other publications without authorization · other publications without authorization formosa taiwan...

© I C E - A G E N Z I A I TA L I A N T R A D E A G E N C Y TA I P E I O F F I C E

T h i s D o c u m e n t i s p r o h i b i t e d f o r m o d i f i c a t i o n , c o p y, r e p r o d u c e , s p r e a d , o r i n c o r p o r a t e i n a n y

o t h e r p u b l i c a t i o n s w i t h o u t a u t h o r i za t i o n

CATALOGUE

FORMOSA TAIWAN – ECONOMY GLANCE ............................................................................... 3

EXECUTIVE SUMMARY ............................................................................................................ 4

HEADLINES .............................................................................................................................. 4

TRENDS ...................................................................................................................................... 4

Coffee Culture in Taiwan ....................................................................................................... 4

Retail Price Status .................................................................................................................. 5

COMPETITIVE LANDSCAPE .................................................................................................... 6

Nestle Leading the Local Market .......................................................................................... 6

Japanese UCC in Second Place, Uni-President Starbucks follows ...................................... 7

US Kraft Food with large decline .......................................................................................... 7

International Brands in Taiwan ............................................................................................. 8

INTEREXCHANGE WITH GLOBE/ITALY FOR CAFFEE ........................................................ 9

PROSPECTS .............................................................................................................................. 11

Retail volume grows maturely ............................................................................................ 11

Foodservice Channel Competes .......................................................................................... 12

Fresh Coffee expected to Expand ....................................................................................... 13

MARKET DATA ........................................................................................................................ 14

L'ICE-Agenzia ......................................................................................................................... 24




FORMOSA TAIWAN – ECONOMY GLANCE

Taiwan, named as FORMOSA by Portuguese in 16th Century, is an independent

regime from 1912 and a member of UN until 1971, controlling a total of 165

islands with surface of 36,197 Km2 as one of the major economy in Asia and major

producer in global market for high-tech, informational, communication and

electronic industries.

By DGBAS- Directorate-General of Budget, Accounting and Statistics in Taiwan, the

population is about 23.51 million. The whole of capital Taipei, New Taipei and

Keelung is named as “Taipei Metropolitan” with a total surface about 2,450Km2

and over 7 million populations. Other major metropolitans include Taoyuan,

Taichung, Kaohsiung, and Tainan. In 2016, Taiwan has registered a growth rate of

1.48%, while it is presumed as 2.27% in 2017.

Categories Data

Surfa c e 36,197 Km2

Populat ion 23.51 mil l ion

Capital Ta ipei

Principal M etropoli ta ne A rea Ta ipei , N ew Ta ipei, T a o y u a n , Taichung, Taina n e Ka ohs iung

Offic ial La ngua ge Chines e ma nda rin

Moneta ry Unit New Ta iwan Dol la r (N TD/TWD)

Excha nge Ra te 1 Euro è di 32.46 TWD; 1 USD è di 30 .76 TWD

Tel ephone Prefix +886

GDP in mil l ion U SD 525,196 (2015); 529,676 (2016)

GDP per capital in U SD 22,384 ( 2015); 22 ,530 (2016)

Exporta t ion in mil l ion USD 256,873/ -2,819% (2016)

Importa tion in mil l ion USD 229,825/ 0,883% (2016 )

Taiwa nes e Investment in worl d in bil l ion

USD, without inves t ment in C hina 12.12/12.82% (2016)

Foreign Investment in Taiwa n in

bil l ion USD, without Chines e

investment .

11.04/130. 09% ( 2016)




EXECUTIVE SUMMARY

HEADLINES

Coffee current value sales grow by 3% in 2016; retail volume sales grow by 1%

Consumers increasingly favour fresh coffee over instant coffee

On-trade coffee volume sales grow by 3%

Nestlé maintains its leading position in coffee in 2016 with a retail value share of 24%

Coffee value sales at constant 2016 prices are expected to grow at a CAGR of 2% over the

forecast period; retail volume sales are expected to grow at a CAGR of 1%

TRENDS

Coffee Culture in Taiwan

Taiwan’s coffee drinking culture continues to blossom. Coffee is widely available across the

country via multiple retail and foodservice channels. Moreover, consumer preferences have

become more sophisticated in recent years, with many people now favouring fresh coffee

over instant coffee products. This latter trend ensured that growth in coffee current value

sales significantly outpaced growth in retail volume sales in 2016.

