Coffee in Russia 2020
Russians are drinking more coffee and less tea. Further, they are buying less soluble coffee, in favor of whole bean and ground coffee.
This is big.
When I began selling coffee in Russia in 1995, I latched onto a story about why Russians drink soluble coffee. I have been telling it ever since. It all comes down to tea, or chai in Russian, a word used in many other languages. Every Russian worth his salt has a teapot that stands on a countertop instead of the kind that goes on your stove and whistles. It is called a chainik and not a coffeenik for a reason. At the end of a meal, the question “chai postavit’?” (put on the teapot?) is asked, signifying it is time for tea, and dessert. Tea is made from hot, boiling water that is, needless to say, poured into a cup. The cup either has tea in it, usually a teabag, along with sugar and often honey. Sometimes jam, fruit or other ingredients are added. Soluble coffee is simply a replacement for tea in Russia. Instead of pouring hot water into a cup with tea in it, soluble coffee (usually with sugar or milk) is placed in the cup and hot boiling water is poured on top. That’s it; the story I have been telling all these years.
I am going to come up with a new explanation for how and why Russians drink coffee. More and more Russians are switching from tea and soluble coffee to roasted coffee. Clearly, the growth in popularity of coffee offered at many offices, from vending machines and at coffee shops has had an effect. Until now, the hot drink of choice for Russians in the morning has been tea with coffee increasing in popularity at work. Nowadays Russians are reaching for a cup of joe in the morning at home and carrying on at work or elsewhere. They are boiling it, using a French press, coffee machines or in other ways. But coffee is now growing, pushing tea out.
In Russia, tea has reigned supreme for centuries. It still does. Russians drink an average of 3 and even 4 cups per day of tea. Some think these numbers are higher. Tea is how Russians stop time. The food comes out, the tea is poured, piping hot. Conversation starts and keeps going. Rolls are consumed, also sweets. Call me nostalgic, but I say this tradition is worth preserving.
In April 2020, the tea market declined in value by 5% and in weight by 7% versus the same month in 2019. Soluble coffee also declined by 11% in value and 11% in tons. Roast and ground meanwhile went up 5% in value and 7% in tons during April 2020 versus April 2019. This is taking place despite the difficulties faced by the Rouble. The trend this month (July 2020) remain consistent. It is taking place in difficult times. During the first quarter of 2020, a horrible year if ever there was one, the Rouble fell in value from about 62 Roubles to the Dollar in January to around 70 Roubles/1 USD today caused in large part by the plummeting price of oil, along with the impact of sanctions and the low level of investments into the Russia economy. Because so much of the Russian consumer economy is tied to the Dollar, the weakening Rouble had a negative impact on consumer spending and inflation. As oil was taking a nose-dive, along came COVID-19, causing a significant downturn in the Russian economy. Nevertheless, despite inflation, the weak Rouble, the virus, a deepening economic crisis, the Russians went out and paid more for roast and ground coffee and consumed it in greater volumes.
Prior to 2018, most grocery shelves would predominately display instant coffee. Freeze dried soluble coffee grew steadily from 1995 right up until 2017-18. In response to this preference for soluble, many retailers would devote up to 70% of their shelves to instant while roast and ground coffee was given the remainder of shelf space. Now, in many shops, the shelf layout is often the reverse. The coffee section in many Russian retailers is dominated by roast and ground coffee, instead of soluble. I buy most of my food at a retail outlet named Perekriostok in the Moscow suburbs where 70% of the shelf is now offering coffee while 30% of it is soluble. The roles have been reversed.
Many coffee brands have taken notice. At my Perekriostok, I found 24 different ‘natural’ roast and ground coffee brands on the shelf. Of these brands, at my count, about 40% have launched new packaging designs and blends within the last year. Many of the blends presented are top notch. I have had excellent coffee roasted in Russia that stands up to the best global brands. The range of brands far exceeds the number on shelves in more mature coffee markets such as the US and Europe. It is a Klondike for coffee people like me who have the duty of sampling all those coffees and coming to an expert opinion, something I do every day.
Both ground coffee and whole beans have experienced growth. Many blends are 100% arabica content. Affordable robustas are in high demand as well. There is nothing at all wrong with robusta and many Russians prefer a strong cup of it, often with milk and sugar. The more affordable, robusta blends are mostly packed in 250 gram ‘bricks’ while Arabica coffees are mostly offered in soft packs. The most popular packaging is 250 gram, offering both ground coffee and whole beans, and 1 kg bags of whole beans. More Russians are buying bigger packs of coffee, especially these days with so many people spending so much time at home.
As a consumer, I am of two minds about the growth of coffee at the expense of tea. Drinking tea has always been so important here. I hope it does not end. Although I am a coffee guy and have made a living off of black gold for some time now, I am doing my best to keep tea alive. I normally have two and sometimes three cups of tea per day. In this way, I am doing what I can to bump up the statistics. I hope that guy named Nielsen is paying attention.
Daniel Brooks, copyright, July 23, 2020.