Hot Drinks in Guatemala

Hot drinks in 2021: The big picture

Growth in overall retail volume sales of hot drinks in Guatemala in 2021 looks set to be markedly slower than that recorded in 2020. This is mainly because consumers have started to resume their normal routines and spend less time at home following the lifting of lockdown measures and other public health restrictions imposed to curb the spread of COVID-19.

2021 key trends

As lockdown measures and concerns about community transmission of COVID-19 made foodservice outlets less accessible and appealing to Guatemalans, 2020 saw many consumers gravitate towards higher-end hot drinks products at the retail level in an effort to recreate on-trade experiences in their own homes. Such behaviour has persisted in 2021 despite the easing of public health restrictions, and remains most visible in coffee, the dominant area of the market.

Competitive Landscape

Industria de Café SA (INCASA) looks set to remain the leading company in the Guatemalan hot drinks market in retail value sales terms in 2021, albeit with only a marginally higher share than second-ranked Nestlé Guatemala SA. Both players owe their overall positions to their strength in coffee, by far the largest of the three main categories, though Nestlé also holds a massive lead in flavoured powder drinks.

Retailing developments

Retail distribution of hot drinks has not been significantly affected by the COVID-19 pandemic. Independent small grocers remains the dominant channel in overall retail volume sales terms, with discounters and supermarkets finishing a distant second and third, respectively.

Foodservice vs retail split

While foodservice volume sales of hot drinks have increased rapidly in 2021 with the easing of COVID-19 restrictions, recovery has been hampered by enduring concerns about the risk of exposure to the virus in on-trade outlets. These concerns have heightened over the latter half of the year as the relatively slow progress of the national vaccination programme has been compounded by the emergence in Guatemala of the significantly more transmissible Delta variant, causing infection rates to spike.

What next for hot drinks?

The outlook for hot drinks in Guatemala over the forecast period is positive, with the three main categories projected to post consistently robust growth in retail and foodservice volume sales. Foodservice growth rates are likely to remain high in the short term as people continue to resume their normal routines with the anticipated easing of the pandemic, but will steadily taper off as on-trade consumption patterns stabilise.