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Hot Drinks in Latin America: New Occasions, New Functionalities

August 2014

Latin America was the fastest growing hot drinks market in the review period and will remain so over the forecast period, exceeding all other regions except for Asia Pacific in absolute value growth. Increasing consumption rates will be one factor in future growth as hot drinks’ overall share of throat in Latin America remains low. Demand for premium products that offer innovative formats, specific functions, or appeal to local tastes will also be key to the region’s value growth.

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World's fasting growing hot drinks market

Latin America was the fastest growing region for hot drinks retail over the review period (2008-2013) and is expected to remain so over the forecast period, increasing by 26% or almost US$4.8 billion between 2013 and 2018. Still, low per capita figures across most Latin American markets demonstrate the potential for even further growth.

Varied preferences spells opportunities for all hot drinks categories

Latin America boasts the most diverse hot drinks preferences of any region in the world. In addition to a robust coffee culture, there a strong tradition of other hot drinks consumption both in other-plant based and powdered-based. Such diversity offers growth opportunity for manufacturers across hot drinks categories.

Coffee dominates, but tea is the fastest-growing category

Although coffee accounts for nearly two-thirds of hot drinks consumption in the region, tea is forecasted be the fastest growing hot drinks category. Fruit/herbal teas will make up the bulk of tea sales in the region driven by increased health and wellness concerns and interest in traditional fruits and herbs.

Brazil, Brazil, Brazil

Over the forecast period Brazil is expected to record the largest absolute value growth in coffee in the world. Likewise, Brazil is expected to account for more than half of the region’s tea growth, while it is also the world’s second largest consumer of other hot drinks after China. Although hot drinks consumption is already well-ingrained in Brazil, there remains plenty of opportunity for manufacturers to increase retail occasions and drive value through more premium products.

What this report includes

  • Top-level strategic analysis of how major consumer trends will influence global markets
  • Consumer insight
  • Impact across all relevant consumer markets
  • Unique graphics and case studies
  • Key market snapshots
  • Accompanying presentation to synthesise main findings

Why buy this report

  • Identify factors driving change now and in the future
  • Understand motivation
  • Forward-looking outlook
  • Briefings and presentation should provoke lively discussion at senior level
  • Take a step back from micro trends
  • Get up to date estimates and comment

Introduction

Scope
Key findings

Regional Overview

Consistent growth in Latin American hot drinks
Overview of regional economic growth
Hot drinks consumption compared to the rest of the world
Latin America is also the fastest growing region in retail value
Latin America has the most varied hot drinks preferences
Despite increased interest in tea, coffee is king in Latin America
Top four markets account for over 70% of hot drinks retail value
Latin America leads world in foodservice coffee consumption
Opportunities in summary

Coffee Insights

Fresh coffee dominates the overall coffee market
Fresh coffee market is highly consolidated
Instant coffee sales are more evenly dispersed
Case study: Brazil - Time is ripe for value-added coffee products
Quality enters the ground coffee conversation
Although still niche, Brazilian pod market is packed with potential
Instant coffee gains ground in Colombia
Demand for affordable luxury drives specialist coffee shops growth
Key takeaways

Tea Insights

Fruit/herbal teas drive value, black tea drives volume
Peruvian tea market will see biggest jump over the forecast period
Traditional usage drives tea sales in Brazil
Wellness positioning and innovation attract consumers in Peru
In Chile, tea is both a commodity and value-added good
Key takeaways

Other Hot Drinks Insights

Latin America is second largest region for other hot drinks
Brazil and Argentina top other hot drinks markets
Room for innovation in chocolate powder drinks
Packaged mate as a model for other traditional hot drinks
Peruvian ingredients boost other plant-based hot drinks
Key takeaways

Competitive Landscape

Coffee companies dominate competitive landscape
Nestlé’s dominance driven by long history and consumer trust
Strauss/São Miguel: A “jack of all trades” in Brazilian coffee market
Opportunities for international tea players

Regional Prospects

Hot drinks sales will increase by US$4.8 billion over 2013-2018
Positioning will be key to increasing consumption
Future key trends by major country
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