A combination of surging inflation, international turmoil and growing consumer demand headwinds add up to a challenging environment for hot drinks manufacturers. This report offers insights on navigating this new reality, alongside updated forecasts.
This report comes in PPT.
Inflation has driven the largest shifts between updates in H1 2022, with the war in Ukraine contributing to surging prices in nearly every major market, as both fuel and agricultural commodity supplies are impacted.
Thus far, coffee and tea manufacturers have largely been able to pass on price increases to consumers, compensating for higher input costs with relatively little impact on volumes.
Going forward, retail demand could benefit from consumers trading down from premium away-from-home options. At the same time, lower priced away-from-home solutions, such as advanced vending machines and takeaway-only outlets, are expected to expand further, closely tied to smartphone ordering.
Higher costs for energy, fuel and other commodities, coupled with central banks’ efforts to combat inflation from the demand side, will dent disposable incomes, potentially impacting hot drinks sales in value terms, even as volumes remain relatively steady.
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