Hot Drinks in the Czech Republic

Stagnant consumption of hot drinks in 2019

Retail volume sales of hot drinks stagnated in 2019, in part due to the mild winter and hot summer. Retail value sales, however, continued to benefit from growing consumer interest in premium and high-quality brands, despite high levels of discounting on standard brands.

Premiumisation and health concerns drive retail value growth

Czech consumers continued to demonstrate less interest in black tea, green tea, fruit/herbal tea and white tea, leading to declines in volume sales in 2019. In fact, loose black tea was the only type to enjoy an increase in consumption.

The three leading players all lose share

Although the leading three players, Jacobs Douwe Egberts CZ, Nestlé Cesko and Tchibo Praha maintained their leading positions, all of them witnessed minor declines in their retail value shares in favour of smaller brands in 2019. Jacobs Douwe Egberts maintained its leading position in coffee and tea, thanks to its well-established Jacobs and Pickwick brands.

Investment in new product launches important to drive sales

Investment in new product launches was increasingly important towards the end of the review period amidst stagnating volume sales and high maturity. New flavours included kiwi & pineapple loose tea by Oxalis, a new Fruit Love tea, a mix of maracuya and orange, and two variants of green tea, Green Tea Echinacea & Lime, and Green Tea Ginger & Mango by Teekanne, as well as Caffissimo vanilla and caramel flavours by Tchibo in coffee.

Slight improvement in current retail value growth expected over the forecast period

Hot drinks is not expected to achieve dynamic growth over the forecast period, and will demonstrate a similar performance to that of the review period, with off-trade volume sales declining marginally and current retail value growth improving slightly. Although coffee and tea have reached high degrees of maturity, the premiumisation trend, combined with rising consumer health awareness, will provide pockets of opportunity for producers to increase their value sales by tapping into more niche segments.

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