Hot Drinks in Kazakhstan

COVID-19 impact on hot drinks

Overall, growth in value sales of hot drinks is expected to be dampened due to COVID-19. Though foodservice will be affected more severely, retail value sales are also expected to be lower, as a result of COVID.

COVID-19 country impact

The president declared a state of emergency from 16 March to 11 May. All retailing outlets, including open markets and city malls, with sales area greater than 2,000 sq m could only operate between 10.

Company response

Hot drinks continues to be divided between multinationals such as Mondelez and Nestlé, which are stronger in coffee, and local or regional players, which lead the larger product area of tea including Tea House, Orimi Trade, and RG Brands. The competitive landscape of tea remains unchanged due to its relative maturity and major players compete through continual promotions and discounts.

Retailing shift

Small independent grocers are expected to perform well in 2020, as people work from home due to COVID-19 and shop more often in their local neighbourhood grocer. All the same, modern grocery retailers continue to gain value share as outlets continue to open across the country.

Foodservice vs retail split

2020 is expected to be disastrous for on-premise sales of coffee and tea. Other hot drinks will not be impacted, as the majority of values sales are through retail channels.

What next for hot drinks?

The onset of a recession could very well slam the brakes on premiumisation trends, as consumers potentially trade down or in the case of coffee stick to less expensive formats, such as instant coffee. The dent to premiumisation will be mitigated somewhat in retail channels, but if the economy falls into a deep recession, then foodservice will be severely impacted, and with it will come a decline in experimentation, as it is through foodservice, in particular in coffee shops and tea cafés, that hot drink trends often originally start.

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