Greece has a unique coffee culture and a strong domestic market. As Europe’s sixth largest branded coffee chain market emerges from the pandemic, its vital tourism industry is also rebounding, with new business models gaining traction among operators, reports Vasileia Fanarioti
World Coffee Portal forecasts Greece's branded café market to reach 2,360 outlets by 2027 | Photo credit: Kite_rin
The Greeks have a lifelong love affair with coffee, one that not only has successfully passed the test of time but is constantly getting stronger.
Greece has among the highest per capita coffee consumption in the world. Around 40,000 tons of coffee are consumed every year, with around 60% consumed at home and 40% consumed in coffee shops.
It should come as no surprise that Greek coffee shops not only survived but thrived during the pandemic.
World Coffee Portal research shows Greece was among 14 European markets that maintained positive outlet growth during the darkest days of the pandemic in 2020. In 2021, the branded café market maintained its positive trajectory, achieving 3.6% outlet growth to exceed 1,900 stores.
In fact, Greece has produced some of the most prominent branded coffee chains in Europe, including Coffee Island (432 outlets), Gregory’s (363 outlets), Mikel Coffee Company (254 outlets), and CoffeeLab (121 outlets).
Unlike other European countries, coffee shops in Greece are frequently open all day and late into the evening, offering a wide range of coffees, from traditional ibrik coffee and Greek frappé to freddo espresso and cappuccino.
Aside from the cultural affinity with coffee, Greeks also have a strong sense of entrepreneurship that has enabled them to create a successful branded coffee shop market – eight of the ten largest café chains in Greece are domestic businesses.
The retail coffee revolution
Since the pandemic, many operators have sought opportunities in retail packaged coffee as lockdowns forced the temporary closure of outlets –a dynamic that has generated major shifts in the market as consumers began experimenting with more sophisticated coffee equipment and products.
Sales of retail coffee in Greek supermarkets increased 11.6% by volume to reach a value of €334m in 2020, making the segment a savvy opportunity for coffee shops seeking to sidestep temporary store closures during Covid-19 lockdowns.
Coffee Island is an example of a company that successfully adapted its business model to sell branded coffee products in retail stores. In 2020 the company launched a marketing campaign focusing on personalised at-home coffee experiences.
Greek café Coffee Island tapped into the at-home coffee market during the pandemic | Photo credit: Tamara Bellis
“The pandemic has benefited the Greek coffee market in a unique way. Home consumers no longer treat their coffee as a quick or cheap solution, but as their own personal experience,” explains Konstantinos Konstantinopoulos, CEO of Coffee Island.
The Greek coffee shop market saw other notable dynamics during the pandemic. Larger stores were better able to keep trading due to the requirements of social distancing after lockdowns eased.
Greeks also shifted from cash to contactless payments as a way of maintaining social distance. Additionally, many coffee shops invested in the delivery and takeaway services sector.
Two market surveys conducted by the Greece E-Commerce Association (GRECA) in collaboration with the research company Truberries showed almost half of online purchases (48%) related to food or coffee delivery in 2021.
Greece’s food and beverage delivery market is now estimated to be worth more than €500m, with Efood, Wolt and BOX the largest delivery operators, serving around 81,000 hospitality businesses across the country.
Coffee chains, too, invested resources in online delivery and have continued to use the channel and partner with third-party platforms even as pandemic restrictions have subsided.
Vivartia Catering Group, which operates Flocafé Espresso Room alongside a group of hospitality brands, saw delivery rates across its group increase by around 40% in 2021 to reach 60% of the businesses’ total revenues.
Anna Koliva, Marketing Director of Gregory’s comments: “The pandemic has certainly influenced customer behaviour, therefore commercial transactions have changed. Remote working has enhanced consumers’ need for convenience and the trend of online ordering has experienced great growth. Transactions through aggregators in the online channel are constantly increasing.
“In Greece, existing aggregators boosted their sales and grew their business, with new players also appearing in the market. Additionally, we have observed an increased interest in beverages that contain sustainable ingredients and are sold in sustainable packaging. In this context, adding vegan milk alternatives in coffee has also become more popular,” Koliva adds.
