Instant Coffee Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Instant Coffee Market is segmented by Flavoring (Flavored and Unflavored Instant Coffee), Packaging Type (Sachets, Pouches, and Jars), Production Technology (Freeze-dried Instant Coffee and Spray-dried Instant Coffee), Distribution Channel (Supermarkets/Hypermarkets, Convenience Stores, Specialist Retailers, Online Channels, and Other Channels), and Geography (North America, Europe, Asia-Pacific, South America, and Middle East & Africa). The report offers market size and forecasts in value (USD million) for all the above segments.

Market Snapshot

Instant Coffee Market Size
Study Period: 2016 -2027
Base Year: 2021
Fastest Growing Market: Asia Pacific
Largest Market: North America
CAGR: 5.28 %
Instant Coffee Market Major Players

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Market Overview

The instant coffee market is projected to record a CAGR of 5.28% during the forecast period (2022-2027).

The impact of the COVID-19 lockdown on the instant coffee market was significant in the first quarter of 2020, but it gradually lessened in the subsequent quarters with limited impact on full-year growth. During the lockdown, while institutional sales suffered due to closed offices and public places, domestic consumption witnessed strong growth by the companies. Also, the current trend toward online shopping for at-home consumption, on the other hand, is forcing retailers, roasters, and consumers to adapt to this new reality. As a result, this factor is expected to increase global coffee consumption. Nestlé SA, for example, reported strong retail demand for food and beverage products around the world, achieving 4.4% organic group sales growth in the first quarter of 2020. Coffee sales were especially strong as people stockpiled essential items during the pandemic.

The middle-class population in developing countries has a huge demand for in-home coffee consumption. Convenience in food habits in general and coffee consumption, in particular, is gravitating consumers toward instant coffee. The versatility of the product to different consumer tastes and preferences, as well as because of its adaptability to be distributed through a wide range of distribution channels to aid in-home consumption, has been supporting this market growth.

Scope of the Report

Instant coffee, also called soluble coffee, coffee crystals, and coffee powder, is a beverage derived from brewed coffee beans that enable people to quickly prepare hot coffee by adding hot water or milk to the powder or crystals and stirring. The instant coffee market is segmented by flavoring into flavored and unflavored instant coffee. By packaging type, the market is segmented into sachets, pouches, and jars. By production technology, the market is segmented into freeze-dried instant coffee and spray-dried instant coffee, and by distribution channel into supermarkets/hypermarkets, convenience stores, specialist retailers, online channels, and other channels. By geography, the market is segmented into North America, Europe, South America, Asia-Pacific, and Middle East & Africa. For each segment, the market sizing and forecasts have been provided on the basis of value in USD million.

By Flavoring
Flavored Instant Coffee
Unflavored Instant Coffee
By Packaging
Sachets
Pouches
Jars
By Production Technology
Freeze-dried Instant Coffee
Spray-dried Instant Coffee
By Distribution Channel
Supermarkets/Hypermarkets
Convenience Stores
Specialist Retailers
Online Channels
Other Channels
Geography
North America
United States
Canada
Mexico
Rest of North America
Europe
Germany
United Kingdom
France
Spain
Russia
Italy
Rest of Europe
Asia Pacific
China
India
Japan
Australia
Rest of Asia-Pacific
South America
Brazil
Argentina
Rest of South America
Middle East & Africa
Saudi Arabia
South Africa
Rest of Middle East & Africa

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Key Market Trends

Increasing Demand for Flavored Coffee

The increased focus on unique, authentic flavors and various functional properties of coffee has aided in the premiumization of the instant coffee market. Multinational players and local craft brands are putting more emphasis on designing authentic flavors for instant coffee. Flavors that meet localized taste preferences are increasingly being adopted by companies. There is a steady demand for flavored coffees in the United States. According to Daymon/ Mintel survey in the United States in 2020, 47% of people showed interest in vanilla-flavored coffee, followed by Mocha coffee with 43%, and 25% of the last five coffee packages purchased among retailers are flavored. 14% of retail single-serve capsule consumers said the availability of flavors is an important consideration while selecting a coffee brand. From the supply point of view, companies are increasingly focusing on procuring coffee ingredients to help consumers simmer up the brew that is just right for them. Thus, flavored coffee is expected to gain prominence in the market during the forecast period.

Instant Coffee Market Revenue Share

Asia-Pacific to Drive Market Growth

Asia-Pacific is set for robust market growth over the forecast period. Many countries in the Asia-Pacific region have been traditional consumers of tea, but the increased penetration of instant coffee in markets such as India has boosted the overall sales of the coffee category. Also, coffee has become a part of the culture in Mainland China. China provides a strong opportunity for the major instant coffee retailers, as the country has witnessed a shift in preferences, citing the millennial consumption patterns.

Japan is the fifth-largest importer of coffee and coffee products. As per the International Coffee Organization, in 2020-21, Japan imported 6,751 bags ( in thousand 60 kgs) of green coffee beans. Similar to imports, Japan consumed 7,479 bags ( in thousand 60 kgs bags) in 2021. the average per capita consumption of green beans was projected at 2kg in 2020, which was indicative of Japan's potential to retain its position as the biggest market in Southeast Asia. Coffee is popular among Australians as well. Consumers in the country have a wide variety of preferences for the coffee that they consume. The companies are expanding their footprints in the market with new and innovative product launches in order to strengthen their presence in the region.

