Hot Drinks in Taiwan

COVID-19 impact on hot drinks

The epidemiological impact of COVID-19 in Taiwan has been insignificant compared to most other countries, with very few cases reported, but the threat posed by the pandemic has made consumers more cautious about spending money, with consumer confidence falling to its lowest level in more than a decade during spring 2020 and only partly recovering during the latter part of the year. There was a significant reduction in demand for hot drinks, particularly coffee and TV, in the foodservice channel during the early part of the year, but demand began to normalise in the second half.

COVID-19 country impact

The government in Taiwan has yet to introduce a lockdown. On 28 January, it started quarantining people with travel histories that might have exposed them to COVID-19.

Company response

Players in hot drinks have responded to the pandemic by offering in-home solutions like drip bag to stimulate retail volume sales. Wang De Chuan Fine Tea, which was heavily reliant on tourism, has begun to market drip bag format tea, positioning it as a convenient in-home solution.

Retailing shift

Convenience stores have begun to actively target consumers in search of premium coffee products. Influenced by Western culture via TV, cinema and the internet, young Taiwanese consumers are drawn to the image conveyed by coffee and its place in social interactions, particularly in cafés and coffee shops.

Foodservice vs retail split

COVID-19 has driven a significant decline in volume sales of coffee in the foodservice channel, as COVID-19 led many consumers to spend more time at home and become more cautious in their discretionary spending, with some of this demand displaced to the retail channel. Some consumers who used to enjoy coffee from coffee shop began to brew coffee at home.

What next for hot drinks?

Volume sales of hot drinks in the foodservice channel will rebound during 2021 as consumer confidence continues to recover from the shock of the pandemic. However, the recovery will be slower in tea than in coffee, as the former is more dependent on tourism.

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