Nordic by nature

The cold weather isn’t the only reason the Nordics drink so much coffee. Global Coffee Report explores the serious coffee culture behind the top consuming countries.

When Sonja Björk Grant thinks back to her introduction to coffee, she remembers her grandmother teaching her how to brew coffee as a youth. “Because Iceland has always had a huge culture around coffee, it’s one of the first things you learn to do,” explains Grant, who turned that early coffee lesson into a dynamic career and is somewhat of an icon in the global industry today.

That coffee culture she speaks of is actually quite prominent throughout the entire Nordic region, with all five of its countries having long histories with coffee and consumer cultures that evolved along the way.

For the past 10 years, Finland, Sweden, Iceland, Norway, and Denmark have ranked among the top 10 coffee consuming countries per capita, according to the International Coffee Organization (ICO). Finland consistently holds the No. 1 spot, and in 2010 and 2014, the countries snagged all five top spots.

According to the ICO, the Finns drank about 12 kilograms of coffee per capita in 2018, a volume that has remained stable on average for the past decade. Consuming the least among the Nordics, but still ranking ninth globally, the Danes drank 7.7 kilograms per capita in 2018.

While there are many factors supporting the region’s high coffee consumption – factors that are both consistent with global trends and unique to each country – it is worth noting the relatively small populations. Sweden hosts barely 10 million people, while Iceland has only 338,000; the others average about 5.5 million.

As such, the Nordic countries aren’t the top consumers of coffee when it comes to volumes consumed across total global production. But broken down by volumes consumed per individual, the Finns drink more coffee each day on average than anyone in the world.

The socialite
Coffee was introduced to the Nordics in the late 17th century, and became a mainstream staple over the following century. Then in the early 1900s, prohibition followed by high taxes on alcohol boosted coffee as the social beverage of choice.

Social settings and activities have since remained at the centre of coffee drinking there. With zero-tolerance drink-driving laws, partygoers often opt for coffee if they have to drive. Coffee shops are the go-to meeting place for clubs, communities, and social gatherings. And it’s practically obligatory to brew a fresh pot of coffee for any visitors.

“It was a mark of a good host and of status if you offered coffee,” says Tiina Jokelainen, President of Specialty Coffee Association Finland. She says that expectation has loosened over time in the bigger cities, but that it’s still strong in suburban and rural communities.

Grant confirms this obligation in Iceland, too, as well as the lexicon dedicated to it. “Kaffetår” means a “small cup of coffee”, while “tiú dropar” literally translates to “10 drops” and refers to an even smaller cup of coffee that is generally offered to someone stopping by only briefly.

Kaffitár is one of the largest coffee shop chains in Iceland and is where Grant got her start (as did many other award-winning baristas). Launched in 1990 by Adalheidur Hédinsdóttir, Kaffitár was one of the first specialty roasters and cafés in Iceland; it now has seven locations and a thriving B2B business.

In addition to coffee’s prominence in social settings, the workplace is where a lot of coffee is consumed. “People want better coffee at offices,” Hédinsdóttir tells Global Coffee Report, “and in general, salaries are already high, so instead of raises, employers might improve workplaces with premium coffee.”

Over the years, both women have actually led trainings at offices, banks in particular. “There’s quite a culture behind it there,” says Grant. “After being focused on money all day, they enjoy meeting in front of the espresso machine and talking about coffee – some with strong opinions.”

What’s more, three of the five countries have longstanding labour laws requiring paid coffee breaks. “Even schools have a coffee break,” Grant points out. “Obviously the children aren’t drinking coffee, but the break itself is called a ‘coffee’ break.”

Those aforementioned high salaries are also responsible for coffee’s rise to fame across the region over the centuries. When coffee first came to the Nordics, first to Sweden, only nobility could afford it. But during the 19th century, the working class became more affluent and gained access to coffee, explains Asser Christensen, a coffee blogger, instructor, and licensed Q Grader from Denmark.

Today, the five countries are among the top 25 wealthiest countries, according to the International Monetary Fund. So as premium coffee, high-end equipment, and craft coffee beverages permeate coffee-drinking countries around the world, the affluent Nordics have kept up.

On the menu
Despite coffee’s third wave moving through the five countries, all local experts point to “batch brew filter coffee”, i.e. standard drip, as the most popular. Again, Jokelainen says the bigger cities have seen the greatest shift away from traditional, with espresso-based drinks and other coffee beverages and brewing methods becoming increasingly popular. After filter coffee, Hédinsdóttir says lattes are the next favourite beverage at her cafés. Christensen estimates that about half of Danes prefer filter coffee; the French press is a distant second.

They also agree that preferences differ across generations. The older demographics are the heaviest drinkers of filter coffee, while the younger generations have been exploring third wave coffee and brewing methods. The latter have also been more interested in takeaway coffee, a concept that conflicts with the Nordic way of socialising over coffee but also supports consumption of filter coffee for its quick service.

