Coffee in Peru

Euromonitor International
December 2019
COFFEE IN PERU Passport i

LIST OF CONTENTS AND TABLES

Headlines ..................................................................................................................................... 1
Prospects ..................................................................................................................................... 1
Emerging Modern Lifestyles Positive for Foodservice Sales of Coffee ..................................... 1
Social Media Usage Spurs Foodservice Sales Growth ............................................................. 1
El Niño Continues To Influence Local Coffee Cultivation and Consumption ............................. 1
Global Coffee Prices Continue To Decline ............................................................................... 2
Competitive Landscape ................................................................................................................ 2
Nestlé Peru Relies on Investment in Advertising To Maintain Category Leadership ................ 2
Exportadora Romex Maintains Its Position As the Leading Local Player .................................. 2
Brazilian Brand Melitta Becomes Available in Peruvian Supermarkets .................................... 2
Category Data .............................................................................................................................. 3
Table 1 Retail Sales of Coffee by Category: Volume 2014-2019 .............................. 3
Table 2 Retail Sales of Coffee by Category: Value 2014-2019 ................................. 3
Table 3 Retail Sales of Coffee by Category: % Volume Growth 2014-2019 ............. 4
Table 4 Retail Sales of Coffee by Category: % Value Growth 2014-2019 ................ 4
Table 5 Retail Sales of Fresh Ground Coffee Pods by Hard vs Soft: % Volume
2014-2019 .................................................................................................... 4
Table 6 NBO Company Shares of Coffee: % Retail Value 2015-2019 ...................... 5
Table 7 LBN Brand Shares of Coffee: % Retail Value 2016-2019 ............................ 5
Table 8 Forecast Retail Sales of Coffee by Category: Volume 2019-2024 ............... 6
Table 9 Forecast Retail Sales of Coffee by Category: Value 2019-2024 .................. 6
Table 10 Forecast Retail Sales of Coffee by Category: % Volume Growth 2019-
2024 ............................................................................................................. 7
Table 11 Forecast Retail Sales of Coffee by Category: % Value Growth 2019-
2024 ............................................................................................................. 7

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COFFEE IN PERU Passport 1

COFFEE IN PERU
HEADLINES
▪ Coffee registers retail volume growth of 7% and value growth of 6% in current terms in 2019
as sales reach 5,500 tonnes and PEN597 million respectively
▪ Emerging lifestyle trends are positive for sales of coffee, with consumers becoming
increasingly demanding and more sophisticated in their tastes
▪ Relatively slow growth is recorded in coffee in foodservice volume terms in 2019 as sales rise
by 5% to reach 526 tonnes
▪ Nestlé Perú SA remains the leading name in coffee in 2019 with a value share of 46%, with
Altomayo Perú SAC holding second spot with a 25% value share
▪ Over the forecast period, coffee is slated for a current value CAGR of 10% (7% at constant
2019 prices)

PROSPECTS

Emerging Modern Lifestyles Positive for Foodservice Sales of Coffee

Peruvian society is developing and affluent professionals living in the country’s major cities
are increasingly interested in high-quality fresh coffee. In particular, emerging lifestyle trends are
stimulating growth in foodservice volume sales of fresh coffee. With incomes on the rise and the
faster pace of life placing pressure on people’s time, increasing numbers of Peruvians are
consuming more fresh coffee outside of the home. One major issue faced by many urban
consumers on a daily basis is heavy traffic, with those who commute by car often having little
time to prepare breakfast, with many drinking coffee as part of a daily foodservice breakfast
ritual. It is also becoming increasingly common for Peruvian office workers to drink take away
coffee at their desks when they arrive for work in the morning.

Social Media Usage Spurs Foodservice Sales Growth

Greater purchasing power among Peru’s urban middle class has led many to engage in a
search for “experiences” that they can share via their social media. Among the experiences that
are most commonly shared are spending time enjoying high-quality espresso coffee beverages
in high-end specialist coffee shops. This trend is also linked to growth in the numbers of both
chained and independent specialist coffee shops, which has benefited the sales of local brands
that offer high-quality fresh coffee. A common example is Starbucks, but strongly emerging local
players include Puku Puku Café, the operator of four coffee shops already. This situation is also
likely to prove positive for retail sales of coffee as it makes it far more likely that consumers will
want to replicate the premium foodservice fresh coffee experience at home.

