Following slower growth in 2017. owing to soft consumer sentiment, RTD coffee saw a strong push by the category leaders to excite the market and encourage consumption.
Influenced by the flourishing coffee culture in Malaysia’s on-trade scene, consumers are increasingly demanding high quality and premium coffee in RTD format for daily indulgence and convenience. Hence, in 2018, the category continued to see frequent product launches that offered premium ingredients and conveyed an upscale product image.
Over the forecast period, RTD coffee is expected to maintain strong growth in the off-trade channel, driven by increasing demand for on-the-go coffee drinks and local consumers’ growing health consciousness, with a shift from energy drinks to RTD coffee. It is expected that more players will respond to the growing health trend and offer new product variants with a health orientation in the near future, with reduced sugar and decaffeinated products, as well as RTD coffees using natural ingredients, to meet the rising demand.
In 2018, Nestlé (M) Bhd continued to dominate RTD coffee, which is attributable to its wide product portfolio and strong brand equity in coffee in general. Malaysian consumers are loyal to the brand, owing to its long-standing reputation and its extensive presence across all traditional and modern grocery retailers, on top of a wide product mix in various pack types, including metal beverage cans, PET bottles and thin wall plastic cup formats.
Nestlé (M) Bhd is expected to face strong competition in the forecast period, with aggressive marketing and product innovations by rivals such as Etika Beverages Sdn Bhd and Pokka Ace (M) Sdn Bhd. In order to maintain its position, Nestlé might well need to expand its product range further with health positioned offerings, tapping into the growing demand for reduced sugar and “clean” ingredient labels, to appeal to a wider consumer base.
In 2018, Etika Beverages Sdn Bhd saw the fastest growth in terms of value share in RTD coffee, beating the competition with its aggressive marketing activities and a vibrant brand image. In order to promote awareness for its Wonda brand, the player has undertaken an expansive promotional drive across the country, with innovative campaigns.
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This industry report originates from Passport, our Soft Drinks market research database.