Hot Drinks in Georgia

Improving quality and provenance support improving performance of hot drinks

Improving quality and provenance were two trends which had a positive influence on the performance of hot drinks in Georgia in 2019. While an optimistic economy and increasing tourism encouraged higher foodservice volume growth for coffee in particular, and other hot drinks, with consumers visiting the increasing number of specific, coffee-orientated foodservice outlets, tea continued to be supported by the high number of ethnic Azerbaijanis in the country who are heavy consumers of this hot drink.

Rising unit prices support ongoing strong current value growth

Rising unit prices were primarily linked to the devalued currency, which made many imports more expensive, leading to an improved performance by the largest category of coffee. The state has begun to impose stricter regulations on smaller local players which do not adhere to certain standards, leading to their closure, and fewer poor quality brands in circulation, while good quality global brands such as Carte Noire and Nescafé continued to gain ground.

Leading multinationals may experience increasing competition from smaller dynamic players over the forecast period

The two largest players in coffee, primarily instant coffee, Jacobs Douwe Egberts and Nestlé SA, also retained their overall leadership of hot drinks in 2019. Brands from both companies have significantly contributed to the development of good quality coffee, gaining strong brand awareness through many years of television and outdoor advertising, supported by discounting and promotional campaigns in the continually evolving distribution channel of modern grocery retailers.

Despite conservative hot drinks preferences, Georgians gradually exposed to other formats and flavours

Although Georgians remain fairly conservative in their hot drinks preferences, continuing to primarily choose black tea, green tea, instant coffee and fresh coffee, they are gradually being influenced by global trends that are continuing to emerge in foodservice, which are filtering down to retail. Younger generations in particular are more open to new trends which they are exposed to through the media, with fruit/herbal tea gradually gaining ground on green tea, while tourists also have different demands which may influence what foodservice outlets choose to offer.

Stronger performance predicted for hot drinks, as positive trends persist

Hot drinks is predicted to record a stronger performance over the forecast period, in both retail current value and volume terms, and within foodservice. Trends that had begun to influence the market at the end of the review period will persist, as a positive economic outlook will instil a greater sense of confidence in consumers due to rising disposable incomes, leading to the search for premium quality products, or encouraging them to indulge by visiting foodservice outlets more frequently.

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