Hot Drinks in Kazakhstan

Stable demand for hot drinks driven by improving economy and westernisation

Hot drinks in Kazakhstan continued to record stable demand in 2019, supported by a number of factors including increasing consumers’ purchasing power due to an improving economy, further urbanisation and a move towards premiumisation. Black tea continued to dominate retail volume sales, due to Kazakhstan being a strong traditional tea-drinking nation, that transcends age and income.

Foodservice records dynamic performance, driven by evolving coffee culture

Hot drinks through foodservice continued to record a stronger performance compared to retail in 2019, a trend that is predicted to persist into the forecast period. While this trend was observed within tea to some extent, supported by the development of the country’s first specialist tea shop and the increasing popularity of businessmen to meet at tea houses, the increasing trend amongst local consumers, particularly in urban areas, to search for high quality freshly prepared coffee has led to the development and growth of cafés and specialist coffee shops such as Petit Chocolate & Coffee, PACO coffee&pastry, ShokoLatte, franchise Pravda Coffee and Big Apple Coffee Shop in Almaty in addition to Nur-Sultan in Astana.

Great share movement within dynamic coffee amongst players

Hot drinks continued to be divided between multinationals such as Mondelez and Nestlé, which are stronger in coffee, and local or regional players which lead the larger category of tea including Tea House TOO, Orimi Trade OOO and RG Brands AO. The competitive landscape of tea remained fairly unchanged due to the category’s relative maturity in the country, encouraging the major players to attract consumers through continual promotions and discounts, while smaller players such as Bayce TOO are attempting to tap into stronger health trends or the demand amongst more affluent or adventurous Kazakhstanis with exotic or interesting flavour combinations, leading to the company’s further value share gain in 2019.

Smaller brands venture into new product development with exotic flavours

While many tea and coffee players consolidated their positions in 2019, leaving less room for smaller brands to make an impression, there was some new product development, notably by Beta Tea, locally distributed by Bayce TOO, launching interesting new flavours of tea including Spicy Fruits, Festive Lemon and Winter Spice, while Tess, locally distributed by Orimi Trade, also ventured into exotic flavours of tea by launching Ginger Mojito, Pina Colada (both based on green tea), and Grapefruit Chili (black tea), which can also be used to prepare “mocktails”, therefore widening their consumer reach to a younger more adventurous audience. Coffee also witnessed interesting new flavour launches in 2019, with Kazakhstani company Coffeelogia TOO introducing an interesting range under its Coffeelogia line including Shanyraq, which is a blend of grapefruit, caramel, and chocolate, amongst a number of other flavour combinations.

Further urbanisation and demand for higher quality products will support stable demand for hot drinks over the forecast period

Hot drinks in Kazakhstan is predicted to record a stable performance over the forecast period, mainly driven by the ongoing domination of tea, which is set to experience marginally higher retail volume growth compared to the review period, and the more dynamic growth of fresh ground coffee in both current value and volume terms. Demand for fresh coffee beans on the other hand, will continue to be dominated by foodservice as both Kazakhstanis and tourists continue to support the strengthening coffee culture in the country.

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