Not unlike other bourgeoning coffee consuming nations around the world, “Starbucks has played a big role in our coffee industry,” Jokelainen tells GCR. “It has helped people learn about espresso-based drinks and specialty coffees. Starbucks has also helped change the way people think about takeaway coffee.”

But in Iceland, where the population and economy are too small for multinational chains, there is no Starbucks. In fact, Dunkin Donuts, Krispy Kreme, and McDonalds were all unsuccessful in the Icelandic market.

So when it came to introducing the country’s coffee drinkers to specialty coffee and espresso-based drinks, the learning curve was a bit steeper. Explains Grant, “Customers would come in and order a cup of coffee, but then I’d have to ask them if they wanted filter brew or espresso, and whether they wanted it for here or takeaway. They were like ‘Can I just have my cup of coffee? Why are you asking me so many questions?’

“We were introducing these foreign concepts, essentially trying to represent the environments at various coffee shops abroad, and people weren’t open to it [at first].”

In the other Nordic countries, various multinational chains and roasters have moderate representation, but the local behemoths dominate. According to Euromonitor, the three largest Norwegian players in retail coffee sales, Joh. Johannson Kaffe, Friele (owned by JDE), and Nestlé Norge, account for a significant combined share of sales.

In Finland, Gustav Paulig and Meira are the leading coffee manufacturers, though Starbucks and Nespresso also serve the market. Paulig is also the second-largest supplier of coffee to the Russian market, according to the Centre for the Promotion of Imports (CBI).

JDE and Nestlé subsidiaries also dominate Sweden, and German conglomerate JAB Holdings has an expanding presence throughout the Nordic region through local coffee shop chains Espresso House and Baresso Coffee.

Despite an increasing number of smaller players entering the market over the past decade, the Nordic coffee industry is concentrated overall. As such, significant changes in the competitive landscape are unlikely in the coming years, Euromonitor estimates. The global market research firm points to new product launches, strong investment in marketing activities, and private label products as key areas of strategic focus for major players to protect their competitive positions.

Consistent with the industry at large, major players are expected to continue expanding their portfolios through acquisitions, specifically to tap into the Nordics’ budding specialty market.

Specialty moves in
The Nordic specialty scene had a slower start compared to other parts of Europe, but it is slowly gaining speed in each of the five countries. This is evident in the growing number of specialty roasters and coffee shops, which is then fuelling consumption of higher-quality coffees. In Finland in particular, import values grew at a strong average annual rate of 7.1 per cent from 2013 to 2017, according to CBI, while volumes have been increasing much slower on average. CBI links this comparatively strong growth in value to expansion of the specialty market.

Although the region has always trended toward higher-grade arabica coffee, Christensen says the specialty coffee market exists in its “own little bubble outside the general coffee culture”, popular among trendy young people. He says the majority of coffee consumers buy standard grounds at supermarkets to make filter coffee at home.

Jokelainen credits SCA Finland for helping the specialty market garner more attention. Among other efforts, the organisation helps produce an annual Coffee Festival in Helsinki that it touts as the “biggest coffee festival in the Nordics”.

Meanwhile, Norway is responsible for the global competition scene buzzing today and World Coffee Events (WCE), which operates under greater SCA. In 1998, Alf Kramer, who was also a founding member and the first president of SCA Europe (before it merged with the United States), curated a global group of passionate coffee individuals to launch a competition that would help “bring awareness to our craft”. Grant and Hédinsdóttir were among those.

The first World Barista Championships (WBC) was held in 2000, hosting 17 competitors in Monte Carlo. “The original idea was to [resemble] the Olympics, with different categories and with rules from gymnastics and horse-riding competitions,” Grant tells GCR. As the competition expanded beyond WBC – seven events currently – WCE was formalised in 2011.

With WBC’s roots in Norway and strong Nordic representation across the founding team, naturally the majority of competitors, and thus winners, were from the region’s five countries. In the first six years in particular, they consistently placed in the top six, with Norway, Iceland, and Denmark leading the pack.

But as both the event and the specialty coffee scene gained greater notoriety on a global scale, WBC and its pool of competitors expanded in size and reach. Simultaneously, Grant and Jokelainen say there was an attitude change among the Nordics when competing required greater effort. “In the past it was easier to win because it was so simple,” says Grant, pointing to the many years of practice and training it now requires. “And because it’s all volunteer, I think [Nordic people] don’t see the value of putting the time and effort into it anymore.”

Grant hates to see her home country and the greater region lose its recognition on the global stage, but she sees potential among her Nordic cohorts if they want to reclaim their titles. “With a little bit of help and money and a three-year plan, there are competitors here who I think could do it.”

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