Keeping Robust: Global Trends in Instant Coffee

October 2016

One third of the global coffee market, instant coffee continues to grow by appealing to new coffee consumers in the developing world, while it fights to stave off declining sales in Europe, North America and Australasia. The increasingly Asian orientation of the global market for instant coffee will have profound effects, including in the competitive landscape, where unquestioned global leader Nescafé is facing off against an assortment of small, localised rivals.

USD 1,325
Request More Information

Instant coffee is growing solidly thanks largely to Asian consumers

In countries of the developed world, instant coffee is struggling because of pressure from fresh, while at the same time there are large populations in the developing world who are entering the coffee market for the first time and are turning to instant because it is inexpensive and easy to prepare. As a result of these consumers, many of whom are located in Asia, the global market will continue to grow for the foreseeable future.

Eastern Europe is losing its prominence in the global market

With Russians increasingly drinking fresh coffee and economic woes besetting much of the region, Eastern Europe has already lost its spot as the top market by value and will soon lose the top spot by volume as well. While the nations of the Balkans are still seeing strong growth, their small size is not enough to compensate for the sales declines of big markets such as Russia and Ukraine. This poses a particular problem, for example, for JDE, which has a much higher share of the market here than anywhere else.

Premiumisation is the way forward in developed markets

With high-end coffee shops and pod machines growing in popularity in North America, Western Europe and Australasia to the detriment of instant, the category’s best hope to turn things around will be to introduce some aspects of the “third wave” into its products. This may prove a tall task however, as many consumers now believe instant to be inherently low quality.

Lines are blurring with fresh coffee

Producers looking to add value or win back defected instant drinks are adding more of the features of fresh coffee into instant. This includes micro-granulated blends to re-create the aroma and taste of fresh and increasing numbers of café-inspired instant blends that seek to mimic the coffee shop experience at home.

In most places, it is a battle of Nescafé versus everyone else

With half of the world’s market, Nestlé is the unquestioned leader of the global market for instant. However, it faces new challenges to maintain top spot both from recently-formed global rival JDE, as well as a host of small companies that look to challenge Nestlé in individual markets where they can leverage their local knowledge against the global giant.


Key findings

Global Overview

Instant coffee is a US$ 28 billion market globally
Instant growing faster than fresh in Asia, Africa and the Middle East
Pods pose threat in developed world
Europeans drink the most instant coffee by some distance
Eastern Europe leads in global consumption, but not for long
Asia is already on top in value
Growth is passing to Asian markets
Volume growth is largely confined to developing world
Tea-drinking markets are showing especially high growth
GDP growth is powering the category forward globally
Future growth hinges on GDP continuing to expand
Drivers in developing world are GDP, population
Trouble in emerging markets poses danger in years ahead
Negative soft drivers take toll in Australasia, North America
The category is relatively price-elastic
Global coffee preferences, mapped
Mixes are most popular in East Asia and Southeast Europe
Mixes will grow in prominence thanks to Asian consumption
Healthier instant products are small but growing segment

Competitive Landscape

Nestlé dominates the global competitive landscape
Nescafé is by far the largest global brand
Nescaf é: Globally dominant in instant coffee
Nescafé: Rebranding focuses on young people
Nescafé: Emerging market consumers key to future growth
Kraft Foods brands go to Jacobs Douwe Egberts and Mondelez
Geographical prospects not good for JDE
Local companies play major role in Asia
Foreign companies duel over Eastern Europe

Regional Highlights

Eastern Europe: Trouble in Russia drags down the region
Coffee culture chips away at instant in Russia
Black market growing in importance in Ukraine
Asia Pacific: Low consumption, high potential
Competition heating up in Asia between local brands and Nestl é
Shrinking pack sizes change nature of market in Japan
Second- and third-tier cities key to growth in China
Vietnamese consumers prefer coffee with ice and milk
Western Europe: Turkey bucks the negative trend
UK consumers start to turn towards fresh
Foodservice plays unusually important role in Turkey
Middle East and Africa: Youth and population growth are key
Despite low incomes, Ethiopia is a standout
High-priced imports lose share in growing Iranian coffee market

Future Prospects

Is going “barista-style” the answer?
Micro-granulated coffees seek to replicate features of fresh
At the intersection of speciality and instant coffee
Four key options for premiumisation going forward


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