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

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.

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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.

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