Hot Drinks: Quarterly Statement Q3 2020

September 2020

This briefing provides updates on 2019-2024 quarterly forecasts for the hot drinks industry, sourced from Euromonitor International’s Hot Drinks Forecast Model for Q3 2020, reflecting updated GDP and Coronavirus (COVID-19) impact forecasts.

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Key Findings

Growth lower across the board in Q3 2020

Forecasts were revised downwards across the board in Q3 2020, with virtually every market seeing lower projected GDP growth and consequently lower projected demand for hot drinks. This holds true across every category.

Significant shift to retail sales

Total global hot drinks consumption is projected to decline by 2% in 2020, a casualty of lockdowns and drastically reduced consumer mobility; however, retail sales are booming, as consumers substitute trips to coffee shops with coffee at home.

Collapse of foodservice spending will impact product research and innovation

Long-term weakness in away-from-home channels will impact the pipeline of new and premium products to retail channels, necessitating new channels and experiences for discovery.

Long-term shift towards prepared products and away from packaged products continues

Whilst the pandemic has provided a temporary boost to home coffee and tea preparation, it has also led many coffee and tea brands to experiment with delivery, low-priced takeaway-only outlets, and vending machines, as they seek to reduce contact and provide low-priced convenience.

Scope
Euromonitor International and Coronavirus: forecasts and analysis
Hot drinks COVID-19 data and reporting timeline
Key findings
Global economy will contract sharply in 2020
In our baseline view, the pandemic slows in the second half of 2020
Three scenarios examining the impact of a more severe outbreak
Our view in short
Forecast real GDP growth in 2020 under different scenarios
Updated Quarterly Forecast for Q3: baseline vs quarterly update
Largest upgrades/downgrades
Coffee, tea and other hot drinks all see downgrades
Premiumisation still a key driver in coffee and tea
The four types of growth markets mapped
All four types are impacted, but recovery will be easier for some
Soft drivers and the Industry Forecast Model
Soft drivers: how we quantify these COVID-19 specific effects in the IFM
Unilever moves ahead with plans to divest tea division
Routes to disruption in hot drinks
A new approach to beverages: vending, RTD and shops
Nestlé’s half-year results show strong coffee performance
Starbucks’ long-term bet on away-from-home dents Q3 results
Factors to watch for the remainder of 2020
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 Models

Hot Drinks

This is the aggregation of Coffee, Tea, and Other Hot Drinks.

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