In contrast to the strong rise in growth of both retail volume and retail value sales recorded for coffee in light of the pandemic in 2020, sales growth of other hot drinks—primarily chocolate-based flavoured powder drinks—continues to be relatively slack. On the other hand, current value sales are increasing at a faster rate than retail volume sales, suggesting a shift by fatigued, home-bound consumers to drinks of higher quality for themselves and for their children.
In addition to the raft of immediate, pandemic-related issues affecting consumer demand in the other hot drinks category in 2020, a variety of more entrenched issues are also helping to define demand patterns in the category. Prior to the pandemic, demand for other hot drinks—in large part, chocolate-based flavoured powder drinks—was relatively stable and supported primarily by households with children.
Foodservice volume sales of other hot drinks are experiencing a significant decline in 2020 as pandemic-inspired restrictions on consumer movement, outlet opening hours and capacity and distancing are limiting access to cafes, coffee shops and related foodservice outlets and making visits less appealing. Demand is also being limited by consumers’ heightened price-sensitivity.
The category remains concentrated, with the top three players—all multinationals—set to hold just more than half of total category value share in 2020. Perennial leader Nestlé Bulgaria AD is set to maintain its commanding value share lead in 2020, a result in large part due to the performance of its well-known and trusted Nesquik brand and its extensive distribution network that ensures the company’s products are readily accessible on the shelves of modern grocery retailers.
Both retail volume sales and value sales at constant 2020 prices of chocolate-based flavoured powder drinks are likely to decline slightly in 2021 as consumers work to deplete the supplies they have on hand at home, suppressing demand for replacements, and as foodservice options, such as cafés and coffee shops resume operations. As the forecast period ensues, growth rates are expected to grow gradually but be only marginal.
Similar to trends observed in the coffee category, it is expected that pod technology will provide opportunities to innovative players in the hot chocolate-based flavoured drinks segment. For the most part, it will likely be multinational players, such as Nestlé Bulgaria and Jacobs Douwe Egberts, that will lead in the use of hot chocolate-based pods.
Smaller domestic players in the category of other hot drinks often find it difficult to compete with the substantial advertising and marketing resources of multinationals. As a result, many smaller players rely on popular open markets to drive awareness of their products.
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Understand the latest market trends and future growth opportunities for the Other Hot Drinks industry in Bulgaria with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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This report originates from Passport, our Other Hot Drinks research and analysis database.
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