Italians keep drinking coffee despite price rises

Italians keep drinking coffee, despite rising prices, and this year they are consuming as much or even slightly more than in 2010 although they have more at home to save money, a senior industry official said. Italy is one of Europe's major coffee markets, using about 5.7-5.8 kg per head and with total consumption of 5.8 million 60-kg coffee bags in 2009, according to data from the International Coffee Organisation (ICO).
Italy's coffee demand eased 0.2-0.3 percent in 2010 but is set to stabilise this year, Gianluigi Sora, chairman of Istituto Nazionale Espresso Italiano (INEI) industry body told Reuters on Tuesday. "(This year's consumption) seems fairly stable, with a tendency towards a very slight increase," Sora said in a telephone interview. "It seems we cannot give up on coffee."
Italian prices of high-quality roasted coffee shot up 27-36 percent on average in 2010, catching up with rising prices of green coffee on the world markets, while lower quality blends rose just 5 percent, influencing consumer choices, Sora said. Italy's leading coffee roaster Lavazza has raised its prices on international markets by 9-16 percent starting from January.
Sora said more price increases by coffee roasters are likely around June, as they try to pass on rising costs to consumers. Eye-poppingly strong espresso, usually taken in tiny trademark cups in a cafe or a restaurant, remained a favourite coffee, but Italians now tend to drink more coffee at home.
"It's easy to make your sums: if you drink two coffees less a day in a cafe, you save 60 euros ($88) a month," Sora said. The changing habits have prompted roasters to increase output for retail sale and boost production of capsule coffee, for use in machines, which lets consumers drink high-quality coffee at home or in the office.
Consumption of capsule coffee, which accounts for about 5 percent of Italy's coffee market, rose 8-9 percent last year with Switzerland's Nestle taking a leading role in this segment, Pierluigi Milani of Milani coffee roaster told Reuters this month. Re-export of Italian roasted coffee, which suffered a blow during the global economic crisis in 2009, started picking up in the second half of last year, Sora said without giving precise estimates.
Italy re-exported 2.1 million bags of roasted coffee in 2009, according to ICO data. Italy's main coffee export markets are Germany, France, the United States, Spain, Portugal, eastern Europe, China, India, South America, Sora said. On the domestic market, espresso remained the preferred coffee for Italians, followed by a creamy milk cappuccino, while specialty coffees remain a niche segment but slowly expanding, he said. INEI was set up in 1998 to promote Italy's espresso and now unites 43 Italian coffee roasters and coffee machine makers with a total revenues of about 650 million euros ($944.3 million).