Instant Coffee: Versatility and Convenience Drive Growth

June 2014

Although fresh coffee dominates the overall coffee industry, instant coffee continues to gain share, thanks in large to its appeal amongst new coffee drinkers. The convenience, versatility, and branded experience of instant coffee make it an attractive consumer product in emerging coffee markets, while in established markets, instant coffee seeks to shed its commodity image to sustain consumer interest.

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Instant coffee is positioned as a value-added drink

The convenience, versatility of flavour and format, and branded experience provided by instant coffee enable it to be positioned as a premium hot drink option, particularly for new coffee drinkers in predominantly lower income tea- drinking markets.

Instant coffee supplanted by fresh coffee in higher income markets

In higher income markets, convenient fresh coffee options, like fresh ground coffee pods, are taking share away from instant coffee, because they are perceived to offer better quality and flavour.

Asia Pacific leads current and future growth

The easy preparation of instant coffee, as well as its ability to be tailored to local taste preferences, has made it the coffee of choice in most markets in Asia Pacific, where coffee consumption is still low.

Consumption is stalling in traditional market strongholds

Retail sales growth for instant coffee in the two largest markets – Russia and Japan – is showing signs of slowing down, as consumers are increasingly interested in fresh coffee options.

Branded experience is key

Instant coffee has the most consolidated competitive landscape of all hot drinks, due to the importance of brand to the consumer experience. Nestlé is the overwhelming leader, holding a 42% retail value share in 2013.

Potential lies in continued innovation

Opportunities for instant coffee to gain more popularity among new consumers, as well as reclaim those exiting the category, lies in continued innovation, both in terms of developing new flavours and improving quality.

What this report includes

  • Top-level strategic analysis of how major consumer trends will influence global markets
  • Consumer insight
  • Impact across all relevant consumer markets
  • Unique graphics and case studies
  • Key market snapshots
  • Accompanying presentation to synthesise main findings

Why buy this report

  • Identify factors driving change now and in the future
  • Understand motivation
  • Forward-looking outlook
  • Briefings and presentation should provoke lively discussion at senior level
  • Take a step back from micro trends
  • Get up to date estimates and comment


Key findings

Global Performance

Instant coffee is the world’s second highest-selling hot drink
Instant coffee outperforms all coffee types, except coffee pods
In many coffee markets, instant coffee is a value-added product
Steady growth in both retail value and volume
Asia-Pacific tops value, despite low per capita expenditure
The popularity of instant mixes enable Asia to also lead in volume
Russia is the current market leader, but not future driver
Consumer product versus commodity

Regional Performance

World split roughly in two by instant and fresh coffee preferences
Coffee preferences vary greatly by region
Top instant coffee markets cut across regions
High inflation colours historic value growth in Russia and Ukraine
Russian consumers are developing a taste for fresh coffee
Country spotlight: Serbia
New coffee markets drive growth in Asia Pacific
Instant coffee mixes dominate in Asia Pacific
On-trade coffee culture drives South Korean instant coffee market
Low prices and new flavours drive growth in the Philippines
Mexico leads Latin American instant coffee market
Country spotlight: Colombia
Image and pods slow growth in North America and Western Europe
Premium and convenience drive instant coffee in the UK
Regional run-down

Competitive Analysis

A highly concentrated global market
Instant coffee is much more consolidated than fresh coffee
Brand is integral to instant coffee
Nescafé dominates global share
Brand spotlight: Nescafé
Tailoring to local taste is the key to Nescafé’s continued success
Mondelez ranks number two thanks to multiple brands
Lower prices and unique flavours offer potential for new players
Local players are better attuned to traditional preferences
Competitive wrap-up

Prospects and Opportunities

Emerging markets will continue to drive value growth
Both new and traditional coffee markets are key to future growth
Increasing in value, but losing share
Bring quality into the conversation


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