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Breakthroughs that will re-shape the business of warm drinks

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Global Hot Drinks Industry

The global hot drinks industry is expected to maintain close to 20% yearly growth between 2009 and 2014 to reach almost $81.5 billion, reports MarketLine. In terms of volume, the industry is forecast to expand at a yearly rate of 12% to exceed 6 billion kilograms.

Overall, the global hot drinks market is characterized by fragmentation, with the three leading companies holding a combined market share of less than 23%.

More specifically, the world’s coffee and tea market is expected to reach almost $70 billion by 2015, according to Global Industry Analysts. In terms of volume, the market should hit close to 11 million tons in the same year. Market growth is being fuelled by heightened awareness as to the health benefits of tea, while coffee demand is being increasingly marketed as a luxurious and stylish product. Coffee is also benefiting from rising global affluence and higher greater per capita consumption, with developing countries in particular promising vast growth potential.

Key Segments

Coffee is the world’s most preferred beverage. Global Industry Analysts estimates more than 400 billion cups of coffee are consumed yearly. Traditionally considered a daily habit, coffee consumption has risen in the public eye to a healthy lifestyle choice, forming a vital part of many consumers’ daily rituals. Consumption and trade are expected to grow in recovering economies. Over coming years, penetration in developing markets will continue, production acreage will rise and pricing will continue witnessing a degree of fluctuation.

Brazil is the world’s largest coffee producer. The country’s coffee consumption rose 5% in 2010, more than double the global average increase of 2%. Coffee consumption in India and China is rising due to an expanding middle class consumer base and a rising number of young professionals in the workforce. Rising disposable incomes are fuelling increased coffee consumption in other markets such as Russia, Ukraine and a number of Middle Eastern countries, promising strong short-to-medium market expansion.

Industry Leaders

Kraft Foods is the world’s top hot drinks company, producing almost 10% of market volume, reports MarketLine. Other leading companies operating in the global hot drinks market include Starbucks, Nestle, Parry Agro, Strauss Group, Unilever, Van Houtte, Maxingvest, Tata Global Beverages, Hindustan Unilever and Tata Tetley.

Regional Market Share

NAFTA countries combined to generate more than $11,000 million from hot drinks in 2009, reports MarketLine. Mexico represented the country with the fastest growth at a yearly rate of 6% between 2005 and 2009. The US hot drinks market dominates in terms of revenue, generating close to $10 billion in 2009; it is forecast to generate closer to $11 billion in 2014, remaining the largest contributor among NAFTA countries.

China’s hot drinks industry was worth close to $10.5 billion in 2009, according to research from MarketLine. Tea sales represented the leading market segment generating just under $10 billion, accounting for almost 97% of the overall market. Market growth is expected to slow to a yearly rate of just over 6.5% between 2009 and 2014, bringing the market to just over $14 billion.

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