Hot Drinks in Canada
Euromonitor International's Hot Drinks in Canada market report offers a comprehensive guide to the size and shape of the market at a national level. It provides the latest retail sales data, allowing you to identify the sectors driving growth. It identifies the leading companies, the leading brands and offers strategic analysis of key factors influencing the market - be they new product developments, packaging innovations, economic/lifestyle influences, distribution or pricing issues. Forecasts illustrate how the market is set to change.
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Tables: 55 | Publication date: Jul 2007
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive environment
Product coverage
Coffee; Other hot drinks; Tea
Executive summary
On-trade outlets help maintain hot drinks growth
Although the off-trade remains sluggish for hot drinks, total volume growth in 2006 was good, due to the rapid expansion of on-trade coffee outlets, such as Tim Hortons and Starbucks. By offering premium coffee – or, in the case of Tim Hortons, fresh coffee – and by creating a "third place" that consumers find welcoming between home and work, on-trade outlets managed to get consumers to shift their consumption out of home or away from their office. Tea and other hot drinks, in contrast, suffered flat growth in both the on-trade and off-trade channels.
Green tea begins to replace black tea as Canada's favourite tea type
Tea drinking is beginning to shift in Canada. Canada traditionally favoured standard black tea, due to the high number of immigrants from the British Isles. However, as this demographic ages, standard black tea consumption declines. In its place, younger consumers are being drawn to new varieties of tea. This is particularly true of green tea, which grew spectacularly over the review period, but even formerly fringe varieties of tea – such as white, rooibos and oolong – are being marketed by major brands like Tetley and Twinings. Green tea consumption is also increasing in older consumer segments, due to the tea's perceived health benefits and antioxidant properties.
Organic and fair-trade trends in foodservice spread to off-trade
On-trade outlets not only diverted sales away from the off-trade, they began to influence and boost sales in the off-trade as well. This was primarily through premium coffee: before Starbucks and similar speciality cafés, most coffee sold in Canada was ground and whole bean sales were marginal. By the end of the review period, most standard groceries feature whole bean "silos" and sales of whole beans are the fastest growing within coffee. Organic and fair-trade coffee, which first made an appearance in the on-trade, also began to spread to the off-trade, with organic off-trade coffee witnessing amazing growth during the review period. Speciality teashops, although limited, began to have an effect as well.
The mid-priced segment erodes as consumers trade-up or economise
Like many commodities, coffee and tea are seeing a stratification of their unit prices: sales are increasingly being divided between economy-priced products and premium products. For instance, in tea, sales 227g boxes of Orange Pekoe remain strong while small packets of rooibos tea also do well. In coffee, Maxwell House and private label hold the majority of sales, but Starbucks and high-end Van Houtte Inc whole bean coffee saw robust sales. The result is an erosion of the mid-priced segment.
The reason for this trend is the fact that consumers are beginning to feel the pinch of trading up. Although the strong economy encourages consumers to forsake value in exchange for convenience and an indulgent experience, many people from this group are also trying to save money on their everyday expenses. On-trade coffee outlets encourage consumption of high-end organic and fair trade coffees, but they also encourage consumers to buy private label for drinking at home in order to be able to afford the on-trade coffee.
Other hot drinks continues to be unimpressive
Other hot drinks remains small and marginal. Unlike other countries, Canada never warmed to malt-based drinks, and consumption is relatively restricted to consumers that emigrated from countries where this product is popular. Chocolate-flavoured hot drinks, in contrast, has a more broad-based appeal, but it is viewed almost exclusively as a wintertime indulgence. This makes it relatively immune to many trends – consumers are still willing to buy high-fat and high-calorie chocolate-flavoured hot drinks, despite growing health concerns – but it also means that there is not sufficient interest to spur future growth.