According to the European Commission’s Winter 2022 Economic Forecast, Greece is on the way to returning to pre-pandemic levels regarding tourist footfall
Reduced tourism, new business models
Greece’s tourism industry is a key contributor to the national economy, accounting for 21% of GDP on an annual basis. Travel restrictions, however, resulted in strong losses for businesses in the sector and those that rely on tourist footfall.
According to a 2021 PwC
report, Greek travel and tourism businesses saw a 78% decrease in trade between January and September 2020 compared to the same period in 2019.
Greece’s great dependence on the tourism and hospitality industries made the domestic economy particularly vulnerable to the pandemic. While coffee businesses were not immune to this, however, it’s worth noting that the Greek coffee shop industry is predominantly geared towards domestic trade.
“Greek coffee chains have always relied on the domestic market. The habits of Greek consumers are completely different in relation to foreign markets,” explains Petros Malousis, Marketing Manager of CoffeeLab.
“Coffee shops located in tourist areas were clearly affected by the pandemic; however, this was also an incentive for each company to take a moment and assess the future.”
Coffee shops and restaurants in Athens | Photo credit: Datingjungle
Tourist numbers are now beginning to recover. According to the European Commission’s Winter 2022 Economic Forecast, Greece appears on the way to returning to pre-pandemic levels regarding tourist footfall.
As Marialena Togka, Assistant Brand Manager of Flocafé explains, market disruption has presented new opportunities for coffee businesses.
“As the effects of the pandemic subside and tourism gradually returns to normal, businesses are finding new opportunities for development. A typical example is the strong presence cultivated by the Flocafé Espresso Room in closed markets, such as airports and areas with heavy tourist traffic, where new points are created based on existing or new concepts.”
At the same time, new hotel developments are constantly emerging due to the high tourism demand in the country. Anna Koliva from Gregory’s recognises an opportunity for collaboration between coffee shops and hotels.
“Coffee shops could cater for small and medium-sized hotels for their breakfast service. We believe that such a service will help both hotels to offer a pleasant breakfast experience to their customers, as well as coffee chains to expand their customer base.”
The rise of specialty coffee in Greece
Despite being growing in popularity in European markets for years, premium and specialty coffee has only been embraced by Greek consumers relatively recently. In the past few years, the country has seen an increase in the number of specialty coffee shops opening, as well as an increase in consumer interest in specialty coffee.
Today, the demand for specialty coffee is on the rise, and represents a shift in consumer behaviour.
Petros Malousis from CoffeeLab, explains: “Greek consumers have been slow to change the way they drink their coffee but the trend of specialty coffee shops is starting to grow. The demand for 100% Arabica beans and single origin options has grown a lot in recent years. I believe these new types of coffees are here to stay, since consumers between 18-34 years old seem to be increasingly interested in them.”
The pandemic is likely to have encouraged innovation across retail packaged coffee, delivery, new store formats and specialty coffee consumption
In the wake of the Covid-19 pandemic, Greece’s coffee shop market faced several new challenges. With reduced tourism numbers and a rise in home consumption, many businesses had to adapt their strategies to stay afloat.
For many Greek coffee chains, the pandemic provided opportunities to increase their customer base, rethink their advertising campaigns and experiment with new business models. Despite the pandemic causing significant disruption in the short term, it is also likely to have encouraged innovation across retail packaged coffee, delivery, new store formats and specialty coffee consumption.
It remains to be seen how the post- Covid era will impact the Greek coffee industry. Nevertheless, with World Coffee Portal
forecasting the outlet growth at 4.4% CAGR over the next five years, to reach 2,360 outlets by 2027, Greece’s branded coffee chain operators are clearly embracing change positively.
This article was first published in Issue 10 of 5THWAVE magazine.
Subscribe to 5THWAVE to receive each edition in print and digitally or sign up to our newsletter and be the first to read the latest articles and updates on
World Coffee Portal research.