RTD Coffee in Mexico

PROSPECTS

Positive off-trade volume growth as consumers look for fast cold drinks

RTD coffee continues to perform positively in 2019, despite slower off-trade volume and current value growth, compared with 2018. The demand for RTD coffee is still driven by young consumers seeking a portable energy boost to cope with increasingly hectic lifestyles.

Cold brew leverages quality and premium perception to gain an edge

A key category development is the growing offer of cold brew products from new local and artisanal companies. Their main marketing claims highlight: the use of local ingredients (coffee); the artisanal process (brewing and resting the coffee for more than 12hrs); the addition of vitamins and minerals; and the use of premium packaging through glass containers.

High prices and strong competition slow take-up of RTD coffee

RTD coffee prices are perceived as expensive by a high proportion of consumers in Mexico. Thus, brands/products are aimed at a niche of consumers with high purchasing power.

COMPETITIVE LANDSCAPE

Consolidation limits space for new entrants as Barista Bros exits

In 2019, the competitive landscape of RTD coffee remains consolidated. Sigma Alimentos dominates in retail volume and value share terms through the Café Olé brand, while there are few other significant players.

More cold brew coffees enter the fray to unsettle leaders

Cafe´ Olé benefits from a well-developed distribution network, which enables the brand to appear in more modern and traditional grocery outlets than its competitors. This has helped the brand to post a slight rebound in retail volume and value shares in 2019, after decreases in 2018.

Local players seek convenience retail options to compete with larger rivals

While still negligible in RTD coffee in 2019, internet retailing is an increasingly important channel for owners of local brands without access to large modern grocery retailers. These companies are developing their own websites with delivery services to cater to consumers nationwide.

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