Global Instant Coffee Market (by Type, Packaging Type, Application, Distribution Channel, & Region): Insights & Forecast with Impact Analysis of COVID-19 (2022-2026)

Global Instant Coffee Market (by Type, Packaging Type, Application, Distribution Channel, & Region): Insights & Forecast with Impact Analysis of COVID-19 (2022-2026)

Market Insight:

Instant coffee is brewed coffee that has almost all of its water removed. It is a straightforward technique with no chemical alterations. Coffee that has been deprived of its liquid is known as instant coffee. One notable distinction is that instant coffee is often produced with Robusta coffee beans rather than the more costly Arabica coffee beans.

In developing countries, coffee is still considered as a luxury item. With growing consumer income levels and concurrent shift to more premium product offerings, per capita consumption is rising. The global instant coffee market is expected to reach US$35.97 billion in value and 1.91 million tonnes in volume by 2023, growing at a CAGR of 5.11%, in terms of value and 2.88%, in terms of volume, during the forecast period.

Segment Covered:

• By Type: The report splits the global instant coffee market into four different segments based on the type: roast and ground, soluble, ready to drink (RTD) and portioned. The roast and ground segment accounted for approximately of 34% of the instant coffee market in 2021, owing to the health benefits as roast and ground coffee powder contains vitamin B3 which helps the body to support the health of skin and nerves and to manage cholesterol. Roasting coffee changes the physical and chemical properties of coffee beans into roasted coffees, which produces the distinctive flavor of coffee, which would accelerate the demand for instant coffee in the future.
• By Packaging Type: The market report has segmented the global instant coffee market into four segments on the basis of packaging type: jar, pouch, sachet, and others. Jar segment held more than half of the share in instant coffee market in 2021, while the fastest growing segment is pouch during the forecast period, as the pouch packaging require significantly lesser raw materials and reduce the overall cost associated with the product packaging while improving the profit margin of the end-use companies.
• By Distribution Channel: The instant coffee market report has segmented the global market into two segments on the basis of distribution channel: offline and online. Offline channel held more than three fourth of the share in instant coffee market in 2021, even though the fastest growing segment is online channel due to rising demand for ordering products online as people find it more convenient, and many selling companies will provide good discounts and offers to attract customers.
• By Application: As per the report, the global instant coffee market into two segments on the basis of application: commercial, and residential. Commercial segment held approximately 77% of the share in instant coffee market in 2021. The commercial places such as offices, restaurants, cafes, etc. have increased and they usually purchase instant coffee in bulk from the manufacturers as people's demand for coffee has also skyrocketed.

Geographic Coverage:

• According to this report, the global instant coffee market can be divided into five major regions, on the basis of geographical areas: Asia Pacific (China, Japan, and Rest of Asia Pacific), North America (The US, Mexico, and Canada), Europe (Germany, UK, France, and Rest of Europe), Latin America, and the Middle East and Africa. The Asia Pacific instant coffee market enjoyed the major share of the global market share, primarily owing to the dominance of India and China which are the Asia-Pacific region's fastest expanding economies. East Europe, Russia, India and China are fast growing geographies for instant coffee.

Top Impacting Factors:

Growth Drivers

• Increased use of Internet
• Growth of High End Café Chains and Coffee Capsule
• Increasing Popularity of Instant Coffee among Millennial
• Increase in Disposable Income

Challenges

• Fluctuations in Raw Material Prices
• Threat of Substitutes

Trends

• Increasing demand for Flavored Coffee
• Premiumization of Instant Coffee in Food and Beverages
• Healthy Coffee and Additives
• Specialty Drinks And Artisan Coffee Would Be On The Rise
• Driver: Increase in Disposable Income

Economic growth and middle-class growing population in developing countries such as China, India, and Brazil drove the increase in disposable income. Because people have a hectic lifestyle and require caffeine to boost their energy, the increase in disposable income has led to an increase in demand for instant coffee. Increased disposable income rises consumer purchasing power and augments the likelihood of consumer spending on leisure activities such as watching movies with coffee, visiting cafes and restaurants with friends and family, etc., which acted as growth driver for instant coffee as instant coffee is easy to make and has various benefits on the health.

• Challenge: Threat of Substitutes

The number of coffee substitutes is growing, which poses a threat to the coffee industry. Tea is one of the major substitutes for the coffee industry, which is harming the coffee industry. In many regions of the world, tea is preferred over coffee, and coffee is only consumed on occasion. There are numerous coffee substitutes. Coffee is not for everyone, and it is not suitable for everyone because many people are lactose intolerant and have other food intolerance. Other hot and cold beverages, such as roast and ground coffee, soft drinks, carbonated drinks, nutritional and energy drinks, green tea, and iced tea, are becoming increasingly popular, posing a significant challenge to the global instant coffee market.

• Trend: Specialty Drinks And Artisan Coffee Would Be On The Rise

Another trend that is expected to explode in the future is the use of local roasters. This would assist artisans in creating signature specialty drinks and marketing the brewing methods and flavors of beans provided by local residents. For towns with a small coffee scene, this would be an excellent way to promote one another and bring coffee lovers to shops to sample what their town has to offer. New and innovative brewing method such as Cold and Nitro brewing is used by coffee shops and people. Cold-brew takes longer than other methods and needs to be readily available to truly make a profit. Hence, generating the demand for instant coffee in the market.

The COVID-19 Analysis:

Due to the pandemic, instant coffee exports saw a fall in 2020 and the supply chain was disturbed. There were government restrictions imposed on operation of hotels, restaurants and cafes as well as a significant drop in the presence of employees in the office. While in 2021, the instant coffee market rebounded because the manufactures produced variety of flavors of instant coffee according to the changing customer tastes and made it available in the online channel. Also, increasing number of coffee chains and restaurants generated demand for instant coffee.

Analysis of Key Players:

The market for instant coffee is fragmented, with the presence of large number of players. The key players offer a wide range of instant coffee components such as Roast and Ground instant coffee, and ready to drink instant coffee. Further, the major players are investing heavily in R&D of products and incorporation of new technologies. Various businesses are concentrating on sustainable growth initiatives such as new launches, product approvals, and other things like patents and events. Acquisitions, partnerships, and collaborations were among the external growth strategies observed in the industry. These initiatives have opened the road for market participants to expand their business and customer base. Further, key players of the instant coffee market are:

• Starbucks Corporation
• Unilever Plc
• Tata Consumer Products
• Nestle S.A.
• The Karaft Heinz Company
• Ajinomoto Co. Inc
• Strauss Coffee Ltd
• Jacobs Douwe Egberts
• PT Java Prima Abadi
• Dougsuh Companies Inc
• PT Mayora Indah TBK
• JM Smuckers Company
• Tchibo Coffee International Ltd

Nestle maintained its leadership in the instant coffee market even after the launch of so many coffee brands across the world. However, many manufacturing companies are innovating and launching products according to the taste and preferences of their customers. For example, Strauss Coffee had launched Unique coffee beans in Romania and Poland in which the products are personally tailored to the consumer’s taste (coffee origin, roasting method, grinding thickness, etc.) and delivered to the consumer directly after roasting to preserve maximum freshness, sold online and through the retail channel.