Making a case for coffee
The global coffee market continues to percolate and a new study reveals that Asia is playing a key role in its growth.
The research from Mintel reveals that three out of the five fastest growing retail coffee markets are in Asia. Indonesia is currently the fastest growing packaged retail coffee market with a compound annual growth rate (CAGR) of 19.6 per cent over the past five years, while India has a CAGR of 15.1 per cent and Vietnam 14.9 per cent.
The boom in Asia’s coffee market has been driven by a surge in innovation of coffee products. According to Mintel’s Global New Products Database (GNPD), between 2011 and 2016 the number of new coffee products launched in Asia has risen by 95 per cent. In comparison, the number of tea products launched rose by a comparatively low 55 per cent over the same period.
Jonny Forsyth, Global Drinks Analyst at Mintel, says, “The global coffee industry continues to experience healthy growth, driven by Asian markets in particular. Asia has far more growth potential as traditionally tea-drinking consumers are converted slowly but surely into coffee drinkers. In 2016, there was also an increasing number of coffee launches that blurred the boundaries between coffee and tea. A tea-drinking culture is the biggest barrier to coffee in Asia, and tea-coffee hybrids can be used to tempt consumers.”
In terms of local tastes, currently Asia Pacific leads the way in launches of ready-to-drink cold coffee. In 2016, 29 per cent of all coffee launches in Asia Pacific were ready-to-drink cold coffee products, compared to just 10 per cent in Europe. Additionally, coffee mixes are a huge part of the retail coffee landscape. In the same year, instant coffee mix accounted for 16 per cent of all retail coffee launches in Asia, up from 12 per cent in 2014.
“As emerging market consumers develop a taste for coffee, innovation is stepping up a notch with drinkers trading instant for fresher-tasting coffee. However, despite increased premiumisation in the global coffee market, the most commodified form of coffee – soluble coffee granules – remains a hugely important segment, especially in Asia. As consumers trade up from instant coffee, pod and capsule sales will increase,” Forsyth adds.