In line with the development of the local coffee drinking culture, Taiwanese consu mers are

increasingly opting for product types that allow them to replicate on-trade experiences and

enjoy high quality, freshly brewed coffee at home. Fresh coffee beans and fresh ground coffee

are the categories that have benefited most from this trend towards greater consumer

sophistication in recent years. Given the trend towards busier lifestyles, convenience is also

an increasingly influential factor in coffee purchasing decisions for many consumers.




Retail Price Status

The retail average unit price for coffee increased by 2% in current value terms in 2016. This

increase was mainly driven by rising demand for higher quality brands and more

sophisticated product types such as fresh coffee beans and fresh ground coffee (including

pods). New launches by players seeking to capitalize on this trend also contributed to growth

in average unit prices within coffee in 2016.

Tea remains very popular in Taiwan, where there is a longstanding tradition of giving tea

products as gifts to friends, family members etc. However, in recent years growth in tea

consumption has been tempered somewhat by the increasing popularity of coffee. This trend

towards greater consumption of coffee was initially strongest among younger people, but has

since been embraced by Taiwanese consumers of all ages.




COMPETITIVE LANDSCAPE

Nestle Leading the Local Market

Nestlé maintained its leading position in coffee in 2016, with its overall retail value share

increasing slightly on 2015 to reach 24%. This company has a longstanding presence in

Taiwan, and it maintains a broad coffee portfolio. It is mainly focused on instant coffee,

where it remained the clear leader in 2016. Nestlé was also the dominant player in fresh

ground coffee pods in 2016, and aggressive advertising support for its brands continued to

play a key role in strengthening consumer interest in this category. During the review period,

Nestlé was among the companies that successfully tapped into the growing consumer

preference for more sophisticated coffee products.




Japanese UCC in Second Place, Uni-President Starbucks follows

UCC Coffee Taiwan Co Ltd was the second leading coffee player in retail value sales terms in

2016 with an overall share of 15%. Shanghai Uni-President Starbucks Co followed close

behind in third place with a retail value share of 14%. The value shares of both companies

were unchanged on 2015. Shanghai Uni-President Starbucks Co significantly expanded its

foodservice chain in Taiwan in 2016, and this helped to strengthen consumer interest in its

coffee products at the retail level.

US Kraft Food with large decline

Kraft Foods Taiwan Ltd posted the largest retail value share decline of any of the leading

players in coffee in 2016. This was mainly because it was only present in instant coffee,

where it offers the well-known Maxwell House brand, and remained absent from fresh coffee.

As a result, it was unable to capitalize on the growing consumer preference for fresh coffee

products towards the end of the review period.




International Brands in Taiwan

International players continued to dominate coffee in 2016 thanks to their well -established

brands, trusted reputations and superior capacity for new product development. With few

exceptions, local players occupied minor positions in the category, offering niche products at

higher price points.

There were a number of notable new launches in coffee over 2015-2016, with many seeking

to tap into growing consumer interest in fresh coffee. In late 2015, Illycaffè SpA introduced

new iperEspresso fresh ground coffee pods products for use with Cuisinart for Illy coffee

machines. In 2016, King Car Food Industrial Co Ltd became the first local player to enter

fresh ground coffee pods in Taiwan. 2016 also saw this company launch Mr. Brown Light

Roast Blend, a standard fresh ground coffee product that claims to contain higher than usual

levels of chlorogenic acid.