Instant Coffee Market Analysis

Competitive Landscape

The instant coffee market is consolidated, with the top international players holding a significant share in the global market. Nestle SA is one of the leaders in the instant coffee market with its brand, Nescafe. In many regions across the world, all other brands put together occupy a significant market share, which is equal to or slightly less than Nescafe. Key players operating the instant coffee market include Nestle SA, Starbucks Corporation, Kraft Foods Inc., Tata Consumer Products Ltd, and Unilever PLC. These companies are actively investing in online distribution channels, targeting consumers who seek convenience. Thus, the key players are embarking on forming strategic partnerships with online portals, as one of their key strategies is to achieve consolidation and cater to the demands of consumers across various demographics.

Recent Developments

  • In March 2022, Melbourne coffee roaster Beat Coffee launched a specialty instant coffee that captures quality, flavor, and convenience in a single sachet. The freeze-drying process involved in it enables the vibrancy of the coffee to be captured instant, which keeps the caramel and honey-flavored notes.
  • In January 2022, Instant Coffee brand Sleepy Owl launched premium instant coffee, thereby expanding its product portfolio and widening its accessibility as a brand, which is available in three flavors- Original, French Vanilla, and Hazelnut, and these do not contain any artificial flavors and preservatives.
  • In April 2021, Nescafe expanded its portfolio with the launch of a Roastery Collection range, in a move designed to give consumers "the flavor of the artisan coffee" that they would expect from a coffee shop. The Nescafe Gold Blend Roastery Collection includes two instant coffee blends- Light Roast and Dark Roast- each made with Arabica beans.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Drivers

    2. 4.2 Market Restraints

    3. 4.3 Porter's Five Forces Analysis

      1. 4.3.1 Bargaining Power of Suppliers

      2. 4.3.2 Bargaining Power of Buyers/Consumers

      3. 4.3.3 Threat of New Entrants

      4. 4.3.4 Threat of Substitute Products

      5. 4.3.5 Intensity of Competitive Rivalry

  5. 5. MARKET SEGMENTATION

    1. 5.1 By Flavoring

      1. 5.1.1 Flavored Instant Coffee

      2. 5.1.2 Unflavored Instant Coffee

    2. 5.2 By Packaging

      1. 5.2.1 Sachets

      2. 5.2.2 Pouches

      3. 5.2.3 Jars

    3. 5.3 By Production Technology

      1. 5.3.1 Freeze-dried Instant Coffee

      2. 5.3.2 Spray-dried Instant Coffee

    4. 5.4 By Distribution Channel

      1. 5.4.1 Supermarkets/Hypermarkets

      2. 5.4.2 Convenience Stores

      3. 5.4.3 Specialist Retailers

      4. 5.4.4 Online Channels

      5. 5.4.5 Other Channels

    5. 5.5 Geography

      1. 5.5.1 North America

        1. 5.5.1.1 United States

        2. 5.5.1.2 Canada

        3. 5.5.1.3 Mexico

        4. 5.5.1.4 Rest of North America

      2. 5.5.2 Europe

        1. 5.5.2.1 Germany

        2. 5.5.2.2 United Kingdom

        3. 5.5.2.3 France

        4. 5.5.2.4 Spain

        5. 5.5.2.5 Russia

        6. 5.5.2.6 Italy

        7. 5.5.2.7 Rest of Europe

      3. 5.5.3 Asia Pacific

        1. 5.5.3.1 China

        2. 5.5.3.2 India

        3. 5.5.3.3 Japan

        4. 5.5.3.4 Australia

        5. 5.5.3.5 Rest of Asia-Pacific

      4. 5.5.4 South America

        1. 5.5.4.1 Brazil

        2. 5.5.4.2 Argentina

        3. 5.5.4.3 Rest of South America

      5. 5.5.5 Middle East & Africa

        1. 5.5.5.1 Saudi Arabia

        2. 5.5.5.2 South Africa

        3. 5.5.5.3 Rest of Middle East & Africa

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Most Adopted Strategies

    2. 6.2 Market Share Analysis

    3. 6.3 Company Profiles

      1. 6.3.1 Nestlé SA

      2. 6.3.2 Unilevel PLC

      3. 6.3.3 Starbucks Corporation

      4. 6.3.4 Kraft Heinz Company

      5. 6.3.5 Tata Consumer Products Limited

      6. 6.3.6 Luigi Lavazza SpA

      7. 6.3.7 The Coca-Cola Company

      8. 6.3.8 Tchibo GmbH

      9. 6.3.9 Strauss Group Limited

      10. 6.3.10 Massimo Zanetti Beverage Group

      11. 6.3.11 JAB Holding Company

    4. *List Not Exhaustive
  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

  8. 8. IMPACT OF COVID-19 ON THE MARKET

**Subject to Availability

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Frequently Asked Questions

The Instant Coffee Market market is studied from 2016 - 2027.

The Instant Coffee Market is growing at a CAGR of 5.28% over the next 5 years.

Asia Pacific is growing at the highest CAGR over 2021- 2026.

North America holds highest share in 2021.

Nestlé SA, Unilever Plc., Kraft Foods Inc., Starbucks Corporation, Tata Consumer Products are the major companies operating in Instant Coffee Market.

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