American company Kraft Foods has decided to make a revolution in a
separately considered market. They are designing a new coffee-making
machine. Kraft intends to eliminate cheap drip coffee makers and to
decidedly accustom the world to a quality drink. The company hopes to increase
the consumption of the drink. Russia will also be involved in the coffee
war. However, one should note the importance of taking into
account the peculiarities of each country and also such
essential thing as average income of the population of
countries - targets of the new direction of the company's activity.
Lately Kraft Foods has been feeling quite uncertain in the market. The
executive officer
of the company Rodger Deromedi is personally unsatisfied with the last
year's results. The new coffee maker initiative, according to
the company's management, should bring it back to the
track of stable growth. Kraft promises that the new low pressure
home coffee maker will allow to brew espresso coffee of restaurant quality
at home and thinks that it will become a blockbuster in
the American market. It will be manufactured on the production facilities
of a small company Hamilton Beach/Proctor Silex.
The main purpose of the new project of Kraft Foods is the promotion of
specially-packed ground coffee. Each coffee machine
consumes an average of 1,000 one-load bags of packed ground coffee a year. But
the company is also seriously considering the prospects of entering the
market of coffee-making equipment. Today it is filled with cheap drip
coffee makers which cost no more than $10-13. The coffee made by them is
not of the best quality, but until lately there were no alternatives. The most
inexpensive espresso coffee makers cost about $300 as late as 10 years ago.
And a one-load bag of ground coffee cost an American housewife about $1. Today
the situation has changed. There are 108 million coffee consumers in the
country. The cost of home low pressure coffee makers lowered to $60, and a
one-load bag of coffee in the U.S.A. costs no more than 20 cents. In these
conditions the manufacturers of coffee-making equipment think that quality
coffee makers must enter every household to replace drip
coffee makers. In the U.S.A. there are about 48 million coffee-consuming
households and about 16 million old-type coffee makers waiting for
replacement. And the yearly volume of the market for coffee equipment is
estimated at $1.5 billion.
Kraft Foods' competitors - the companies Nestle, Procter&Gamble, Sara Lee
and Salton - are also on the alert. They launched own projects of
manufacturing their original coffee machines. This year Sara Lee will start
selling its version of home coffee makers in the U.S.A. P&G together with
Black&Decker are promoting the sales of low pressure espresso coffee makers
in the U.S.A. under strong brands Folgers and Millstone. The coffee
monsters have one purpose - to stimulate the sales of own-produced ground
coffee through the market of coffee makers.
There is an obstacle to the conquest of American market of home
coffee makers - it is the culture of coffee consumption in the States.
Unlike Europeans, Americans are used to drinking coffee by large mugs,
and "quick" drinks are more popular among them. Despite all efforts of
coffee corporations to promote "real" coffee, USA, as well as Great Britain
and Russia, remain the instant coffee country.
"In Russia the consumption of ground coffee and roasted coffee grains is
growing with the highest speed amid all the market?",- says Kirill
Bolmatov, corporate manager of Kraft Foods. - Today this segment accounts
for more than 15% of Russian market."
And the market of professional and home coffee makers and coffee
grinders is developing along with the market of ground
coffee. By now, the market is saturated
with coffee making equipment from Italy, Germany, USA and
Switzerland. However, considering the fact that coffee consumption in our
country is about 350 g per person a year compared to several kilograms in
European countries, the prospects of development of coffee businesses
become obvious.
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