INTEREXCHANGE WITH GLOBE/ITALY FOR CAFFEE

Importation of Taiwan, Major Producer Countries for Coffee

Unit: million USD

Rk Country 2016 2016 1-9 2017 1-9 Share% Growth%

All Total 148.16 107.04 155.53 100% 45.298%

1 Viet Nam 2.24 1.54 24.58 15.803% 1,494.976%

2 USA 16.51 10.37 20.27 13.032% 95.393%

3 Indonesia 17.86 13.76 16.43 10.566% 19.393%

4 Brazil 18.10 14.08 15.02 9.656% 6.650%

5 Ethiopia 10.17 7.03 13.64 8.771% 94.054%

6 Colombia 10.37 7.98 9.96 6.401% 24.799%

7 Guatemala 10.55 8.73 9.58 6.157% 9.650%

8 Nicaragua 8.47 6.06 7.88 5.064% 29.971%

9 Japan 9.96 5.12 5.98 3.842% 16.712%

10 Malaysia 10.81 7.76 5.41 3.477% -30.299%

11 Italy 5.86 4.43 4.59 2.954% 3.611%

Source: BOFT, MOEA. Custom code: 0901

USA, Indonesia, and Brazil are consistent three major producers and suppliers for Taiwan, the

three countries have occupied over 33% of the importation market, while Viet Nam, the second

largest exporter country in globe for coffee, in 2017 becomes the biggest supplier, with over 15%

of market share.

Italy, instead, is in 11th place with about 3% of market share. Despite with little market share in

Taiwan, the Italian brands in Taiwan are not rare, and quite a few Italian brands are accessible in

Taiwan, such as ILLY, visible in all major supermarkets, and diverse brands entered the local

market by Taiwanese importers such as Pellini, Costadoro, Danesi, Bristot, Izzo etc…. while some

other brands are usually imported also by local agents with specific coffee machines such as

Lavazza.

Taiwan has the environment to cultivate coffee tree, however the island is not a major producer

country in globe for coffee, with growth surface about 1,100 hectares and only 800 tons

production per year, all from mid and south Taiwan. The local coffee is not competitive with

international brands because of price and cost, which is 4 to 5 times of those from major producer

countries.

Following the trend of coffee culture from the world, the local coffee in recent years is highly




popular and recommended with top money which cost over 6 euro a cup in general coffee shop

while the baked coffee beans with high quality costs over 150 euro a pound. Coffee from Gukeng

Yunlin is one of the most famous.

The major sale channels are usually direct sale from local producers which occupied about 30% of

all sale volumes, then from the Internet 14%, and then from coffee shops, about 10%. The local

coffee is not exportation oriented.

In 2012 USA TODAY, Taipei City was selected as one of the best 10 cities to have a cup of coffee, it is

also the only city selected in Asia. The government has also been promoting the local coffee for

years, holding diverse event and competitions, merging the agriculture with tourism. Judging from

large quantity of coffee shops emerging in Taipei, the coffee culture is running through the veins.

Exportation of Taiwan, Major Buyer Countries for Coffee

Unit: USD

Rk Country 2016 2016 1-9 2017 1-9 Share% Growth%

All Total 1,896,359 1,205,381 2,104,149 100% 74,563%

1 USA 626,120 375,099 859,290 40.695% 128.284%

2 China 546,647 273,806 489,440 23.261% 78.754%

3 Hong Kong 229,418 169,606 185,651 8.823% 9.460%

4 Malaysia 153,413 127,219 105,201 5.000% -17.307%

Source: BOFT, MOEA. Custom code: 0901




PROSPECTS

Retail volume grows maturely

While it is expected that coffee will continue to develop positively over the forecast period,

retail volume sales growth is likely to be tempered somewhat by increasing maturity. Retail

volume growth will be mainly driven by rising demand for fresh coffee products. Growing

exposure to more sophisticated coffee varieties in cafés and other on-trade outlets will

continue to play a key role in strengthening consumer acceptance of fresh coffee products at

the retail level.

Growth in coffee retail volume sales over the forecast period is expected to be stronger than

that recorded during the review period. A similar improvement is projected in terms of

growth in coffee retail value sales at constant 2016 prices. The performance of coffee as a

whole will continue to be lifted by growth in the popularity and availability of fresh coffee

products.




Foodservice Channel Competes

Competition from foodservice channels will be among the main potential threats to further

growth in retail coffee consumption over the forecast period. A majority of Taiwanese

consumers already eat out on a regular basis, partly due to busy lifestyles but also because

they have easy access to an abundance of inexpensive foodservice options. These include

competitively priced cafés and specialist coffee shops chains such as McCafé and City Café, as

well as street stalls/kiosks. In addition to being convenient, visiting foodservice outlets for

coffee also provides consumers with an opportunity to socialise with friends, co -workers etc.




