Instant Coffee Market Research Report: Information by Category (Traditional and Decaffeinated), Type (Freeze-Dried and Spray-Dried), Distribution Channel (Store-Based and Non-Sore-Based), and Region (Europe and North America) - Forecast till 2030

Instant Coffee Market Overview

The Instant Coffee Market is expected to grow USD 20.04 billion at a CAGR 5.16% During Forecast 2030. Another name for instant coffee is soluble coffee. Instant coffee is also referred to as coffee crystals and brewed coffee beans. It’s easy to make instant coffee. All you have to do is add hot water to the crystals and you will end up with liquid hot coffee. The instant coffee market can be divided into two parts:  spray dry and freeze-dried.

COVID-19 Analysis of Instant Coffee Market

COVID-19 wreaked havoc around the world. It proved to be a dangerous disease. Most people who got it recovered fine. Some of the people who got it were hospitalized and approximately 1% of the people who got it died from it. Many of the people who recovered developed life-long complications like strokes and diabetes. Some of these people also became reinfected with COVID-19 because the antibodies only lasted for a few months.

Governments around the world responded by imposing lockdowns and quarantines. These were temporary since they had limited effect. Many markets and industries were negatively affected. The instant coffee market was one of these. Many processors of instant coffee found it difficult to source coffee beans at affordable prices since agricultural output dropped in the nations that produced coffee. Many of these bore the brunt of COVID-19.

Market dynamics

Drivers

• What is driving demand and hence growth in the instant coffee market is an insatiable demand for instant coffee. People are busy and don’t have the time to do the grinding of coffee beans that are needed to make the coffee powder that’s needed to make coffee.


• Another factor that’s driving growth in the instant coffee market is the lower costs of transporting coffee. It’s far easier and much more cost-efficient to transport instant coffee powder since it weighs less and takes up much less room than coffee beans do.


• Many people who belong to the middle classes in developing nations are falling in love with instant coffee. This is also what’s driving growth in the market.


• Also, instant coffee is increasingly being marketed in convenient single-serve packets. Many people like this since they don’t have to face the headache of measuring the right amounts of coffee when brewing it.


• A key growth factor is an innovation. It’s an innovation that allows the manufacturers and processors of instant coffee to stoke growth by coming up with innovative ways to instant coffee market.

Opportunities

Many instant coffee processors and manufacturers are seizing upon this fairly lucrative market by investing in new equipment, machinery, and technologies that will allow for faster and more efficient grinding of coffee beans. The objective is to increase quality and output while retaining more flavor.

Restraints

A key restraint for the instant coffee market lies in the fact that most people in Asian nations prefer to drink tea in the morning instead of coffee.

Challenges

A key challenge for the instant coffee market lies in producing a better quality product, keeping output high, and keeping the retail price of coffee at an affordable level for most people around the world.

Technology Analysis

Starbucks is a major American company. It has managed to retain its superior position by venturing into the instant coffee market. Starbucks has managed to increase output and be innovative by launching a variety of flavored instant coffee brands. The company has improved upon the quality of these brands while doing all of this. The result is products like Starbucks Premium and Starbucks Instant Coffee.

Segment Overview

By category

The instant coffee market can be separated into the following sub-segments by category:

• Traditional


• Decaffeinated

By type

The instant coffee market can be separated into the following sub-segments by type:

• Freeze-dried


• Spray-dried

The spray-dried sub-segment dominates the segment. The reason being that it is more affordable for the masses.

By Distribution Channel

The instant coffee market can be separated into the following sub-segments by distribution channel:

• Store-based


• Non-store based

By Region

The instant coffee market can be separated into the following sub-segments by region:

• North America


• The European Union


• Asia-Pacific


• The rest of the world

The North American market can be further separated into the United States, Canada, and Mexico. The European Union market can be further separated into Germany, France, Italy, Spain, the United Kingdom, the rest of Europe.

The Asia-Pacific region can be further separated into China, India, Japan, Australia, New Zealand, and the rest of Asia.

The rest of the world can be separated into South America, the Middle East, and the rest of the world.

The European Union leads in terms of market share. The reason is that Europeans have a long-standing (centuries-old) tradition of drinking coffee. Therefore, people in Europe increasingly demand instant coffee - it’s cheap and easy.

That said, the Asia-Pacific region has the highest regional CAGR. The reason for this is that the middle classes are expanding rapidly. They have westernized and international tastes and are increasingly clamor for instant coffee. Coffee barista joints like Coffee Day are becoming popular in India and China. Young people love to frequent these joints, order coffee and socialize.

There is a growing yuppie culture among the rapidly expanding middle classes in India and China. They want to get innovative in terms of their coffee tastes. That’s why flavored coffee sales are taking off in the Asia-Pacific region. India and China have huge populations, and these make up the bulk of populations in the entire Asia-Pacific region.

Lifestyles and preferences are changing in the Asia-Pacific region especially. That’s part of the reason why people want to buy many more brands of instant coffee market than their parents did. That said, most people prefer to buy fresh coffee. This is the case in India and China. It turns out that most people in these nations don’t belong to the middle class.

The European Union and North America have 5.16% CAGRs because the tradition of drinking coffee is well established in these two regions. Therefore, the markets are saturated in terms of instant coffee brands.

Competitive Landscape

The instant coffee market is very competitive. That’s because there are some barriers to entry. Most of the market share belonged to a few very big companies. Nestle was one of these. This company holds more than half of the market share.

Many companies find that they have to resort to many different methods to remain competitive in the instant coffee market. These are:

• Invest heavily in research and development


• Merge with and acquire other companies


• Enter into strategic partnerships with other companies

When companies invest heavily in research and development they invest in their futures and expand their horizons. This is because they come up with and launch innovative products with more innovative and useful applications. These products also appeal to the taste buds and palates of the increasingly picky customer.

When companies merge with and acquire other companies, they increase their overall resource pool. This allows them to invest heavily in research and development. This allows them to develop newer products that are more innovative and of higher quality. They can also invest more in marketing and especially digital marketing. This allows them to penetrate new markets more efficiently. They can easily gain new customers in these markets using various marketing strategies.

They can also consolidate their positions in existing instant coffee market and gain new customers in these markets. In general, companies that participate in mergers and acquisitions face a win-win situation.

Companies realize the same benefits when they enter into strategic partnerships as they do when they enter into joint ventures.

Nestle is a Major company. It has managed to create and retain a superior market position by investing heavily in research and development. The result has been phenomenal. Nestle has been able to launch a new generation of more innovative products that appeal to customers’ palates better. It has seen a dramatic increase in sales of instant coffee because of this.

List of Companies

• Nestlé SA (Switzerland)


• Starbucks Corporation (US)


• Jacobs Douwe Egberts BV (Netherlands)


• Strauss Group Ltd (Israel)


• Matthew Algie & Company Ltd (Scotland)


• Kraft Foods Group, Inc. (US)


• Tata Global Beverages Ltd (India)


• Tchibo Coffee International Ltd (US)


• Unilever Plc (UK)


• Keurig Dr. Pepper (US)

Recent Developments

• Nestle expands its R&D facilities in Singapore.


• Nestle buys out the Bountiful company in terms of its brands.

Report Overview