Hot Drinks in the Netherlands

COVID-19 impact on hot drinks

2020 has seen the COVID-19 pandemic exert a considerable influence on consumer demand and purchasing patterns in the Dutch hot drinks market. The most marked shift in behaviour has been the shift in sales from foodservice to retail due in large part to the closure of cafés, bars and restaurants, both in the early stages of the pandemic and again towards the end of the year.

COVID-19 country impact

Within the Netherlands, large gatherings were banned on 12 March 2020. From Sunday 15 March, all food and drink establishments were closed, followed by schools a day later, albeit with some remaining open to the children of healthcare and emergency service workers.

Company response

Known for its strong traditional brands, Douwe Egberts in coffee and Pickwick in tea, Douwe Egberts Nederland has been the leading company in both coffee and tea for a number of years. The company is particularly strong in categories that have been losing volumes such as standard fresh ground coffee and black tea, and has, therefore, been very active in developing innovations in categories with high growth expectations, such as hard coffee pods, fresh coffee beans and fruit/herbal tea.

Retailing shift

While still a small channel in hot drinks, e-commerce has seen its share growth accelerate significantly as a result of the COVID-19 crisis. The channel has benefited from reducing the risk of viral transmission through social contact and the fact that consumers have become even more digitally engaged during lockdown, as well as from providing the convenience of 24/7 ordering and home delivery.

Foodservice vs retail split

Foodservice outlets were forced to close in the Netherlands in March and reopened on 1 June. Having operated with restrictions in place to maintain social distancing for several months, they were forced to close again in October and are set to remain closed under a new “hard lockdown” (introduced in mid-December) until at least 19 January 2021.

What next for hot drinks?

Although the Dutch hot drinks market is set to see some of the effects of the COVID-19 crisis fade quickly as consumers return to familiar, hectic lifestyles, the pandemic is expected to have a lasting impact. While the foodservice industry is set to recover, it is expected to be considerably changed by measures aimed at limiting the spread of COVID-19, with many businesses failing to survive the severe economic challenges they face.