As the effects of the pandemic have subsided, hot drinks consumption is set to grow in 2022. Foodservice is expected to continue its recovery, while retail consumption has remained fairly insulated throughout the pandemic due to the universal nature of products, especially tea.
The high adoption of the D2C platform in India complements the premiumisation trend. The D2C route, popularised by new dynamic brands, continues to gain traction.
Tata Consumer Products, which is set to maintain its second position in hot drinks in value terms in 2022, continues to focus on innovation. In FY 2023, the company launched Tata Coffee Café special and Tea Gold Saffron.
Aided by the pandemic, e-commerce has seen drastic growth for the last few years, and although e-commerce will remain an important channel, the year-on-year growth rates will continue to slow as mobility returns to normal. The universal nature of consumption, particularly in the case of tea, will ensure that grocery retailers remains the dominant channel, as e-commerce, particularly D2C websites and hyperlocal players, cater their services mostly to metros and tier-1 cities.
The foodservice channel has operated without restrictions for most of 2022, the only exception being in the first few weeks of the year. Therefore, after seeing a massive decline in its volume share in 2020, as consumption switched to retail, the foodservice share of sales is expected to continue to rebound in 2022.
The slowdown in commodity inflation bodes well for hot drinks during the forecast period. Most companies, including Tata Consumer Products, Hindustan Unilever, and Nestlé, were forced to increase the retail prices of their respective brands at the start of 2022.
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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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