MARKET REPORT Eastern Europe
Image: Cafe Frei.
Hungarian coffee shop chain Cafe Frei opened a store in Croatia’s capital Zagreb in July 2021.
Emerging economies THE EASTERN EUROPEAN COFFEE INDUSTRY REBOUNDS POST-PANDEMIC WITH EYES ON INTERNATIONAL EXPANSION AS RESTRICTIONS BEGIN TO LIFT. JAROSLAW ADAMOWSKI EXPLAINS.
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he global pandemic has slowed down the growth rate Eastern Europe’s coffee industry had experienced prior to 2020. This said, with most restrictions on coffee shops lifting from April and May 2021 due to an improved health situation, local chains are hoping to return to a rapid expansion path, with plans to increase their presence across the continent. Of the European Union’s 27 member states, 11 countries are located in the Eastern European region. Their aggregate population is about 102 million of the bloc’s roughly 448 million inhabitants. This, paired with their developing economies, makes Eastern Europe an increasingly attractive market for international coffee shop chains. With coffee shops temporarily closed to dine-in customers during various phases of European lockdowns, many sought to increase their sales through focusing on takeout sales. This, however, has proven to be difficult owing to the general preference of Eastern European consumers to consume drinks and food inside coffee shops, pointing to a number of differences in such operations in Western Europe and the continent’s eastern region.
EAST VERSUS WEST Tamas Frei, Co-founder of Hungarian coffee shop chain Cafe Frei, tells Global Coffee Report that the Eastern European coffee market has several distinct traits that make it different from its Western European counterpart. “In the West, coffee shops are often packed full of customers in the mornings, as many
of them buy coffee to go. But in Eastern Europe, coffee shops are above all a place where you spend time with your close ones, friends, and colleagues after work,” Frei says. “Another difference is that coffee shops here must have an offer that resembles that of a patisserie, so mainly sweets, cakes, croissants, and sandwiches.” Cafe Frei opened its first coffee shop in Hungary’s capital Budapest before expanding to other cities across the country. Once the chain became an established player in its domestic market, Cafe Frei embarked on international expansion. This drive allowed the business to secure a foothold in several European countries, including Switzerland, France, Croatia, Slovaki, Romania, and the Middle East, with a number of outlets opened in the United Arab Emirates and Saudi Arabia. These include the chain’s own
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