Coffee in Malaysia

PROSPECTS

Consumers demonstrate increasingly sophisticated demand in coffee, players expand upmarket ranges

More than ever consumers in Malaysia enjoy drinking coffee. This is true not just in local coffee shops, but there is also a growing trend towards consumption of artisanal and premium coffee products.

Fresh ground coffee pods offer both convenience and perceived quality, while foodservice shifts from fresh ground coffee to beans

Although traditional standard fresh ground coffee saw weaker performance growth in off-trade sales due to rising out-of-home coffee consumption, fresh ground coffee pods saw continued strong growth at double-digit rates in 2019. This was underpinned by the fact that this format is the quickest and easiest way for consumers to enjoy barista-style coffee at home.

January 2019 smoking ban has adverse impact on consumer foodservice

Business for local coffee shops was mildly impacted by the smoking ban implemented at eateries from January 2019. The Malaysian Indian Muslim Restaurant Owners Association said its members reported a decline in business following the start of the ban.

COMPETITIVE LANDSCAPE

Nestlé fails to gain share despite investments in Nescafé rebranding

Nestlé (M) Bhd, the largest player in the coffee category, implemented aggressive marketing and branding activities at the end of the review period. It launched a new look and rebranding of its Nescafé Gold Blend regular instant coffee.

Power Root gains share through investment in distribution

In contrast to Nestlé, Power Root (M) Sdn Bhd saw a value share gain in 2019. The company reduced marketing activities and focused on enhancing distribution in order to drive growth.

Players need to differentiate in increasingly competitive environment

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.

Files are delivered directly into your account within a few minutes of purchase.