Fresh Coffee expected to Expand

Fresh coffee, in particular fresh ground coffee, is expected to provide significant expansion

opportunities for both established players and new entrants over the forecast period.

Projected economic improvements in Taiwan should help to bolster purchasing power,

which will make many consumers more inclined to trade up to higher quality and more

expensive fresh coffee products.




MARKET DATA

Table 1 Retail Sales of Coffee by Category: Volume 2011-2016

Tonnes 2011 2012 2013 2014 2015 2016

Fresh Coffee 1,862.8 1,906.9 1,971.4 2,032.0 2,076.1 2,100.4

- Fresh Coffee Beans 1,681.6 1,716.9 1,768.5 1,810.0 1,842.0 1,851.8

- Fresh Ground Coffee 181.2 189.9 202.9 221.9 234.0 248.6

-- Fresh Ground Coffee Pods 1.4 6.9 17.0 32.7 40.9 50.3

-- Standard Fresh Ground Coffee 179.8 183.0 186.0 189.2 193.1 198.4

Instant Coffee 2,959.2 2,893.8 2,938.2 2,855.9 2,827.5 2,847.7

- Instant Standard Coffee 493.5 484.1 490.6 490.4 492.3 504.3

-- Regular Instant Standard Coffee 493.5 484.1 490.6 490.4 492.3 504.3

-- Decaffeinated Instant Standard Coffee - - - - - -

- Instant Coffee Mixes 2,465.7 2,409.7 2,447.6 2,365.6 2,335.2 2,343.5

-- Regular Instant Coffee Mixes 2,465.7 2,409.7 2,447.6 2,365.6 2,335.2 2,343.5

-- Decaffeinated Instant Coffee Mixes - - - - - -

Coffee 4,822.0 4,800.7 4,909.6 4,887.9 4,903.5 4,948.1

Source: Euromonitor International from official statistics, trade associations, trade press, company research,

