Since the closure of cafés, restaurants and other foodservice venues in 2020 and part of 2021, Israeli consumers have been investing more in their at-home coffee experience to replicate the foodservice experience. This has driven further premiumisation, with coffee pods and coffee beans seeing especially high growth as they are considered more premium, as well as growth in the off-trade coffee market.
Unit prices in hot drinks increased in line with the premiumisation trend in 2022, with consumers buying coffee pods and coffee machines for at-home consumption. However, premiumisation was not the only cause of the rising unit prices.
Starbucks entered the local market in 2020, gaining strong share in retail outlets thanks to its global reputation and image. Nespresso, however, maintained a strong lead in coffee pods, whilst the Elite brand (Strauss Group) continued to lead in regular ground/instant coffee.
There continued to be strong development of retail e-commerce in Israel in 2022, especially with rising consumer interest in more niche, boutique or interesting brands such as Beanies. Specialist coffee products, such as coffee machines, are often sold online.
The on-trade was badly affected by the COVID-19 lockdowns as these outlets were forced to close for much of 2020 and part of 2021. As consumers started drinking more hot drinks at home, they opted for more premium and high end products for at-home consumption.
Strong premiumisation trends driven by indulgence and rising health and wellness awareness are expected in hot drinks over the forecast period to 2027. In terms of the off-trade, premiumisation trends are set to continue gaining popularity in coffee, contributing to the growth of brands such as Starbucks, which was launched in the country in 2020.
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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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