Chicory, Mate, and Beyond: Opportunities in Traditional Plant-based Hot Drinks

Category is concentrated in only a few geographic areas

In many places in the world, other plant-based hot drinks are not consumed in any significant quantities, but where they are consumed they tend to play important roles. Most global sales occur in just a handful of markets. China is by far the most important, with over half of global category sales by itself, but Argentina, Russia and South Africa also play major roles.

Consumption is heavier among older populations, but younger ones drive growth

Because of their traditional nature, many of these beverages are much more popular among older consumers. Among younger people the category is under more pressure from coffee and tea. However, the category is growing most quickly in places where it is maintaining its appeal to younger consumers.

Market structure is highly fragmented and regionalised

With the notable exception of Nestlé, nearly every big player in the category is focused nearly exclusively on a single market. It is rare for most companies in this category to look any further afield than neighbouring and culturally similar countries.

Different subcategories face very different futures

While some plant-based products such as yerba mate are now nearly entirely dependent on population increases to grow the market, others are successfully expanding to new populations and new markets. Chicory, for example, is expanding in Africa, while fading away in its home market of France.

Health and wellness aspect needed to grow category

In order to broaden its appeal to younger people and consumers in developed markets, the category will need to promote the naturally healthy properties of most plant-based hot drinks. The most successful approaches keep the traditional aspect prominent, but add a modern twist such as nutrient fortification or packaging for on-the-go consumption.