store checks, trade interviews, trade sources




Table 2 Retail Sales of Coffee by Category: Value 2011-2016

TWD million 2011 2012 2013 2014 2015 2016

Fresh Coffee 1,487.7 1,568.0 1,673.9 1,792.9 1,872.3 1,956.3





Instant Coffee 2,038.7 2,018.3 2,022.4 2,012.2 1,998.6 2,035.3







Coffee 3,526.4 3,586.3 3,696.3 3,805.2 3,871.0 3,991.5






Table 3 Retail Sales of Coffee by Category: % Volume Growth 2011-2016

% volume growth 2015/16 2011-16 CAGR 2011/16 Total

Fresh Coffee 1.2 2.4 12.8

- Fresh Coffee Beans 0.5 1.9 10.1

- Fresh Ground Coffee 6.2 6.5 37.2

-- Fresh Ground Coffee Pods 22.9 104.6 3,489.6

-- Standard Fresh Ground Coffee 2.7 2.0 10.3

Instant Coffee 0.7 -0.8 -3.8

- Instant Standard Coffee 2.4 0.4 2.2

-- Regular Instant Standard Coffee 2.4 0.4 2.2

-- Decaffeinated Instant Standard Coffee - - -

- Instant Coffee Mixes 0.4 -1.0 -5.0

-- Regular Instant Coffee Mixes 0.4 -1.0 -5.0

-- Decaffeinated Instant Coffee Mixes - - -

Coffee 0.9 0.5 2.6






Table 4 Retail Sales of Coffee by Category: % Value Growth 2011-2016

% current value growth 2015/16 2011-16 CAGR 2011/16 Total




-- Fresh Ground Coffee Pods 24.4 107.9 3,786.8


Instant Coffee 1.8 0.0 -0.2




- Instant Coffee Mixes 0.6 -0.8 -3.8

-- Regular Instant Coffee Mixes 0.6 -0.8 -3.8


Coffee 3.1 2.5 13.2






Table 5 NBO Company Shares of Coffee: % Retail Value 2012-2016

% retail value rsp 2012 2013 2014 2015 2016

Nestlé Taiwan Ltd 22.7 22.8 23.2 23.2 23.6

UCC Coffee Taiwan Co Ltd 14.9 14.8 14.6 14.5 14.5

Shanghai Uni-President Starbucks Co 13.1 13.5 13.7 13.9 14.0

Kraft Foods Taiwan Ltd 13.3 12.8 12.1 11.4 11.1

Taiwan J & C Trading Co Ltd 5.8 5.6 5.3 5.0 4.9

Barista Coffee Inc 3.2 3.2 3.1 3.0 3.0

Leader Coffee Co 2.0 1.9 1.9 1.8 1.7

PresiCarre Co Ltd 1.4 1.3 1.2 1.1 1.0

Illycaffè SpA 0.1 0.3 0.5 0.7 0.7

Fanlatin Ltd 0.5 0.5 0.5 0.5 0.4

H2Way International 0.0 0.1 0.1 0.1 0.4

Pacific Acme Coffee Co 2.4 2.4 2.2 2.2 -

Melitta Unternehmensgruppe Bentz KG 0.3 0.3 0.3 0.3 -

Others 20.3 20.5 21.2 22.2 24.6

Total 100.0 100.0 100.0 100.0 100.0






Table 6 LBN Brand Shares of Coffee: % Retail Value 2013-2016

% retail value rsp Company (NBO) 2013 2014 2015 2016

Nescafé (Nestlé SA) Nestlé Taiwan Ltd 18.6 17.8 17.3 17.1

UCC (UCC Holdings Co Ltd) UCC Coffee Taiwan Co Ltd 14.8 14.6 14.5 14.5

Starbucks (Starbucks Corp) Shanghai Uni-President Starbucks Co 13.5 13.7 13.9 14.0

Maxwell House (Jacobs Douwe Egberts) Kraft Foods Taiwan Ltd - - 11.4 11.1

Mocca Taiwan J & C Trading Co Ltd 5.6 5.3 5.0 4.9

Barista Coffee Co Barista Coffee Inc 3.2 3.1 3.0 3.0

Nescafé Taster's Choice (Nestlé SA) Nestlé Taiwan Ltd 2.9 2.8 2.7 2.7

Nespresso (Nestlé SA) Nestlé Taiwan Ltd 1.0 1.8 2.3 2.6

Leader Leader Coffee Co 1.9 1.9 1.8 1.7

Nescafé Dolce Gusto (Nestlé SA) Nestlé Taiwan Ltd 0.4 0.8 1.0 1.2

Carrefour (Private Label) PresiCarre Co Ltd 1.3 1.2 1.1 1.0

Illy Illycaffè SpA 0.3 0.5 0.7 0.7

Lavazza (Lavazza SpA, Luigi) Fanlatin Ltd 0.5 0.5 0.5 0.4

Caffe Tiziano H2Way International 0.1 0.1 0.1 0.4

IS Deluxe Coffee Pacific Acme Coffee Co 2.4 2.2 2.2 -

Melitta

Melitta Unternehmensgruppe Bentz

KG 0.3 0.3 0.3 -

Maxwell House (Mondelez International

Inc) Kraft Foods Taiwan Ltd 12.8 12.1 - -

Maxwell House (Kraft Foods Inc) Kraft Foods Taiwan Ltd - - - -

UCC (UCC Ueshima Coffee Co Ltd) UCC Coffee Taiwan Co Ltd - - - -

Others Others 20.5 21.2 22.2 24.6

Total Total 100.0 100.0 100.0 100.0






Table 7 Forecast Retail Sales of Coffee by Category: Volume 2016-2021

Tonnes 2016 2017 2018 2019 2020 2021

Fresh Coffee 2,100.4 2,130.4 2,165.6 2,203.7 2,242.5 2,281.4





Instant Coffee 2,847.7 2,864.1 2,879.5 2,902.1 2,928.2 2,955.0







Coffee 4,948.1 4,994.6 5,045.1 5,105.8 5,170.6 5,236.4

Source: Euromonitor International from trade associations, trade press, company research, trade interviews,

