In 2020, work-at-home measures brought in as a response to curbing COVID-19 cases have positively impacted coffee sales in the retail channel in Malaysia. The increase in volume sales is also linked to Malays venturing out less often in their free time, as they seclude themselves from the virus, with retail gaining some coffee consumption previously taking place in foodservice outlets or institutions, many of which have temporarily closed or been offering takeaway and delivery only.
The bigger, more famous brands in retail are better-placed to perform better than others during the pandemic, supported by stronger supply chains and access to more customers. Moreover, they typically have superior marketing power to promote their products.
More than ever, consumers in Malaysia enjoy drinking coffee. While COVID-19 has brought major disruptions and challenges to local coffee shops, there is a growing trend towards consumption of artisanal and premium coffee products.
Coffee in the on-trade is poised for a gradual return to 2019 (pre-pandemic) levels by 2023 as the foodservice channel stabilises. It is highly unlikely for on-trade volume sales to bounce back quickly as social distancing measures are expected to linger for some time, in order to prevent further rises in COVID-19 cases.
Although traditional standard fresh ground coffee is set to remain the weakest performer in off-trade retail sales in 2021, due to many consumers returning to foodservice outlets, fresh ground coffee pods is predicted to maintain its double-digit volume growth throughout the forecast period. This projection is underpinned by the fact that this format is the quickest and easiest way for consumers to enjoy barista-style coffee at home.
The coffee category remains highly competitive, with a constant flow of new players seeking to capitalise on Malaysian consumers’ growing love of hot coffee. Some of the brands that are seeing an increasing presence in modern trade establishments include Key Coffee from Japan, Home’s Café Ipoh White Coffee, and Delica.
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Understand the latest market trends and future growth opportunities for the Coffee industry in Malaysia with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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This report originates from Passport, our Coffee research and analysis database.
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