Table of contents
HOT DRINKS IN CANADA : MARKET INSIGHT
EXECUTIVE SUMMARY
On-trade outlets help maintain hot drinks growth
Green tea begins to replace black tea as Canada's favourite tea type
Organic and fair-trade trends in foodservice spread to off-trade
The mid-priced segment erodes as consumers trade-up or economise
Other hot drinks continues to be unimpressive
KEY TRENDS AND DEVELOPMENTS
Rising disposable income encourages premiumisation
Popularity of on-trade outlets boost both on-trade and off-trade consumption
Working consumers fuel the on-trade channel
Health concerns of variable importance across hot drinks
Supermarkets remain strong, but discounters continue to grow quickly
MARKET DATA
Table 1 Sales of Hot Drinks by Sector: Volume 2001-2006
Table 2 Sales of Hot Drinks by Sector: Value 2001-2006
Table 3 Sales of Hot Drinks by Sector: % Volume Growth 2001-2006
Table 4 Sales of Hot Drinks by Sector: % Value Growth 2001-2006
Table 5 Hot Drinks Company Shares by Value 2002-2006
Table 6 Hot Drinks Brand Shares by Value 2003-2006
Table 7 Penetration of Private Label by Sector 2002-2006
Table 8 Sales of Hot Drinks by Distribution Format: % Analysis 2001/2006
Table 9 Sales of Hot Drinks by Sector and Distribution Format: % Analysis 2006
Table 10 Forecast Sales of Hot Drinks by Sector: Volume 2006-2011
Table 11 Forecast Sales of Hot Drinks by Sector: Value 2006-2011
Table 12 Forecast Sales of Hot Drinks by Sector: % Volume Growth 2006-2011
Table 13 Forecast Sales of Hot Drinks by Sector: % Value Growth 2006-2011
APPENDIX
Imports, Exports and Net Supply
Table 14 Imports, Exports and Net Supply of Coffee and Tea 2000-2004
Published Data Comparisons
DEFINITIONS
LOCAL COMPANY PROFILES - CANADA
AL VAN HOUTTE INC - HOT DRINKS - CANADA
STRATEGIC DIRECTION
KEY FACTS
Summary 1 Van Houtte Inc: Key Facts
Summary 2 Van Houtte Inc: Operational Indicators 2004-2006
COMPANY BACKGROUND
PRODUCTION
Summary 3 Van Houtte Inc: Production Statistics 2006
COMPETITIVE POSITIONING
KICKING HORSE COFFEE CO LTD - HOT DRINKS - CANADA
STRATEGIC DIRECTION
KEY FACTS
Summary 4 Kicking Horse Coffee Co Ltd: Key Facts
Summary 5 Kicking Horse Coffee Co Ltd: Operational Indicators 2004-2006
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
COFFEE IN CANADA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 15 Sales of Coffee by Type: Volume 2001-2006
Table 16 Sales of Coffee by Type: Value 2001-2006
Table 17 Sales of Coffee by Type: % Volume Growth 2001-2006
Table 18 Sales of Coffee by Type: % Value Growth 2001-2006
Table 19 Standard vs Coffee Pods 2004-2006
Table 20 Instant Coffee by Speciality Type: Off-trade Volume 2004-2006
Table 21 Instant Coffee by Speciality Type: Off-trade Value 2004-2006
Table 22 Coffee Company Shares 2002-2006
Table 23 Coffee Brand Shares 2003-2006
Table 24 Foodservice Sales of Coffee by Distribution Format 2001/2006
Table 25 Forecast Sales of Coffee by Type: Volume 2006-2011
Table 26 Forecast Sales of Coffee by Type: Value 2006-2011
Table 27 Forecast Sales of Coffee by Type: % Volume Growth 2006-2011
Table 28 Forecast Sales of Coffee by Type: % Value Growth 2006-2011
TEA IN CANADA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 29 Sales of Tea by Subsector: Volume 2001-2006
Table 30 Sales of Tea by Subsector: Value 2001-2006
Table 31 Sales of Tea by Subsector: % Volume Growth 2001-2006
Table 32 Sales of Tea by Subsector: % Value Growth 2001-2006
Table 33 Fruit/Herbal Tea by Type: % Off-trade Volume 2005-2006
Table 34 Other Tea by Type: % Off-trade Volume 2005-2006
Table 35 Tea Company Shares 2002-2006
Table 36 Tea Brand Shares 2003-2006
Table 37 Forecast Sales of Tea by Subsector: Volume 2006-2011
Table 38 Forecast Sales of Tea by Subsector: Value 2006-2011
Table 39 Forecast Sales of Tea by Subsector: % Volume Growth 2006-2011
Table 40 Forecast Sales of Tea by Subsector: % Value Growth 2006-2011
OTHER HOT DRINKS IN CANADA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 41 Sales of Other Hot Drinks by Subsector: Volume 2001-2006
Table 42 Sales of Other Hot Drinks by Subsector: Value 2001-2006
Table 43 Sales of Other Hot Drinks by Subsector: % Volume Growth 2001-2006
Table 44 Sales of Other Hot Drinks by Subsector: % Value Growth 2001-2006
Table 45 Other Hot Drinks Company Shares 2002-2006
Table 46 Other Hot Drinks Brand Shares 2003-2006
Table 47 Forecast Sales of Other Hot Drinks by Subsector: Volume 2006-2011
Table 48 Forecast Sales of Other Hot Drinks by Subsector: Value 2006-2011
Table 49 Forecast Sales of Other Hot Drinks by Subsector: % Volume Growth 2006-2011
Table 50 Forecast Sales of Other Hot Drinks by Subsector: % Value Growth 2006-2011