trade sources




Table 8 Forecast Retail Sales of Coffee by Category: Value 2016-2021

TWD million 2016 2017 2018 2019 2020 2021

Fresh Coffee 1,956.3 2,019.9 2,093.1 2,167.7 2,242.5 2,318.1





Instant Coffee 2,035.3 2,038.5 2,042.8 2,046.5 2,049.9 2,052.0







Coffee 3,991.5 4,058.5 4,135.9 4,214.2 4,292.4 4,370.1


trade sources




Table 9 Forecast Retail Sales of Coffee by Category: % Volume Growth 2016 -2021

% volume growth 2016/17 2016-21 CAGR 2016/21 Total




-- Fresh Ground Coffee Pods 20.0 14.9 99.9


Instant Coffee 0.6 0.7 3.8




- Instant Coffee Mixes 0.1 0.3 1.3

-- Regular Instant Coffee Mixes 0.1 0.3 1.3


Coffee 0.9 1.1 5.8


trade sources




Table 10 Forecast Retail Sales of Coffee by Category: % Value Growth 2016-2021

% constant value growth 2016/2017 2016-21 CAGR 2016/21 Total




-- Fresh Ground Coffee Pods 20.7 16.1 111.3


Instant Coffee 0.2 0.2 0.8




- Instant Coffee Mixes -0.8 -1.0 -4.8

-- Regular Instant Coffee Mixes -0.8 -1.0 -4.8


Coffee 1.7 1.8 9.5


trade sources




ta ipe i@ice. i t

www. i ta ly in ta iwan.com

www. ice .gov. i t /as ia / ta iwan

L ' ICE -Agenz i a pe r l a p rom o z i on e a l l ' e s te r o e l ' i n t e r na z i o na l i z za z i o n e d e l l e im p re s e i t a l i a n e è s t a t a

i s t i t u i t a com e en te d o t a t o d i p e r s on a l i t à g i u r i d i c a d i d i r i t t o p ub b l i c o , s o t t o p o s t o a i p o t e r i d i i nd i r i z z o e

v i g i l a n z a d e l M i n i s t e r o d e l l o s v i l u pp o e co n om i co , d ' i n t es a c on i l M i n i s t e r o d eg l i a f f a r i es t e r i e se n t i t o i l

M i n i s t e ro d e l l ' ec o n om i a e d e l l e f i na n ze . L ' ICE -A g en z i a ha i l c om p i t o d i a ge v o l a r e , s v i l u pp a r e e

p rom u ov e re i r a pp o r t i e co n om ic i e com m e rc i a l i i t a l i a n i c on l ' es te r o , co n p a r t i c o l a r e a t t e n z i o n e a l l e

es i g e n z e de l l e p i cc o l e e m ed i e im p r es e , d e i l o ro co ns o r z i e r a gg r u p pam e n t i , e o p e r a a l f i n e

d i s v i l u pp a r e l ' i n t e r n a z i on a l i z za z i o n e d e l l e im p r es e i t a l i a n e n o nc h é l a c om m e r c i a l i z za z i o n e d e i b e n i e

se r v i z i i t a l i a n i n e i m e r ca t i i n t e rn a z i on a l i . A t t r av e rs o l a s e d e d i R om a , l 'U f f i c i o d i M i l a n o e l a re te n e l

m on d o l 'A g e n z i a sv o l ge a t t i v i t à d i i n fo rm a z i on e , as s i s te n za , p r om o z io n e a im p r es e e i s t i t u z i o n i .

L ' IC E - A g e n z i a o p e ra a l l ' es te r o n e l l ' am b i t o d e l l e Ra p p re s e n t a n z e d i p l om a t i c h e i t a l i a n e , i n s i ne r g i a c on l e

o rg a n i zza z i o n i im pr e n d i t o r i a l i e g l i a l t r i s og g e t t i p u b b l i c i e p r i v a t i i n t e r es s a t i , a ss i c u ra n d o u n s u p p o r t o

co o r d i na t o a l l e im pr e s e e re t i n a z i on a l i c he s i im p e gn a n o ne l p r o ce ss o d i i n t e r na z i o n a l i z za z i o n e c on

l ' ob i e t t i v o d i p r om u ov e r e l ' i m m ag i n e de l p r o d o t t o i t a l i an o ne l m o n do e l ' I t a l i a q u a l e d e s t i n a z i o n e d eg l i

i n ve s t im e n t i e s t e r i .

I C E - AG E N Z I A I TA U F F I C I O D I TA I P E I

other publications without authorization · other publications without authorization formosa taiwan...

Documents