Europe Ready-to-Drink (RTD) Coffee Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

Europe Ready-to-Drink (RTD) Coffee Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

The European Ready-to-Drink (RTD) Coffee Market is projected to record a CAGR of 8.01% during the forecast period.

The market is driven by the rising demand for convenience and nutrition-enabled products, owing to the hectic work schedules of consumers. Additionally, ready-to-drink coffee, being an excellent source of instant energy, is becoming popular among youngsters as well as the middle-aged working population.

Furthermore, with the trend for carbonated drinks declining, several forms of soft drinks flocking the market, and many coffee options entering the beverage category, the RTD coffee market is expected to experience a boost. Moreover, the increase in disposable income in developing economies is another factor triggering the growth of the RTD coffee market in this region.

Manufacturers seek a lot of potential in health-related products and RTD beverages, especially coffee. Products with no added sugar, as well as gluten and dairy-free options, are thought to have the most long-term commercial potential. Also, the innovation and ongoing new product launches drive growth in the RTD coffee market, with flavors like vanilla, caramel, and hazelnut. In the European region, ready-to-drink (RTD) coffees are becoming more popular. RTD coffees are now widely available in supermarkets, small coffee shops, and branded coffee chains. This trend is being driven by the RTD coffees' perceived health benefits and convenience.

Coffee experienced rapid development, in terms of consumption, within a limited period in recent years, as there is a trend toward a coffee culture, which has been developed over the last decade, largely due to the influence of western culture, especially the younger generation. Furthermore, health awareness among educated consumers with comparatively strong consumption preferences is boosting the purchase of coffee, especially ready-to-drink coffees from specialty stores. Coffee chains like Starbucks have been developing their coffee culture by increasing the number of regional specialty stores.

According to Project Café Europe 2022 by World Coffee Portal, the entire market for branded coffee chains in Europe increased 3.2% over the previous year to reach 40,675 outlets. Over the past year, coffee outlets in Europe showed significant growth, with 9,540 outlets. The United Kingdom continues to dominate the European market for branded coffee shops, followed by Germany with 5,464 outlets and Russia with 4,318 outlets. Thus, the above factors may provide potential growth opportunities for the product in the European region.

Packing of all beverages by almost all major players is made more attractive to increase the sales of their products. Bottles such as glass bottles and pet bottles are widely used for RTD coffee distribution, among which pet bottles are preferred more than the traditional glass bottles owing to the new technology that enables these bottles to do more than just hold beverages. These bottles aid in improving the shelf life and preservation apart from being available in economy formats. Pet bottles are manufactured in such a way that consumers can either heat or cool the coffee depending on their requirements. These hot/cool bottles come in handy 'grab and go' sizes and can be used conveniently.

Moreover, since consumers are concerned about the usage of plastics, as the food or beverages stored in these plastic boxes are detrimental to the health of humans, the majority of consumers are shifting their preference to RTD coffee packed in glass bottles and PET bottles. For instance, in November 2022, Starbucks collaborated with Landor & Fitch to redesign packaging for its ready-to-drink portfolio for chilled coffee products. The company seeks to enhance its brand position in the highly competitive market and create "stronger emotional connections" among its customers and drinkers.

The European ready-to-drink (RTD) coffee market is highly competitive, with many domestic and multinational players competing for market shares and innovation in products being a major strategic approach adopted by leading players. Additionally, mergers, expansions, acquisitions, and partnerships with other companies are common strategies to enhance the company's presence and boost the market. Key players dominating the market include Starbucks Coffee Company, JAB Holding Company, The Coca-Cola Company, Luigi Lavazza SpA, and Emmi Group. However, the growth of a company in the coffee market in the future depends on its distribution channel and innovation in its product list, along with the lucrative packaging style. Various players are entering the market to tap the untapped potential of the instant and specialty coffee segment. An advanced distribution network gives an upper edge to the manufacturers to expand their range of products across the market.

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