How Coffee Consumption Trends Have Evolved
All across the globe, people sip coffee throughout the day either for its health benefits or for the social customs it has blended into. While the western market already had a strong coffee drinking culture, the Asian market for coffee too has become full of opportunities and very attractive.
International Market Coffee Consumption Trends
In the category of hot drinks, this market has historically been dominated by tea, but coffee consumption has grown exponentially in recent years. In Asia coffee consumption grew at a rate higher than 3.5% by 2015, keeping the positive trend of recent years to achieve a volume of over 15.5 million 60-kilo bags.
Some Asian countries such as Japan and South Korea already have a very developed coffee consumption culture. China, because of its large population and exponential growth of coffee consumption, represents a huge potential market. And in other emerging markets such as Indonesia, the Philippines, Thailand, Sri Lanka, Bangladesh, India and Malaysia, where 20 years ago there was no coffee consumption culture, coffee is becoming popular and creating market niches.
The trend that dominates the coffee sector is the growing attention to sustainability and specialty coffee. The sector has transformed from a principally ‘bulk’ market to a market increasingly characterized by an awareness of the implications of climate change, sustainability requirements in mainstream markets and new consumer demands.
The global organic coffee market is highly fragmented. Starbucks led the organic coffee category in 2014 with a retail value share of 8%. However, strong competition from other brands has pushed Starbucks’ share down over the past few years. Kicking Horse Coffee ranks second with a 7% share. Private label organic coffee, offering affordable premium products, is strong with a 19% share. Established brands such as Gevalia and Merrild also hold noticeable positions in the organic world. Nespresso and Nescafé, however, do not seem to be focusing on developing organic variants. Nestlé has other sustainability programs, such as its partnership with the Rainforest Alliance (RA). Some smaller coffee pod brands are emerging and are being marketed as organic coffee and Nespresso-compatible, which may attract some Nespresso consumers’ attention. In consumers’ minds, the current status of organic coffee pods appears to be as a niche product which is nice to have rather than being a must.