The total volume consumption of hot drinks is set to see a slow increase in 2022. However, various COVID-19-related restrictions, which have seen the closure and/or decreased capacity of many foodservice outlets throughout China in this year, are expected to result in a further year of decline for foodservice volumes of hot drinks.
Overall hot drinks is expected to see slow growth in China in 2022, with retail volume growth across all categories. Within tea, fruit/herbal tea is set to continue to see high single-digit growth in retail volume and current value terms in 2022.
Although the competitive landscape for hot drinks is expected to remain highly fragmented in 2022, this is not true in the coffee category. The leading player in this category, Nestlé, is expected to account for more than two thirds of retail volume sales, maintaining its dominance thanks to its exceptional position within instant coffee.
The current leading retail channels in hot drinks in China are food/drink/tobacco specialists, small local grocers, supermarkets, hypermarkets, and e-commerce. Hypermarkets and neighbourhood supermarkets were often the most popular places for consumers to purchase daily necessities before the pandemic.
In 2022, retail is expected to continue to dominate volume sales of hot drinks, with foodservice accounting for only a mid-single-digit volume share. The major trend in 2022 has been the fact that lockdowns and dine-in restrictions have shifted further consumption volumes from foodservice to retail.
In retail volume and current value terms, the growth rates of hot drinks are anticipated to be on a positive but decelerating trend over the course of the forecast period, as the consumer demand for hot drinks is expected to stabilise. Due to the move to at-home consumption during the pandemic, habits are unlikely to wane in the short term, especially in coffee, as consumers have invested in creating an at-home café experience through the purchase of coffee machines and fresh ground coffee and coffee pods.
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This is the aggregation of Coffee, Tea, and Other Hot Drinks.See All of Our Definitions
This report originates from Passport, our Hot Drinks research and analysis database.
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