Competitor Strategies in Hot Drinks

Key Findings

Pure-Play is rare but becoming more common in Hot Drinks

The creation of Ekaterra creates a new pure-play tea company, putting it among the minority of leading global hot drinks companies that focus only on hot beverages. The newly created JDE Peet’s is the largest of these, although it operates within the framework of JAB Holdings (which has extensive interests elsewhere, notably beauty and pet care). Lavazza is the other major pure-play hot drinks player in the global market.

Nestlé, the dominant force in hot drinks, has extensive interests across food and beverages. This is also true of Unilever, which is much shrunken in size since the formation of Ekaterra but remains a powerful force in global hot drinks, as well as Associated British Foods.

There are three companies in the top 10 that are almost exclusively focused on North America (Kraft Heinz, JM Smucker and Keurig Dr Pepper), and for all three hot drinks are a minority of sales. Keurig Dr Pepper is focused primarily on soft drinks, whereas the other two are usually considered to be packaged food companies.

The most unusual situation is that of Tchibo, which combines its coffee operations with an international chain of retail stores which sell a wide variety of non-coffee goods. Tchibo’s coffee can be found in a wide variety of retail outlets apart from those directly run by the company.