The Irish coffee shop sector has seen 14% sales growth in the last year, up to total turnover of €284m form 502 outlets, new research from Allegra Strategies World Coffee Portal shows.
By 2020, the sector is predicted to have grown to a turnover of €610, driven by branded expansion.
The report shows expansion by leading players, Insomnia, Costa and Starbucks, is the key driver of growth. However, smaller chains, such as Coffee Angel, closed stores and Nosh n Coffee exited the market.
Market leader, Insomnia, has 96 units and a 31% outlet market share. Insomnia has strong expansion plans and several new partnerships, including Debenhams, Compass and SPAR UK.
Costa is the second largest branded coffee shop chain, with most of its stores located regionally.
Ireland is historically a tea-drinking nation; the coffee drinking culture emerged about 10 years ago and the report shows that Ireland is now an emerging coffee-drinking nation. 83% of coffee shop visitors drink coffee at least once a month and 62% drink coffee daily. This is marginally less than the UK where 95% of coffee shop visitors drink coffee at least once a month and 75% drink coffee daily. Coffee is mostly consumed at home (10 cups per week), followed by at work (4 cups) and then in coffee shops (3 cups).
Currently 71% of consumers visit coffee shops at least once a week and 1 in 5 claim they intend to visit coffee shops more often in the next 12 months, fuelling further growth in this emerging market.
The report warns that strict planning laws in central Dublin which discourage more coffee shops and restaurants in Dublin make securing new sites centrally a significant challenge. As a result, growth from branded chains will be focused outside of Dublin.
Allegra World Coffee Portal predicts the total Irish coffee shop market will exceed 750 outlets and €610m turnover by 2020, driven by branded coffee chain expansion and non-specialist operator growth. The branded coffee shop segment is forecast to exceed €360m across 515 outlets by 2020 with outlets predicted to grow at 9.0% compound and revenue at 14.5% compound over the next 5 years.
