RTD coffee has seen the strongest off-trade growth in soft drinks in the Spanish market in 2020. Growth has been supported by the expansion of the product offer by both domestic players such as Ethics Coffee, Madre Monte and Cafés Baqué, and international manufacturers, such as Nestlé, PepsiCo and Illy, which offers a bag-in-box which requires barmen to complete the preparation.
Prior to the outbreak of COVID-19, RTD coffee manufacturers were achieving notable success by targeting young men and women in urban areas looking for refreshing drinks for on-the-go consumption in the midst of hectic lifestyles. The restrictions on away-from-home activity imposed to limit the spread of COVID-19 inevitably had a negative impact on the effectiveness of these strategies.
RTD coffee remains a niche, premium category in on-trade channels in the Spanish market. The closure of foodservice outlets during lockdown and the subsequent reduction of outlets’ capacities due to the implementation of social distancing policies, as well as the marked decline in inbound tourism in the country, have led to a dramatic decline in on-trade volumes of RTD coffee in 2020.
2020 has seen a slowdown in the introduction of new RTD coffee products as the COVID-19 crisis has led to launches being postponed until 2021. A resurgence in new product development will provide a significant boost to RTD coffee growth, as innovation is a key factor in category development as the target audience of young consumers is typically interested in trying new products.
During the COVID-19 pandemic, kiosks, petrol stations and other, similar venues have partially substituted coffee corners with RTD alternatives as these are considered to be more hygienic and involve less risk of viral transmission. While many such outlets are likely to go back to the provision of traditional coffee as the threat from COVID-19 diminishes, some may continue with RTD coffee.
With supermarkets and hypermarkets playing a growing role in RTD coffee and the negative economic impact of measures to contain COVID-19 leading to an increase in consumer price-sensitivity, the private label segment is expected to continue to strengthen its position in the category during the forecast period. In order to build and maintain distinctive brand identities in the face of growing competition from an increasingly sophisticated private label segment capable of attracting consumers through innovation and a growing reputation for quality, as well as price, manufacturers are likely to focus on new product developments focusing on speciality coffees and mixers.
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Understand the latest market trends and future growth opportunities for the RTD Coffee industry in Spain 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 RTD Coffee research and analysis database.
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