RTD Coffee in Mexico

PROSPECTS

Changes in lifestyle drive growth

In 2018, sales of RTD coffee maintained a positive performance, at higher growth rates than in previous years, driven mostly by young consumers looking for an extra shot of energy to get them through their increasingly busy days. In addition to the long commutes resulting from growing urbanisation, the desire to include many different activities, such as work, exercise and leisure activities, is encouraging consumers to look for products that will help them to maintain their energy levels during the day, are portable and will not require a lot of preparation time.

Growth is restrained by high prices

The price of RTD coffee is high for a large segment of consumers in Mexico, making it a product which targets a niche of consumers with relatively high purchasing power. The unit prices of RTD coffee are higher than for most alternatives, including hot coffee, RTD tea and sports drinks.

Competition from drinking milk products

Over the review period, leading brands in drinking milk products launched coffee- flavoured products that compete with RTD coffee. Examples include the brands Lala Cafe´ con leche (Grupo Lala) and Me Late by Alpura (Ganaderos Productores de Leche Pura).

COMPETITIVE LANDSCAPE

Cafe´ Ole´ remains the leader

In 2018, sales of RTD coffee were highly concentrated amongst three brands: Cafe´ Ole´ (Sigma Alimentos), Starbucks Frappuccino (Starbucks de Me´xico) and Andatti (FEMSA). Cafe´ Ole is the leading brand because of its well developed distribution network, with the capacity to reach a greater number of modern and traditional grocery retailers than its competitors.

New brands entering, making the category more attractive

In 2017, the Mexican coffee brand Cafe´ Punta del Cielo (XKMEX), launched a ready-to-drink coffee beverage, available mostly through modern grocery retailers. The brand is likely to compete directly with Starbucks Frappuccino, as these are both well-known brands from specialist coffee shops.

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