El Niño Continues To Influence Local Coffee Cultivation and

Consumption
The El Niño phenomenon continue to affect Peru’s climate in 2019, although not as intensely
as in 2018 or 2017. Similarly, the positive impact of the climatic phenomenon on coffee
cultivation, production and consumption has not been as marked during 2019 as it was during
the previous 12 months. Indeed, medium-term forecasts are now pointing to neutral to warm
conditions for the coming year. This emerging situation has the potential to suppress local

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coffee cultivation during 2020. However, colder temperatures are likely to mean stronger
demand for hot drinks in general, including coffee, with the receding influence of El Niño thus
likely to be positive for sales growth in the category during the early stages of the forecast
period.

Global Coffee Prices Continue To Decline

The ongoing, long-term declines which have been seen in international coffee prices in recent
years remained in effect during 2019. Although local coffee production is expected to register
growth of 5-8% (6.6 millions of quintals in real terms) over the course of the year, even if the
area under coffee been cultivation is between 10,000 and 15,000 hectares this year, it is
expected the local producers will continue to record losses. Some of the country’s highly-
indebted coffee producers are beginning to replace coffee crops with cacao, citrus, kion (ginger)
or even coca crops in order to supplement their income in what are difficult times for many.
Despite this scenario, characterised by positive growth and favourable price reductions, local
consumption of ground coffee is not yet enough to absorb this surplus. It is very unlikely that
instant coffee would be able to absorb it either as most of Peru’s instant coffee is imported,
rather than manufactured locally.

COMPETITIVE LANDSCAPE

Nestlé Peru Relies on Investment in Advertising To Maintain Category

Leadership
2019 saw Nestlé Perú remain the strong leader in coffee sales. The company continues to
invest in marketing, include media advertising campaigns and in-store promotions. Much of the
company’s advertising activity revolves around new launches, although its well-known brands
are also commonly advertised. Indeed, it is the company’s focus on advertising which is the
basis of its success. Nestlé is also an innovator and the company entered coffee makers during
the review period with the introduction of automatic coffee machines which are designed to use
fresh coffee beans.

Exportadora Romex Maintains Its Position As the Leading Local Player

Exportadora Romex remains the leading domestic producer in coffee. The company can
attribute its strong position in the category to the wide variety of brands it offers at different price
points. In the mainstream segment, it offers Cafetal, a long-standing brand which has been
available in Peru for more than 55 years. The brand is available in a standard variant named
Selecto as well as the upmarket Gourmet variant. Romex also offers premium coffee under the
brand 338 Premium Coffee, which comes in regular and organic variants. The company has
also invested in the development of a chain of specialist coffee shops under the 338 Premium
Coffee brand, focusing initially on university campuses. This is a strategic move as many young
adults begin to familiarise themselves with coffee while they are studying at University. 338
Premium Coffee outlets are also increasingly seen in locations such as bus stations. The
company also has a strong presence in the on-trade with coffee machines offering Cafetal and
338 Premium Coffee.

Brazilian Brand Melitta Becomes Available in Peruvian Supermarkets

Towards the end of 2018, Brazilian coffee brand Melitta bet on achieving strong penetration in
Peru by launching in the country. This launch was undertaken via modern grocery retailers, with
chained supermarkets the main focus. The Melitta brand already has a strong presence in

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various Latin American countries such as Argentina, Chile and Colombia. In addition, the brand
is a common site on retail shelves in various countries in Europe, North America and Asia.
Having evaluated Peru’s hot drinks market, the company decided to enter the country via
modern retailing channels. The brand’s portfolio of nine products has been carefully selected to
reach different target consumer groups. This product range spans various categories across
fresh ground coffee and instant coffee, including notably its cappuccino preparation blends,
categorised under instant coffee mixes.

