Australian coffee industry set off a trend of integration and operators scramble for market share

The overall size of the Australian coffee industry is more than A $4 billion, but there is not a single giant in the market at present. The strong growth of the retail coffee market has stimulated the major coffee brands to consider asset integration, expand the scale of operations and increase their market share.

ACB News "Australia China Finance online" reported that the overall size of the Australian coffee industry is as high as A $4.3 billion, of which the retail coffee sector is about A $3.2 billion. Unlike other industries, the Australian coffee industry does not have an industry leader in the market, but is divided equally by 6700 coffee companies, with an overall profit of more than A $250 million a year.

However, with the growing market, many coffee companies are considering expansionary development strategy, through the acquisition of stores, all-round purchase of coffee roasting, processing equipment and other measures, unified control of quality and cost, in order to expand market share.

RFG (Retail Food Group), an Australian listed retail food group, took the lead in acquiring famous Australian coffee chain Gloria Jeans and Brisbane coffee brand Di Bella.ACB News "Australia China Finance online" for A $164 million and A $47 million respectively last year. It has been reported that after the acquisition, RFG Group will continue to adhere to the "farm-to-coffee cup" principle. Direct purchase of coffee beans, processing in the group's baking and packaging plants in Australia, the United States, New Zealand and other countries, expand the international market, and plan to distribute to the Middle East and China (report link).

The fast food industry is closely followed by the advantage of outlets, and the action of global brands is eye-catching. McDonald's, which has total sales of A $4 billion in Australia, also intends to continue to expand its coffee business. McDonald's currently has 750 McCafes cafes in Australia and plans to open a hipster coffee shop called The Corner in Sydney in the near future.

Withers Group, the Australian subsidiary of convenience store brand 7-Eleven, which has 600 stores in Australia, said that its hot drink business (including coffee and chocolate) increased by 30 per cent last year. In order to meet the market demand, 7-Eleven plans to launch "one dollar coffee", and hot drink sales are expected to reach A $40 million in the coming year. To grab market share, Withers Group bought the Australian operation of Starbucks Coffee last year and opened a Starbucks with an area of about 200m2 in Brisbane Garden City (Garden City).

The development of the coffee industry in Australia is unique. A large number of coffee shops do not buy coffee grinding equipment on their own, but tend to lease these equipment from coffee bean suppliers, usually for a term of 3-5 years. With the growing development of the coffee industry, many large franchisees have begun to buy equipment for vertical integration of the industry.

CEO Dan Gallo, the Melbourne arm of Australian coffee group Coffee Club, also said that Coffee Club was also continuing industrial association and vertical integration and was considering abandoning the use of contracted roasters to buy its own coffee roasters and intended to launch bagged coffee in stores and online at the same time.

Source: Australia China Finance online