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Strategy Briefing

Hot Drinks: Quarterly Statement Q3 2017

36 pages, Aug 2017

US$1,325

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About This Report

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If you purchase a report that is updated in the next 60 days, we will send you the new edition and data extract FREE!

Q3 saw only minor changes at the global level to EMI hot drinks forecasts, but it was an active few months for many of the large hot drinks players. JDE moved more aggressively into Nespresso-compatible pods, while Nestlé announced the expansion of Nespresso to third-party retailers. Meanwhile, Tata aims to turn Tetley into a billion dollar tea brand and Lavazza made a major purchase in Canada.

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Overview

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Gain competitive intelligence about market leaders. Track key industry trends, opportunities and threats. Inform your marketing, brand, strategy and market development, sales and supply functions.

Q3 sees little revision to Passport baseline forecasts in hot drinks

Total revisions to EMI hot drinks forecasts for 2021 were raised about a tenth of one percent from baseline in Q3 (about USD180 million in absolute terms). Tea and coffee both saw upgrades, while other hot drinks was downgraded. In no category were the changes especially significant, however.

GDP forecasts stable at global level, but some individual markets are significantly affected

While GDP revisions in the world’s major economies were relatively minimal, they remained the leading source of forecast revisions in Q3. The most affected nations were Algeria and Nigeria, each of which lost about a percentage point from their forecast CAGRs due to stubbornly low oil prices hampering their economic prospects. This was outweighed in an absolute sense, however, by slight upwards revisions in the large markets of China, Germany and Brazil.

Changes to demographic data highlight the importance of Baby Boomers to tea sales in traditional markets

New demographic data regarding the ageing of the Baby Boomers highlights the reliance of certain categories on this large but shrinking demographic. Their decline will be especially felt in markets that are traditionally heavy consumers of tea. Younger consumers in most of these areas prefer a wider variety of beverages, rather than solely tea.

Nespresso-compatible pods in Europe see a great deal of action this quarter

Nestlé has been challenged by loosened intellectual property protections on Nespresso for some time, but in Q3 the matter accelerated. Global rival Jacobs Douwe Egberts introduced aluminium capsules with Nespresso compatibility, while low-cost, unbranded products appeared so quickly that one major player announced it was exiting the market because it had become too crowded to be profitable. Meanwhile, Nestlé fought back by deciding to allow sales of Nespresso at limited third-party retailers.

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Q3 Macroeconomic Updates

Key findings

Executive summary

GDP forecasts: Revisions over last quarter

Global risk scenarios

Major macro risks for hot drinks

Q3 Hot Drinks Updates

Q3 is another quarter of stability for global hot drinks

Upwards revisions in the BRICs are the major source of change

Adjusted GDP forecasts are the leading cause of Q3 revisions

Algeria sees one of the most significant revisions

Most oil-dependent economies are vulnerable to similar fluctuations

A rise in oil prices, however, would be negative globally

The benefits of high prices would go to a small number of countries

Downgraded economic forecasts in the US drive unit price effect

The fading influence of Baby Boomers affects sales of tea

Turkey is the country in which this will be felt most strongly

New confectionery data change coffee forecasts

Summary: Q3 forecast revisions

Corporate activity in Q3

Major shake-ups in coffee pods in Western Europe

Nespresso enters new retail channels in response

Tata aims to make Tetley a billion dollar tea brand

Green tea will need to be a key part of the strategy

Tata looks towards the massive Chinese tea market

A new “jewel” in Lavazza’s crown is added in Canada

Canada offers advantages that Lavazza’s core markets do not

Summary: Q3 corporate activity

Conclusion: The drivers of global hot drinks growth

Appendix: Industry Forecast Model

About Euromonitor International’s Industry Forecast Model

Soft drivers and the Industry Forecast Model

Growth decomposition explained

Significance and applications for growth decomposition

Key applications for Industry Forecast Model

Why buy this report?

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Megatrends

Strategy Briefing

Hot Drinks: Quarterly Statement Q3 2017

New Report Guarantee

About This Report

New Report Guarantee

Overview

Why buy this report?

Q3 sees little revision to Passport baseline forecasts in hot drinks

GDP forecasts stable at global level, but some individual markets are significantly affected

Changes to demographic data highlight the importance of Baby Boomers to tea sales in traditional markets

Nespresso-compatible pods in Europe see a great deal of action this quarter

Want to find out more about this report?

Table of Contents

Q3 Macroeconomic Updates

Key findings

Executive summary

GDP forecasts: Revisions over last quarter

Global risk scenarios

Major macro risks for hot drinks

Q3 Hot Drinks Updates

Q3 is another quarter of stability for global hot drinks

Upwards revisions in the BRICs are the major source of change

Adjusted GDP forecasts are the leading cause of Q3 revisions

Algeria sees one of the most significant revisions

Most oil-dependent economies are vulnerable to similar fluctuations

A rise in oil prices, however, would be negative globally

The benefits of high prices would go to a small number of countries

Downgraded economic forecasts in the US drive unit price effect

The fading influence of Baby Boomers affects sales of tea

Turkey is the country in which this will be felt most strongly

New confectionery data change coffee forecasts

Summary: Q3 forecast revisions

Corporate activity in Q3

Major shake-ups in coffee pods in Western Europe

Nespresso enters new retail channels in response

Tata aims to make Tetley a billion dollar tea brand

Green tea will need to be a key part of the strategy

Tata looks towards the massive Chinese tea market

A new “jewel” in Lavazza’s crown is added in Canada

Canada offers advantages that Lavazza’s core markets do not

Summary: Q3 corporate activity

Conclusion: The drivers of global hot drinks growth

Appendix: Industry Forecast Model

About Euromonitor International’s Industry Forecast Model

Soft drivers and the Industry Forecast Model

Growth decomposition explained

Significance and applications for growth decomposition

Key applications for Industry Forecast Model

Why buy this report?

Want to find out more about this report?

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