Other Hot Drinks in Estonia

PROSPECTS

Slowing demand for chocolate-based flavoured powder drinks despite efforts from leading brands

Other hot drinks remained a fairly small category in Estonia in 2019, in value if not in overall volume size. This is due to its lower unit price per kg compared to tea and coffee.

Other plant-based hot drinks remains a niche although has further potential to capitalise on health trend

Other plant-based hot drinks remained a niche in Estonia in 2019, with marginal value sales due to its low price. The category has remained underdeveloped over the review period and tends to be perceived as offering low-quality cheap products comprising roasted grain beverages and chicory-based hot drinks.

Compatible hot chocolate pods can offer consumers café experience

The development of pod coffee machines such as those by Nespresso, which are enjoying growth in Estonia due to the growing demand for convenience in the home in addition to recreating the café experience, can also offer chocolate-based flavoured powder drinks some potential for growth. Nespresso has developed Espresso compatible Hot Chocolate Pods, which are offered by Podista.

COMPETITIVE LANDSCAPE

Nestlé loses share to more dynamic players despite efforts to add specific value to its leading Nesquik brand

Nestlé SA retained overall leadership of other hot drinks in 2019, due to the strong presence of its well-known global brand Nesquik in chocolate-based flavoured powder drinks. The brand offers a range of packaging formats and sizes such as small 13g packages for one cup, and larger 200g, 400g and 600g packages in addition to competitive pricing.

Strong share shift in other plant-based hot drinks following Chicory World’s exit

The consolidated competitive environment of other plant-based hot drinks witnessed significant movement in shares following the exit of Chicory World in 2018. This led to strong share gain for leading player Grana Sp zoo (Inka) and Maadlex OÜ with its Seve brand in 2019.

International brands dominate overall, although saturation could allow smaller brands to enter if they can offer some level of differentiation

Chocolate-based flavoured powder drinks remained largely represented by international brands. Due to their size and strong positions, it is fairly difficult for smaller brands to enter or attract consumers, although the combined value share of “others” continued to grow in 2019.

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