Hot Drinks in Hong Kong, China

Strong hot drinks culture drives market growth

Hot drinks recorded decent growth in retail value and volume in 2019 thanks to a strong hot drinks culture in Hong Kong. Traditionally, consumers in Hong Kong had a long history of regularly consuming hot drinks such as coffee and tea, and such a culture is progressing.

Increasing importance of foodservice channel for hot drinks

Hot drinks in Hong Kong faces the significant challenge of rising difficulty of expansion in the retail channel. Like soft drinks, retailers are reviewing the profitability of all categories in hot drinks and therefore basing their decisions for resource allocation on this.

Multinational brands continue to dominate

Multinational players remain dominant in hot drinks in Hong Kong, with Nestlé Hong Kong holding a strong lead with an improved share in 2019. Nestlé Hong Kong has continuously led the market with a wide range of popular and well-known brands which have a long history of presence in the territory such as Nescafé, Nescafé Dolce Gusto, Nespresso and Milo across many categories such as coffee and tea within hot drinks.

Taste sophistication and healthy living trend shape product innovation

A number of factors influenced product innovation in hot drinks in 2019, with the growing taste sophistication of consumers driving new beverage products centred on the richness and purity and the healthy living trend leading consumers to pay increased attention to products with health claims. Targeting the taste sophistication trend, a number of coffee makers launched new ranges that were richer and purer compared with existing offerings.

Expansion expected over forecast period

Hot drinks is expected to register strong value growth over the forecast period as key categories see their growth potential being continuously supported by the strong hot drinks culture in Hong Kong. Taste sophistication is continuously pushing coffee and tea makers to launch new varieties and flavours that are able to cater to growing consumer demand for high-quality hot drinks products, continuously driving value sales, especially in the foodservice channel.

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