Competitor Strategies in Hot Drinks

May 2022

The global hot drinks industry continues to grow strongly even as it navigates continued disruptions from the pandemic, supply chain issues, and geopolitical trouble. Slowing M&A activity means that coffee should see a quieter competitive landscape in the near future, while tea deals with the effects of Ekaterra replacing Unilever as the largest global player. All hot drinks companies alike will face a challenging next few years as they respond to inflationary pressures, sustainability challenge

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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.


Scope of the Report


Industry Overview

The top 10 companies in global retail hot drinks
Pure-play is rare but becoming more common in hot drinks
The last decade has seen considerable M&A activity
Developing regions growing in importance
Developing region growth will necessitate further rebalancing
There is stability at the top of global hot drinks
Inflation has largely been passed on to the consumer so far
What is the exposure of the major players to the war in Ukraine?
The uneven road to net zero

Key Players – Coffee

Map: Market leadership in retail coffee
Four major groupings now dominate in global coffee
Nestl é’s dual-track approach dominates global coffee
JDE Peet’s reinvents itself again with public listing
JDE Peet’s within the larger JAB coffee empire
Lavazza grows to keep up with its rivals
Coca-Cola broadens its ambitions in coffee
The North American giants: Keurig, Kraft Heinz and JM Smucker
The competitive landscape for coffee: The future outlook

Key Players – Tea

Map: Market leadership in retail tea
The global tea market has a pyramid-like shape
Ekaterra is new, but the challenges it faces are old
Tata faces similar challenges to Ekaterra
Orimi will tighten control of an isolated CIS market
Unilever remains a major player but in a new form
The competitive landscape for tea: The future outlook


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