Hot Drinks Market Size, Share & Trends Analysis Report By Product (Coffee, Tea), By Region (North America, Europe, APAC, CSA, MEA), And Segment Forecasts, 2019 - 2025

Industry Insights

The global hot drinks market size was valued at USD 250.7 billion in 2018 and is anticipated to expand at a CAGR of 6.8% during the forecast period. Increasing awareness related to health has fueled the demand for quality products. Demand for drinks including green tea, lemon tea, and detox coffee and tea is growing owing to increasing awareness related to the health benefits of these product, which, in turn, is driving the market for hot drinks over the forecast period. Launch of hot drinks with various health benefits is a key factor fueling the growth of the market. Increase in installation of coffee wending machines mostly in offices and corporate places is expected to fuel the demand for hot drinks over the forecast period.

Consumers have started opting for hot drinks over carbonated drinks owing to increasing awareness regarding the potential harmful effects of carbonated drinks. The market is anticipated to witness significant growth due to rising awareness among the young population regarding the health benefits of consuming hot drinks such as coffee and tea in reducing harmful diseases such as diabetes, blood pressure, and obesity.

Manufacturers are using various products and ingredients, which are certified by GRAS, Kosher, HACCP, USDA Organic, and GMP, in order to improve product offering and expand their consumer base. Many manufacturers are producing innovative flavors of tea and coffee with added health benefits, which may help the market for hot drinks to grow in the upcoming years.

Owing to hectic lifestyle and increasing consumption of cigarette, consumers are shifting their preference towards de-stress and detox drinks, which is expected to fuel the demand for green tea over the forecast period. Furthermore, manufacturers are launching innovative products such as instance coffee, which can be prepared quickly just by adding hot water, milk, and sugar. This is attracting the attention of corporate employees, thereby boosting the market growth in the upcoming years.

The major players of hot drinks are focusing on rebuts and extensive supply chain as well as increasing their market presence through distributors like dollar shops, mass merchandisers, retail stores, grocery stores, and supermarkets. This is expected to fuel the demand for hot drinks over the forecast period.

Product Insights

Coffee dominated the market, accounting for 42.7% share of global revenue in 2018. The segment is expected to maintain its lead throughout the forecast period. Increasing popularity of organic coffee is one of the key factors for the growth of coffee over the forecast period. Organic and natural coffee is free from pesticides and chemicals, and thus fueling the demand among health conscious people.

Growing demand for organic coffee had led many manufacturers to produce new and innovative flavors and varieties. Furthermore, cafe chains and coffee shops are focusing on instant and natural coffee, thereby boosting the market growth. Many young generations prefer coffee as it contains high amount of caffeine, which helps the body to charge up, which may lead to the market growth in the upcoming years.

Tea is the fastest growing segment, expanding at a CAGR of 7.6% over the forecast period. Increase in production and consumption of tea in Asia Pacific is a main factor driving the market over the forecast period. Maximum consumption of tea has been found in countries of Asia Pacific likeIndia, China, Thailand, and Pakistan.

Manufacturers are focusing on different premiumization and unique flavors of tea to increase their sales. For instance, Organic India Company has made masala tea packs that help to improve metabolism and immune system. Premiumization has increased new ideas such as subscription in different countries including Japan, India, and Singapore. Premium tea lounge and online distribution are also driving the market.  Tea capsules have been newly launched in many areas, but customer’s inclination towards the product has been a bit negative.

Regional Insights

The market in Asia Pacific dominated the market in 2018 and is expected to expand at the fastest CAGR of 7.9% over the forecast period owing to increasing number of retail and franchise outlets in the region. Furthermore, rising brand awareness is a major reason for the market growth in the region. Increasing population of millennials will be a key audience for the global hot drinks market over the forecast period. Millennials are willing to spend on hot drinks owing to increasing penetration of organic hot drinks. In addition, increasing product visibility of high quality product and flavors and aromas is driving the market for hot drinks over the forecast period.

Consumers are looking for unique and different flavors of tea that are of authentic taste and high quality. This has led to an increase in sales and premiumization across many countries of Asia. People from many places of Asia are consuming and preferring premium tea. It may fuel the growth of the market for hot drinks in this region.

Europe held the second largest share in 2018. The region is witnessing an increase in demand for coffee pods since the last few years. Furthermore, the U.K. has a massive demand for ready-to-drink or instant coffee products, which, in turn, is anticipated to boost the market growth for hot drinks in the upcoming years.

In the case of tea, ready-to-drink tea like tea bags and capsules are gaining wide popularity in regions like North America. In the U.S., one out of six people suffer from obesity that may lead to severe health issues. This can be one of the reasons for people changing their preferences from soda related drinks to hot drinks such as coffee or tea, which may fuel the market growth.

Hot Drinks Market Share Insights

Some of the key market players of hot drinks are Tazo Tea Company; Tata Global Beverages; Keurig Green Mountain (KGM); Costa Coffee; Starbucks; Celestial seasoning Inc.; Caffe Nero; Ajinomoto General Foods Inc.; Associated British Foods (ABF). Companies have been launching new products and knowing consumer preferences and behavior in order to meet customer needs. Moreover, the comfort of consumers is taken into consideration while making a new product. For instance, in 2017, Hotshots, U.S. based coffee company, launched Hotshot hot can coffee, which is driving the coffee market in the U.S.

Report Scope

Segments Covered in the Report

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2015 to 2025. For this study, Grand View Research has segmented the global hot drinks market report based on product and region:

• Product Outlook (Revenue, USD Billion, 2015 - 2025)

  • Coffee

  •  Tea

  • Others

• Regional Outlook (Revenue, USD Billion, 2015 - 2025)

  • North America

    • The U.S.

    • Canada

  • Europe

    • Germany

  • Asia Pacific

    • China

    • India

  • Central & South America

    • Brazil

  • Middle East & Africa