CATEGORY DATA
Table 1 Retail Sales of Coffee by Category: Volume 2014-2019

Tonnes
2014 2015 2016 2017 2018 2019

Fresh Coffee 1,294.1 1,329.0 1,395.5 1,491.9 1,569.0 1,648.4

- Fresh Coffee Beans 67.1 67.6 69.6 71.1 73.3 75.4
- Fresh Ground Coffee 1,226.9 1,261.4 1,325.9 1,420.7 1,495.7 1,573.0
-- Fresh Ground Coffee 13.1 22.7 42.4 69.0 82.6 98.0
Pods
-- Standard Fresh 1,213.8 1,238.8 1,283.6 1,351.7 1,413.1 1,474.9
Ground Coffee
Instant Coffee 2,968.7 3,132.5 3,204.6 3,320.0 3,565.0 3,820.0
- Instant Standard Coffee 2,903.3 3,062.6 3,122.3 3,229.9 3,464.9 3,709.3
-- Regular Instant 2,804.5 2,957.9 3,010.2 3,104.8 3,328.0 3,559.9
Standard Coffee
-- Decaffeinated 98.8 104.6 112.1 125.1 136.9 149.4
Instant Standard Coffee
- Instant Coffee Mixes 65.4 69.9 82.3 90.0 100.1 110.7
-- Regular Instant 65.4 69.9 82.3 90.0 100.1 110.7
Coffee Mixes
-- Decaffeinated - - - - - -
Instant Coffee Mixes
Coffee 4,262.8 4,461.5 4,600.1 4,811.8 5,134.0 5,468.4
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 2 Retail Sales of Coffee by Category: Value 2014-2019

PEN million
2014 2015 2016 2017 2018 2019

Fresh Coffee 59.0 62.6 70.2 79.7 85.0 90.8

- Fresh Coffee Beans 6.8 7.0 7.4 7.5 7.6 7.7
- Fresh Ground Coffee 52.2 55.6 62.8 72.2 77.4 83.1
-- Fresh Ground Coffee 3.0 5.2 10.1 17.0 20.4 24.3
Pods
-- Standard Fresh 49.2 50.4 52.7 55.2 57.0 58.8
Ground Coffee
Instant Coffee 366.0 390.6 420.3 447.3 476.2 505.8
- Instant Standard Coffee 359.8 384.0 412.3 438.6 466.5 495.1
-- Regular Instant 348.4 371.8 398.9 423.7 450.4 477.8
Standard Coffee
-- Decaffeinated 11.4 12.1 13.4 14.8 16.0 17.3
Instant Standard Coffee

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- Instant Coffee Mixes 6.2 6.6 8.0 8.8 9.7 10.7

-- Regular Instant 6.2 6.6 8.0 8.8 9.7 10.7
Coffee Mixes
-- Decaffeinated - - - - - -
Instant Coffee Mixes
Coffee 425.0 453.2 490.4 527.0 561.2 596.7
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 3 Retail Sales of Coffee by Category: % Volume Growth 2014-2019

% volume growth
2018/19 2014-19 CAGR 2014/19 Total

Fresh Coffee 5.1 5.0 27.4

- Fresh Coffee Beans 2.9 2.4 12.3
- Fresh Ground Coffee 5.2 5.1 28.2
-- Fresh Ground Coffee Pods 18.7 49.5 646.9
-- Standard Fresh Ground Coffee 4.4 4.0 21.5
Instant Coffee 7.2 5.2 28.7
- Instant Standard Coffee 7.1 5.0 27.8
-- Regular Instant Standard Coffee 7.0 4.9 26.9
-- Decaffeinated Instant Standard Coffee 9.1 8.6 51.2
- Instant Coffee Mixes 10.6 11.1 69.2
-- Regular Instant Coffee Mixes 10.6 11.1 69.2
-- Decaffeinated Instant Coffee Mixes - - -
Coffee 6.5 5.1 28.3
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 4 Retail Sales of Coffee by Category: % Value Growth 2014-2019

% current value growth

2018/19 2014-19 CAGR 2014/19 Total

Fresh Coffee 6.8 9.0 53.9

- Fresh Coffee Beans 1.7 2.6 13.9
- Fresh Ground Coffee 7.3 9.7 59.1
-- Fresh Ground Coffee Pods 19.1 52.1 714.8
-- Standard Fresh Ground Coffee 3.1 3.6 19.3
Instant Coffee 6.2 6.7 38.2
- Instant Standard Coffee 6.2 6.6 37.6
-- Regular Instant Standard Coffee 6.1 6.5 37.2
-- Decaffeinated Instant Standard Coffee 8.0 8.7 51.9
- Instant Coffee Mixes 10.2 11.5 72.3
-- Regular Instant Coffee Mixes 10.2 11.5 72.3
-- Decaffeinated Instant Coffee Mixes - - -
Coffee 6.3 7.0 40.4
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 5 Retail Sales of Fresh Ground Coffee Pods by Hard vs Soft: % Volume 2014-
2019

