by Instant coffee is a dry beverage produced by dehydrating coffee brewed from roasted coffee beans or ground coffee particles. It can be produced via two main methods i.e. spray drying and freeze drying. Some key advantages of instant coffee include its affordability, easy preparation with just hot water, and longer shelf life compared to ground coffee or whole beans. The growing millennial population preferring convenience foods combined with rising spending power on food products in developing nations has significantly boosted the demand for instant coffee globally in recent years. The global Instant Coffee Market is estimated to be valued at US$42.05 billion in 2023 and is expected to exhibit a CAGR of 8.4% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
One of the major trends in the instant coffee market is the increasing demand for premium and flavored instant coffee products with organic, natural and health attributes. Consumers are willing to pay more for boutique instant coffee brands that offer exotic flavors such as caramel, vanilla, chocolate, mint etc. along with clean label and natural claims. Prominent players are launching new instant coffee lines targeting health-conscious demographics with no added sugar, low sodium, caffeine-free, and organic options. For instance, Mount Hagen has launched an instant coffee collection with zero sugar and zero sodium. Another key trend gaining ground is the adoption of sustainable packaging for instant coffee. Leading brands have started offering instant coffee pouches, stick packs and single-serve sachets made from recyclable materials like aluminum and paper to appeal to environmentally conscious buyers and strengthen their sustainability credentials.
Porter’s Analysis
Threat of new entrants: The threat of new entrants in the instant coffee market is moderate. Established brands have strong brand loyalty which creates barriers. However, startups can introduce inexpensive private label products.
Bargaining power of buyers: The bargaining power of buyers is high due to availability of substitutes. Buyers can switch to alternatives like ground coffee, pods, and tea based on price and promotion.
Bargaining power of suppliers: The bargaining power of suppliers is moderate. Major suppliers include coffee bean suppliers and packaging material providers. Suppliers may switch if better prices are offered by competitors.
Threat of new substitutes: The threat of substitutes is high. Alternatives like ground coffee, pods, and tea poses high threat. Consumer preference for different beverages is a challenge.
Competitive rivalry: The competitive rivalry is high amongst established players. Companies compete based on quality, flavors, promotions, and pricing.
Key Takeaways
The Global Instant Coffee Market Size is expected to witness high growth in the forecast period owing to rising health awareness, changing lifestyle and increasing disposable income.
Regional analysis: Asia Pacific region dominates the instant coffee market and is expected to grow at the fastest rate during the forecast period. Countries like India, China, Japan and South Korea are major markets due to rising urban population, growing coffee consumption and inclination towards convenience foods.
Key players: Key players operating in the instant coffee market are Nestle S.A, Starbucks Corporation, Jacobs Douwe Egberts, Strauss Group Ltd., Matthew Algie & Co. Ltd., and Tata Global Beverages. These brands focus on expanding their international presence by launching products customized to regional tastes. They also adopt strategies like mergers, acquisitions and partnerships for market share growth.
Ravina Pandya, Content Writer, has a strong foothold in the market research industry. She specializes in writing well-researched articles from different industries, including food and beverages, information and technology, healthcare, chemical and materials, etc. With an MBA in E-commerce, she has an expertise in SEO-optimized content that resonates with industry professionals.
