Hot Drinks in Singapore

Retail volume sales of hot drinks continue to grow in 2019

Retail volume sales of hot drinks continued to grow in 2019, albeit at a slower rate compared to the previous year, due to slower growth in several high-volume categories that are relatively mature, such as instant coffee and other hot drinks. These categories may also have been affected by consumer sentiments surrounding the consumption of sugary beverages.

Healthy living trend further shapes hot drinks

As consumers continue to switch away from products perceived to be high in sugar, instant coffee, which makes up a major share of retail volume sales of hot drinks, seems to be one of the categories that has been most impacted by this trend, with slower volume growth recorded in 2019, especially within instant coffee mixes. In response to this, products with “less sugar” or that are kosong – a local term to indicate no sugar – are becoming more common, as are 2-in-1 mixes with coffee and creamer.

Nestlé Singapore Pte Ltd remains the market leader

Nestlé Singapore remained the market leader within hot drinks in 2019. The biggest brands under its portfolio, Nespresso and Milo, continue to lead coffee and other hot drinks, respectively in value terms, cementing the company’s position as the leading player within hot drinks.

Reducing sugar content is still the focus for hot drinks

Within instant coffee and other hot drinks, the healthy living trend still translates mainly into providing products with lower sugar content. After launching Milo with less sugar and zero sugar in mid-2018, Nestlé launched Nestum Matcha Brown Rice, a plant-based hot drinks product, whereas within instant coffee, it launched new Nescafé Original 3-in-1 with Brown Sugar in early 2019.

Hot drinks expected to continue growing over the forecast period

Hot drinks is expected to see further growth over the forecast period, with value growth expected to outperform volume growth. While mature categories such as other hot drinks may see slower growth compared to the review period, especially as some categories are mature or per capita consumption of some of these products is already quite high, there is still potential for premiumisation within the forecast period.

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