% retail volume

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2014 2015 2016 2017 2018 2019

Hard Coffee Pods 100.0 100.0 100.0 100.0 100.0 100.0

Soft Coffee Pods - - - - - -
Total 100.0 100.0 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources
Note: Totals may not sum to 100% due to data rounding

Table 6 NBO Company Shares of Coffee: % Retail Value 2015-2019

% retail value rsp

Company 2015 2016 2017 2018 2019

Nestlé Perú SA 61.5 61.4 58.3 57.1 56.1

Altomayo Perú SAC 21.0 20.7 23.2 24.3 25.4
Exportadora Romex SA 7.9 7.8 7.6 7.4 7.2
Corporación Tres Montes 2.5 2.4 2.6 2.7 2.8
Perú SA
Expertos en Café Perú SAC - 1.1 1.1 1.2 1.2
Gloria SA, Grupo 0.4 0.4 0.4 0.4 0.4
Hipermercados Metro SA 0.5 0.5 0.4 0.4 0.4
NB Tealdo & Co SA 0.4 0.4 0.4 0.3 0.3
Finca Villa Rica 0.3 0.3 0.3 0.3 0.2
Café Britt Perú SAC 0.3 0.3 0.2 0.2 0.2
Cía Nacional de 0.0 0.1 0.1 0.2 0.2
Chocolates de Perú SA
Central de Cooperativas 0.1 - - - -
Agrarias Cafetaleras
Cocla LTDA
Others 5.0 4.6 5.3 5.5 5.6
Total 100.0 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 7 LBN Brand Shares of Coffee: % Retail Value 2016-2019

% retail value rsp

Brand (GBO) Company (NBO) 2016 2017 2018 2019

Nescafé (Nestlé SA) Nestlé Perú SA 31.9 30.0 29.3 28.6

Altomayo Altomayo Perú SAC 20.7 23.2 24.3 25.4
(Corporación PERHUSA)
Kirma (Nestlé SA) Nestlé Perú SA 24.8 22.8 22.1 21.4
Cafetal Exportadora Romex SA 7.8 7.6 7.4 7.2
Nescafé Dolce Gusto Nestlé Perú SA 1.9 2.8 3.1 3.5
(Nestlé SA)
Monterrey (Grupo Corporación Tres Montes 2.4 2.6 2.7 2.8
Nutresa SA) Perú SA
Nescafé Cappuccino Nestlé Perú SA 1.5 1.5 1.4 1.5
(Nestlé SA)
Juan Valdez Expertos en Café Perú SAC 1.1 1.1 1.2 1.2
(Federación
Nacional de
Cafeteros de
Colombia)
Nescafé Decaf Nestlé Perú SA 1.3 1.2 1.2 1.2

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(Nestlé SA)
Monaco Gloria SA, Grupo 0.4 0.4 0.4 0.4
Metro (Private Label) Hipermercados Metro SA 0.5 0.4 0.4 0.4
Zena NB Tealdo & Co SA 0.4 0.4 0.3 0.3
Villa Rica Finca Villa Rica 0.3 0.3 0.3 0.2
Britt Café Britt Perú SAC 0.3 0.2 0.2 0.2
Colcafé (Grupo Cía Nacional de 0.1 0.1 0.2 0.2
Nutresa SA) Chocolates de Perú SA
Elbo (Corporación Altomayo Perú SAC - - - -
PERHUSA)
Cocla Central de Cooperativas - - - -
Agrarias Cafetaleras
Cocla LTDA
Monterrey Corporación Tres Montes - - - -
(Tresmontes Perú SA
Lucchetti SA)
Others Others 4.6 5.3 5.5 5.6
Total Total 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 8 Forecast Retail Sales of Coffee by Category: Volume 2019-2024

