Report

Ethiopia Coffee Market Analysis

The Ethiopia coffee market is expected to grow from USD 516.37 million in 2025 to USD 551.17 million in 2026 and is forecast to reach USD 763.62 million by 2031 at 6.74% CAGR over 2026-2031. Momentum comes from the government's January 2025 coffee strategy that shifts value creation from raw-bean exports to roasted and specialty offerings, an urban youth demographic embracing convenient formats, and regulatory openness that draws foreign investment into processing and retail. Coffee holds a significant place in Ethiopian culture and daily life. Traditional coffee ceremonies not only drive domestic demand but also enhance the global reputation of Ethiopian coffee brands. The expansion of e-commerce and modern retail channels, such as supermarkets and online platforms, enables Ethiopian brands and cooperatives to reach consumers both locally and internationally. Competitive intensity is high but fragmented, encouraging cooperatives and private processors to fast-track vertical integration. Ethiopia's ambition to become the world's second-largest coffee exporter by 2033 underpins sustained capital inflows into milling, roasting, and digital traceability systems.

Ethiopia Coffee Market Trends and Insights



Booming RTD/cold-brew consumption

Urbanization and changing lifestyle preferences among Ethiopia's youth are driving a transformation in the domestic market, with ready-to-drink (RTD) coffee playing a central role. The Ethiopian Coffee and Tea Authority has highlighted RTD beverages as a major growth opportunity. In 2024, domestic coffee consumption in Ethiopia is anticipated to account for 50% of the nation's production, in contrast to other African countries that predominantly export raw coffee beans. Urban centers like Addis Ababa are seeing an increase in coffee shops and convenience stores offering cold-brew options. This expansion is supported by improvements in refrigeration and a modernized supply chain. USDA projects Ethiopia's coffee consumption to hit 3.7 million 60-kilogram bags by 2025, fueled by deep-rooted cultural ties, rising urbanization, and a surge in coffee shop openings. These trends align with global RTD coffee market dynamics, where convenience and portability are key factors for working professionals and students. By focusing on value addition, the government aims to position RTD coffee as a strategic initiative to secure higher profit margins from domestic production while reducing dependence on the volatile pricing of commodity exports.

Ethiopia moves to export more roasted coffee for value capture

Ethiopia's government is shifting from decades of dependence on raw coffee beans, now emphasizing processed coffee exports to secure higher prices. In February 2024, Ethiopia exported 200,000 bags (each weighing 60 kilograms) of coffee, according to the Information Commissioner's Office. The Ethiopian Coffee and Tea Authority is focusing on expanding roasting capacities, with new facilities planned in the Jimma and Guji regions to strengthen export preparations. This transition is advancing through international partnerships, such as MIDROC Investment Group's significant coffee marketing agreement with Neumann Kaffee Gruppe in March 2025, which provides access to global roasted coffee markets. Technological advancements, including a 75% efficiency improvement at Coffee Processing and Warehouse Enterprise using Sortex solutions, highlight scalable opportunities for enhancing coffee quality.

Limited domestic roasting capacity

Roasting infrastructure limitations are a major obstacle to Ethiopia's efforts to enhance value addition in its coffee sector. The current roasting capacity is inadequate to meet the government's objectives of increasing processed coffee production. Most roasting facilities in Ethiopia are located in urban areas, creating logistical difficulties for rural producers and limiting their access to value-added processing and retail distribution. To address this issue, the Ethiopian Coffee and Tea Authority has announced plans to build new coffee preparation facilities in the Jimma and Guji regions. However, these facilities are projected to become operational only by 2026. The infrastructure challenges are further intensified by unreliable energy supplies and transportation difficulties, particularly in remote coffee-producing regions where processing facilities could deliver the greatest economic benefits.

Other drivers and restraints analyzed in the detailed report include:

Rising demand for specialty and premium coffeeValue addition and processing innovationsLack of efficient market structure

For complete list of drivers and restraints, kindly check the Table Of Contents.

Segment Analysis

Instant coffee's 7.78% CAGR illustrates how convenience reshapes the Ethiopia coffee market. Instant coffee, known for its convenience and simple preparation with just hot water or milk, is gaining popularity among busy urban consumers and young professionals in Ethiopia, where coffee culture is evolving. Whole-bean offerings nevertheless retained 41.12% Ethiopia coffee market share in 2025, supported by traditional brewing customs. Ground coffee holds mid-range demand, and pod systems gain relevance as supermarkets diversify appliance aisles. The Ethiopia coffee market size attached to instant formats is projected to swell as AI-enabled sorting boosts granule consistency and flavor retention.

Processors invest in spray-drying and freeze-drying lines to commercialize local beans domestically, a shift exemplified by Garden of Coffee's urban boutique that now retails single-serve instant sachets. Imported RTD know-how merges with indigenous roasting techniques, blurring lines between specialty and soluble categories. New entrants leverage online channels to ship micro-lot instant coffee to consumers. Such dynamics signal that Ethiopia coffee market participants see soluble applications as vital to absorbing the climbing harvest volumes.

In 2025, plain profiles accounted for 70.55% of Ethiopia's coffee market share, reflecting the nation's culinary tradition that values unadulterated aromas. Ethiopia's rich coffee culture, deeply rooted in the traditional coffee ceremony, emphasizes plain, naturally brewed coffee. This cultural preference highlights the demand for unflavored, pure Arabica coffee, aligning with the country's longstanding taste and social practices. However, flavored variants, growing at a 7.7% CAGR, indicate evolving preferences among millennials seeking unique experiences. Cafes in Addis Ababa now offer chocolaty and spice-infused blends, often served with chilled milk to accommodate the warmer climate.

Producers utilize honey-processing and anaerobic fermentation methods to naturally enhance fruit notes while avoiding artificial additives, ensuring authenticity. Compliance with EU deforestation regulations is driving processors toward natural flavoring and traceable supply chains. This shift positions Ethiopian producers competitively against those relying on synthetic flavors. As discretionary incomes rise, flavored coffee lines are becoming premium options in Ethiopia's coffee market, reinforcing the trend of premiumization.

The Ethiopia Coffee Market Report is Segmented by Product Type (Whole-Bean, Ground Coffee, Instant Coffee, Coffee Pods and Capsules, Ready-To-Drink), Flavor (Plain, Flavored), Category Type (Conventional, Specialty), Bean Type (Arabica, Robusta, Others), Distribution Channel (On-Trade, Off-Trade), and Geography. The Market Forecasts are Provided in Terms of Value (USD) and Volume (Tons).

List of Companies Covered in this Report:

Belco Coffee Ya Coffee Nestle SA Kalbe International Square One Coffee Gera Coffee Garden of Coffee Hadero Coffee Wild Coffee Company Oromia Coffee Farmers Cooperative Union Tomoca Coffee Kerchanshe Trading Daye Bensa Yirgacheffe Coffee Farmers Cooperative Union METAD Agricultural Development Great Abyssinia Plc Conte Coffee Roaster Inc Bena Ethiopian Coffee Moyee Coffee Ethiopia Melange Coffee Roasters Pvt Ltd

Additional Benefits:

The market estimate (ME) sheet in Excel format
3 months of analyst support