services and products and not the number”.
It is worth noting that now 170,000 customers are served daily through the Coffee Island network, by 3,500 employees in 430 locations and 100 cities internationally.
Appreciations and challenges
Commenting on the course of the market, Mr. Konstantinopoulos spoke about the serious consequences that have come from the pandemic and then on the industry and the huge price hikes in raw materials (60% on average, even 100% in some cases).
“The industry is currently struggling to a huge degree. We always try to create a big wall between what happens in reality and our stores as it is a professional and ethical obligation, to pass as little markups as possible to our partners and by extension to consumers. The problem that Greece has in focus in relation to purchasing power are very little value, but the consumer cannot pay for them. The markups are around 20 cents per drink including VAT and special tax. In wholesale, the increases have been a little less than 10%”, he noted.
Finally, he sounded the alarm for significant price increases in the final price if the EU “passes” a relevant directive obliging the provision of evidence of non-deforestation in every coffee import, as many markets – suppliers are expected to be “blocked”, not because of non-compliance quality of products and practices based on sustainability but from the lack of relevant structures in the market and certificates.
Source: ot.gr
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