Tonnes
2019 2020 2021 2022 2023 2024

Fresh Coffee 1,648.4 1,723.8 1,798.4 1,871.7 1,944.2 2,015.9

- Fresh Coffee Beans 75.4 77.4 79.4 81.2 82.8 84.3
- Fresh Ground Coffee 1,573.0 1,646.4 1,719.0 1,790.5 1,861.4 1,931.6
-- Fresh Ground Coffee 98.0 110.8 122.3 132.8 142.8 152.5
Pods
-- Standard Fresh 1,474.9 1,535.6 1,596.7 1,657.7 1,718.6 1,779.2
Ground Coffee
Instant Coffee 3,820.0 4,081.5 4,349.1 4,625.6 4,912.4 5,211.7
- Instant Standard Coffee 3,709.3 3,960.1 4,216.6 4,481.8 4,757.1 5,044.5
-- Regular Instant 3,559.9 3,797.5 4,039.9 4,290.6 4,551.0 4,823.4
Standard Coffee
-- Decaffeinated 149.4 162.6 176.7 191.3 206.1 221.1
Instant Standard Coffee
- Instant Coffee Mixes 110.7 121.4 132.5 143.8 155.2 167.1
-- Regular Instant 110.7 121.4 132.5 143.8 155.2 167.1
Coffee Mixes
-- Decaffeinated - - - - - -
Instant Coffee Mixes
Coffee 5,468.4 5,805.3 6,147.4 6,497.3 6,856.6 7,227.6
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 9 Forecast Retail Sales of Coffee by Category: Value 2019-2024

PEN million
2019 2020 2021 2022 2023 2024

Fresh Coffee 90.8 97.9 104.7 111.5 118.2 125.0

- Fresh Coffee Beans 7.7 8.0 8.3 8.6 8.9 9.2
- Fresh Ground Coffee 83.1 89.8 96.4 102.8 109.3 115.8
-- Fresh Ground Coffee 24.3 27.8 31.1 34.2 37.3 40.3

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Pods
-- Standard Fresh 58.8 62.0 65.3 68.6 72.0 75.5
Ground Coffee
Instant Coffee 505.8 544.4 584.3 625.7 669.4 715.5
- Instant Standard Coffee 495.1 532.6 571.3 611.4 653.8 698.5
-- Regular Instant 477.8 513.4 550.2 588.2 628.5 671.0
Standard Coffee
-- Decaffeinated 17.3 19.1 21.1 23.2 25.3 27.5
Instant Standard Coffee
- Instant Coffee Mixes 10.7 11.8 13.1 14.3 15.6 17.0
-- Regular Instant 10.7 11.8 13.1 14.3 15.6 17.0
Coffee Mixes
-- Decaffeinated - - - - - -
Instant Coffee Mixes
Coffee 596.7 642.3 689.1 737.2 787.7 840.5
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 10 Forecast Retail Sales of Coffee by Category: % Volume Growth 2019-2024

% volume growth
2019/20 2019-24 CAGR 2019/24 Total

Fresh Coffee 4.6 4.1 22.3

- Fresh Coffee Beans 2.7 2.2 11.8
- Fresh Ground Coffee 4.7 4.2 22.8
-- Fresh Ground Coffee Pods 13.0 9.2 55.5
-- Standard Fresh Ground Coffee 4.1 3.8 20.6
Instant Coffee 6.8 6.4 36.4
- Instant Standard Coffee 6.8 6.3 36.0
-- Regular Instant Standard Coffee 6.7 6.3 35.5
-- Decaffeinated Instant Standard Coffee 8.8 8.2 48.0
- Instant Coffee Mixes 9.6 8.6 51.0
-- Regular Instant Coffee Mixes 9.6 8.6 51.0
-- Decaffeinated Instant Coffee Mixes - - -
Coffee 6.2 5.7 32.2
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 11 Forecast Retail Sales of Coffee by Category: % Value Growth 2019-2024

% constant value growth

2019/2020 2019-24 CAGR 2019/24 Total

Fresh Coffee 7.7 6.6 37.6

- Fresh Coffee Beans 4.0 3.5 18.7
- Fresh Ground Coffee 8.1 6.9 39.4
-- Fresh Ground Coffee Pods 14.4 10.6 65.6
-- Standard Fresh Ground Coffee 5.4 5.1 28.5
Instant Coffee 7.6 7.2 41.5
- Instant Standard Coffee 7.6 7.1 41.1
-- Regular Instant Standard Coffee 7.5 7.0 40.4
-- Decaffeinated Instant Standard Coffee 10.4 9.7 58.9
- Instant Coffee Mixes 10.8 9.7 59.1
-- Regular Instant Coffee Mixes 10.8 9.7 59.1
-- Decaffeinated Instant Coffee Mixes - - -
Coffee 7.6 7.1 40.9

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Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

© Euromonitor International