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Strategy Briefing

Where Consumers Shop for Hot Drinks

Oct 2019

US$1,325

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About This Report

New Report Guarantee

If you purchase a report that is updated in the next 60 days, we will send you the new edition and data extract FREE!

This report examines the changing distribution environment for global hot drinks, identifying the shifts across traditional and modern grocery retailers, specialist shops and e-commerce. With the preferences of consumers continuing to evolve, it is important for hot drinks players to understand consumer needs and leverage the opportunities in various channels to boost their sales.

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Overview

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Gain competitive intelligence about market leaders. Track key industry trends, opportunities and threats. Inform your marketing, brand, strategy and market development, sales and supply functions.

Key findings

Store-based retailing still dominates, with distribution remaining broadly stable in 2018

Channel distribution within hot drinks remained broadly stable in 2018, with store-based retailing accounting for the bulk of sales, due to its wide distribution network and availability of hot drinks, especially traditional grocery retailers in developing markets, which offer hot drinks at affordable prices targeted at low-income consumers.

Coffee specialist stores have expanded their presence, appealing to higher income consumers

With growing consumer demand for premium products, there has been an expansion of coffee specialist stores, particularly in Asia Pacific. Such outlets seek to appeal to higher income consumers looking for premium quality coffee.

Internet retailing set to record the fastest growth as more brands partner with internet retailers

E-commerce is exerting a growing influence on the industry, as more brands experiment with new retail models, such as subscription services, and partner with internet retailing companies to boost sales. For instance, in late 2018, Unilever partnered with JD.com to boost the reach of its Lipton tea in China.

Foodservice operators partner with internet retailers to boost sales

Foodservice companies have sought to provide consumers with the convenience of hot drinks being delivered for at-home consumption. Innovations in this area include Starbucks in China partnering with Alibaba’s Tmall to offer consumers a voice order delivery service – Tmall Genie.

Innovation spill-over from foodservice to retail is set to grow

With foodservice being an innovation hub for coffee and tea, it is important for hot drinks players to leverage the opportunity by translating these trends into the retail scene, through partnerships and investment in the higher value, higher growth foodservice channel.

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Introduction

Scope

Key findings

Industry Snapshot

Retail hot drinks sees intense competition, contributing to slowdown

Coffee continues to be the main growth driver in hot drinks

China and Brazil drove value sales growth over the review period

Channel Shifts

Non-store retailing outpaces store-based retailing

Store retailing still dominates across all regions and categories

Non-store retailing sees rapid growth

Store-Based Channels

Modern grocery retailers continue to dominate store-based retailing

Other grocery retailers record fastest growth over review period

Example: Mayora focuses on traditional retail channel in Asia

Coffee specialist stores continue to remain relevant despite slowdown

Nespresso boutique rides on premiumisation in Southeast Asia

Modern grocery retailers see stronger growth in 2018

Starbucks by Nespresso coffee taps into modern grocery to boost sales

Fresh ground coffee pods provides growth opportunity for private label

Private label enjoys highest penetration in Western Europe

Opportunity for private label to grow in coffee pods in the US

Non-Store Channels

Asia Pacific dominates non-store retailing of hot drinks

Strong growth in internet retailing leads to decline in direct selling

Hot drinks categories show strong growth in internet retailing

Nestlé introduces Starbucks Coffee at Home via internet retailing

Hot drinks internet retailing mirrors e-commerce grocery growth

Strong competition posed by Chinese e-commerce retailers

Lacklustre performance by vending

Opportunities lie ahead for Coca Cola to venture into hot drinks vending

Going beyond retail: Coffee shops partner with delivery service apps

Local coffee shops innovate by launching their own delivery service apps

Impact of foodservice sales on retail sales of hot drinks

Future Developments

Asia Pacific set to grow fastest over forecast period

Channel breakdown in 2023: three takeaways

Report Definitions

Definitions (1)

Definitions (2)

Appendix: Competitor Analytics

Competitor Analytics tool

Overview

Competitors

Market overlap

Treemap

Overlap matrices

Appendix: Industry Forecast Model

About Euromonitor International’s Industry Forecast Model

Soft drivers and the Industry Forecast Model

Growth decomposition explained

Significance and applications for growth decomposition

Key applications for Industry Forecast Models

Appendix: Via Pricing

About Via Pricing from Euromonitor International

Why buy this report?

Want to find out more about this report?

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Megatrends

Strategy Briefing

Where Consumers Shop for Hot Drinks

New Report Guarantee

About This Report

New Report Guarantee

Overview

Why buy this report?

Key findings

Store-based retailing still dominates, with distribution remaining broadly stable in 2018

Coffee specialist stores have expanded their presence, appealing to higher income consumers

Internet retailing set to record the fastest growth as more brands partner with internet retailers

Foodservice operators partner with internet retailers to boost sales

Innovation spill-over from foodservice to retail is set to grow

Want to find out more about this report?

Table of Contents

Introduction

Scope

Key findings

Industry Snapshot

Retail hot drinks sees intense competition, contributing to slowdown

Coffee continues to be the main growth driver in hot drinks

China and Brazil drove value sales growth over the review period

Channel Shifts

Non-store retailing outpaces store-based retailing

Store retailing still dominates across all regions and categories

Non-store retailing sees rapid growth

Store-Based Channels

Modern grocery retailers continue to dominate store-based retailing

Other grocery retailers record fastest growth over review period

Example: Mayora focuses on traditional retail channel in Asia

Coffee specialist stores continue to remain relevant despite slowdown

Nespresso boutique rides on premiumisation in Southeast Asia

Modern grocery retailers see stronger growth in 2018

Starbucks by Nespresso coffee taps into modern grocery to boost sales

Fresh ground coffee pods provides growth opportunity for private label

Private label enjoys highest penetration in Western Europe

Opportunity for private label to grow in coffee pods in the US

Non-Store Channels

Asia Pacific dominates non-store retailing of hot drinks

Strong growth in internet retailing leads to decline in direct selling

Hot drinks categories show strong growth in internet retailing

Nestlé introduces Starbucks Coffee at Home via internet retailing

Hot drinks internet retailing mirrors e-commerce grocery growth

Strong competition posed by Chinese e-commerce retailers

Strong competition posed by Chinese e-commerce retailers

Lacklustre performance by vending

Opportunities lie ahead for Coca Cola to venture into hot drinks vending

Going beyond retail: Coffee shops partner with delivery service apps

Local coffee shops innovate by launching their own delivery service apps

Impact of foodservice sales on retail sales of hot drinks

Future Developments

Asia Pacific set to grow fastest over forecast period

Channel breakdown in 2023: three takeaways

Report Definitions

Definitions (1)

Definitions (2)

Appendix: Competitor Analytics

Competitor Analytics tool

Overview

Competitors

Market overlap

Treemap

Overlap matrices

Appendix: Industry Forecast Model

About Euromonitor International’s Industry Forecast Model

Soft drivers and the Industry Forecast Model

Growth decomposition explained

Significance and applications for growth decomposition

Key applications for Industry Forecast Models

Appendix: Via Pricing

About Via Pricing from Euromonitor International

Why buy this report?

Want to find out more about this report?

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