COFFEE MARKET ANALYSIS

Market Challenges And Opportunities

Global Coffee Market Opportunities:

Increasing focus of key players on introducing new product with innovative packaging is expected to serve major growth opportunities. For instance, in May 2020, Nespresso launched its first coffee capsules made using 80% recycled aluminum. These capsules were made from 95% recycled material earlier this year in March. Further, by the end of 2021, Nespresso targets to have all machines sold in this new packaging, which, in turn, will boost the market growth of coffee.

Growing popularity of ready-to-drink coffee is creating potential opportunities for key players. In September 2022, TH International Limited, the exclusive operator of Tim Hortons coffee shops in China ("Tims China"), announced the launch of two co-branded ready-to-drink (RTD) coffee products in partnership with Sinopec's Easy Joy, China's largest convenience store chain.

Global Coffee Market Drivers:

Increasing working population uplifting the presence of coffee houses

Growing adoption of western culture due to globalization and increasing penetration of coffee brands are key factors expanding coffee chains worldwide. Recently, coffee shops have experienced strong growth as outlets gained popularity as hangout zones for family, friends, colleagues, and business associates, among others. Moreover, the emergence of premium stores from companies such as Starbucks Corporation, Coffee Day Enterprises Ltd, and Barista Coffee Co Ltd, among others increased adoption of coffee, thereby fueling the market growth.

Global Coffee Market Restraints:

Change in climatic conditions impacting coffee plantations

A 2011 study reported that the coffee berry borer, Hypothenemus hampei, appeared to be thriving under warm conditions. The pest, which probably originated in Central Africa, spread to all coffee-producing regions in the world, except China and Nepal. Notably, the damage in coffee beans is causing losses of more than USD 500 million per year.

Growing popularity of tea as healthier alternative drink

Growing awareness about the health benefits of tea, premiumization of tea, increasing on-the-go convenience trends with regard to ready-to-drink (RTD) tea, and demand for herbal tea are key factors boosting the market share of tea market.     However, growing adoption of western culture is expected to open new market avenue.