2023 saw positive growth in all categories of hot drinks due to population growth and an easing of inflation. However, all industry players continue to face major structural issues, with coffee and other hot drinks importers in particular facing challenges due to exchange rate anomalies.
During 2023, the Iraqi economy remained unstable and fragile, with many consumers faced with an uncertain immediate financial future and household spending under extreme pressure as a result. This instability is a reflection of the situation across the wider Middle East region and can be attributed largely to the country’s ongoing recovery from many years of armed conflict.
Demand for coffee and tea continued to increase in Iraq during 2023, despite the impact of high inflation and this can be seen as a reflection of the essential status of coffee and, in particular, tea among the local population. Rising prices put significant pressure on on-trade sales of tea and coffee during the year, with foodservice volume declines register than each category.
The main background trend influencing sales of hot drinks in Iraq is the slow but steady shift away from tea consumption and towards drinking coffee. This can be largely attributed to the spread of cafés and specialist coffee shops, which has made high-quality coffee-based beverages more widely available.
High inflation led to significant changes been seen in the operations of the leading players in Iraq’s hot drinks industry during 2023. In particular, the devaluation of the Iraqi dinar against the US dollar and various other benchmark global currencies meant that imported products became far more expensive, with logistics and distribution costs increasing significantly.
The forecast period is expected to see robust growth in volume sales across all categories of hot drinks. However, it is clear that demand for tea is already saturated, with black tea set to remain the preferred hot drink of most of the Iraqi population.
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Understand the latest market trends and future growth opportunities for the Hot Drinks industry in Iraq with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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Data and analysis in this report provides further detailed coverage dedicated to the following key categories, where applicable:
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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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