According to the International Coffee Organization, coffee exports in the initial half of coffee year 2018 to 2019 (October 2018 to March 2019) witnessed an increment of 4.1% over the same period in 2017 to 2018, taking the total shipment to 63.15 million bags compared to the 60.63 million bags shipped during the same tenure in 2017 to 2018. Modern hectic lifestyles have altered traditional F&B consumption patterns with the advent of convenience foods targeting the ‘on-the-go’ food trend. The traditional approach to coffee consumption is witnessing a disruptive revolution with instant coffee capturing a major share in the market. Instant coffee enables people to make a cup of coffee by just stirring coffee powder into hot water. This market has abundant potential with lucrative demand from the millennial population which is driving the instant coffee market size to a staggering $2,968m as of 2018.
Instant coffee, owing to its powdered texture, has a higher shelf life as compared to coffee beans and ground coffee. Convenience in terms of storage and consumption is the major factor propelling growth of the instant coffee market which is estimated to be progressing at a CAGR of 6.13% during the forecast period 2019-2025.
Increasing disposable income is a major factor diverting traffic towards beverages. After bifurcating the global instant coffee market into regions, Europe was found to hold the maximum demand share of 32.40% in 2018. This can be attributed to the growing personal disposable income of residents as well as the presence of key coffee trading economies such as Germany, Switzerland, France, Italy, Belgium and Luxembourg. Some points supporting the argument-
· According to the Center for the Promotion of Imports (CBI) within the Netherlands’ Ministry of Foreign Affairs, approximately 74% consumers prefer instant coffee over fresh coffee in Europe.
· As per the Observatory of Economic Complexity (OEC), among the leading exporters of coffee, European countries like Germany ($2.25 billion) and Switzerland ($1.74 billion) hold the fourth and fifth spot, respectively. Imports are dominated by Europe with nearly 50% of the global import demand arising from the continent. The trend is led by Germany ($3.5 billion) which alone accounts for 11% of global coffee imports. With trade flourishing in this region, the European market has the ability to dictate market proceedings.
The instant coffee market is bifurcated majorly into spray-drying and freeze-drying, when segregated according to manufacturing processes. Spray drying involves the coffee extract being sprayed into a stream of hot air and being turned into a fine powder. Spray drying is the fastest growing market segment progressing at a CAGR of 5.69% going through 2025.
· Instant coffee has gained popularity with consumers owing to the ease it offers in terms of preparation, as compared to more traditional forms of coffee. Additionally, the high antioxidant content, people’s hectic lifestyles and the product’s low cost, have emerged as major growth drivers for the instant coffee market.
· Instant coffee manufacturers are introducing new coffee flavors in the market, such as green bean, mocha Italian roast, French vanilla, ginger-bread cookie, cardamom bun and chocolate caramel, in an effort to multiply their customer base. Furthermore, these value-added items are likelier to procure higher profit margins than basic products, thereby increasing profitability for manufacturers and contributing to the instant coffee market growth.
· Single serve packets, introduced by instant coffee market players such as Nestle, are changing consumption patterns for this sector. Single serve packets are more reasonable in terms of cost and are convenient for consumers, hence they fuel a strong demand in homes, cafés, restaurants and hotels. A major factor propelling their popularity is that they allow consumers to try out new flavors without spending on bulk packs.
· Tata Coffee Limited, a subsidiary of Tata Global Beverages Limited, in 2017, announced plans to establish an instant coffee manufacturing plant in Vietnam with an annual capacity of 5,000 metric tons. The investment is targeted towards leveraging the demand for instant coffee from the APAC region, which comprises a new generation of coffee drinkers influenced by western civilization.
· Instant coffee is high in acrylamide, a chemical compound that has been shown to cause cancer in animals, which has hindered the market growth. However, instant green coffee is witnessing incredible popularity among consumers, due to its lower caffeine content which offers countless health benefits, and helps in weight control or loss.. With such organic fronts, acceptance from brand-conscious consumers is increasing and augmenting the demand for instant coffee.
Some key players operating and innovating in the instant coffee market are Jacob Douwe Egbert, Keurig Green Mountain, Inc, Kraft Food Inc, Matthew Algie Company Limited, Nestle S.A, Starbucks Corporation, Strauss Group Ltd, Tata Global Beverages Limited, Tchibo Coffee International Limited, Unilever Plc, and Trung Nguyen.
Nestle Vietnam’s NESCAFE brand launched a new coffee product named NESCAFE Café Viet which incorporates instant and roasted blend coffee. The latest product extension was facilitated by Nestle’s Micronized Roasted Coffee technology.
The base year of the study is 2018, with forecast done up to 2025. The study presents a thorough analysis of the competitive landscape, taking into account the market shares of the leading companies. It also provides information on unit shipments. These provide the key market participants with the necessary business intelligence and help them understand the future of the instant coffee market. The assessment includes the forecast, an overview of the competitive structure, the market shares of the competitors, as well as the market trends, market demands, market drivers, market challenges, and product analysis. The market drivers and restraints have been assessed to fathom their impact over the forecast period. This report further identifies the key opportunities for growth while also detailing the key challenges and possible threats. The key areas of focus include the various types of merchandise in the global instant coffee market, and their specific revenue.
The Instant Coffee Market report also analyzes the major geographic regions for the market as well as the major countries for the market in these regions. The regions and countries covered in the study include:
• North America: The U.S., Canada, Mexico
• South America: Brazil, Venezuela, Argentina, Ecuador, Peru, Colombia, Costa Rica
• Europe: The U.K., Germany, Italy, France, The Netherlands, Belgium, Spain, Denmark
• APAC: China, Japan, Australia, South Korea, India, Taiwan, Malaysia, Hong Kong
• Middle East and Africa: Israel, South Africa, Saudi Arabia
1. Is the market for the instant coffee growing? How long will it continue to grow and at what rate?
2. Which type of systems presents the major growth opportunities?
3. Is there a possibility for change in the market structure over time?
4. Are additional developments needed for the existing product or services offerings or do the existing products meet the customer demands?
5. Do the key vendors look for partnerships to expand their businesses with respect to geography or product?
6. What are the short-term, long-term, and medium-term growth drivers for the market?
7. What are the short-term, medium-term, and long-term challenges for the market?
8. What are the short-term, medium-term, and long-term opportunities for the market
9. Who are the top players/companies of the market?
10. What are the recent innovations in the market?
11. How many patents have been filed by the leading players?
12. What are the types of patents filed by the leading players?
13. What is our Vision 2030 instant coffee market?
• Give a deep-dive analysis of the key operational strategies with focus on the corporate structure, R&D strategies, localization strategies, production capabilities, and sales performance of various companies
• Provide an overview of the product portfolio, including product planning, development, and positioning
• Discuss the role of technology companies in partnerships
• Explore the regional sales activities
• Analyze the market size and giving the forecast for current and future instant coffee market during the forecast 2019–2025
• Analyze the competitive factors, competitors’ market shares, product capabilities, and supply chain structures.