Africa represents the fastest growing global market for retail hot drinks. This report explores the drivers of rapidly growing consumer demand for coffee, tea and other hot drinks, with a focus on key categories of growth over 2014-2019. It analyses the varied consumer preferences of African markets, with profiles of selected new products and specific future category opportunities.
Africa was the fastest growing global region for retail sales of hot drinks in value terms between 2009-2014. The majority of volume and value is consolidated in relatively stable, high-value markets of North Africa, East African coffee and tea producing countries (Ethiopia, Uganda and Kenya) and South Africa.
GDP and income growth drove retail sales of hot drinks during the review period, with strong prospects over the forecast period. A young population and increasing urbanisation also accelerated the adoption of retail, packaged hot drinks and on-trade consumption, creating opportunities for hot drinks brands that are properly segmented in terms of price/package mix.
Leading markets in Africa demonstrate clear, historic preferences for either tea or coffee, with an established base of low-priced domestic brands in leadership positions. However, the continent’s young population may shift preferences towards new tea blends and coffee.
Retail distribution of hot drinks in Africa is extremely varied, ranging from 88% of retail value through traditional channels in Nigeria to 80% of value through modern channels in South Africa. Channel distribution format shapes new brand opportunities.
High value, convenient instant coffee represents a strong growth opportunity for multinational brands in Africa, with fruit/herbal and green teas also showing signs of growth among affluent consumers. Additionally, the region’s young population creates opportunities in flavoured/functional powdered beverages.
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