South Korea Instant Coffee Market - Forecasts from 2023 to 2028

The South Korean instant coffee market is expected to grow to US$1,444.531 million in 2028, up from US$941.490 million in 2021, with a CAGR of 6.31% during the projected period.

The increasing consumption of coffee by younger professionals coupled with the rising income for middle and lower-income individuals is fueling the market for instant coffee in South Korea. Additionally, the increasing number of cafes and rising tourism in the country is one of the major reasons for the demand for premium coffee in the country. According to the Ministry of Culture, Sports, and Tourism, South Korea the revenue from tourism in 2020 was US$12.375 billion and it increased to US$12.687 billion in 2021. The increased tourism demand for best-in-class restaurants, malls, and coffee shops in the country is anticipated to be one of the major reasons for market growth in the projected period.

With the ease of preparing coffee anywhere and everywhere, this advantage is pushing the market in an upward direction for instant coffee. Additionally, the increased influence of social media among the people in the country is also one of the market-propelling factors. The rising demand for aromatic, and unique coffee taste coupled with the experience instant coffee provides while sitting at home can also contribute to market growth in the projected period.

Increasing demand for coffee among younger professionals

The younger professionals who are putting in tiring hours at work need a boost of energy and generally, people use instant coffee for that. Instant coffee is easy to prepare and can be carried with one and needs only hot water to prepare. Additionally, the growing popularity of younger professionals due to the increased influence of social media and the rising penetration of cafes and coffee chains that are particularly designed to attract youngsters are all attributed to the market growth of instant coffee in South Korea. For instance, according to Korea Agro-Fisheries and Food Trade Corporation, there were nearly 99,000 cafes in Korea as of the end of 2022. Hence, such increasing consumption of coffee is one of the major reasons for market growth.

According to the United States Department of Agriculture (USDA), the imports of coffee beans were at peak in 2021/22 with 2,725 thousand 60 kg bags. The increased imports of beans indicate the increased production of coffee. These coffee beans are the base for the production of instant coffee. The coffee bean imports in 2018/19 were 2,480 thousand 60 kg bags which increased to 2,660 in 2019/20. Due to the pandemic, the imports dropped to 2,270 thousand 60 kg bags. Hence, in the projected period the imports are expected to rise as the demand for coffee is rising in the country which in turn is anticipated to boost the market for instant coffee in the projected period.

Growth in utilization of online distribution channel

Online channel in comparison to Offline channel provides higher convenience, and cost-effectiveness in terms of time and effort owing to which its preference over traditional retail stores is increasing. The booming internet penetration in South Korea has bolstered the establishment of online platforms for shopping which is expected to provide a positive outlook to their usage in instant coffee purchasing. For instance, according to the World Bank, in 2022, individuals using the Internet in South Korea accounted for 97% of the overall population. Though in 2022 there was a 1% dip in individual internet usage in comparison to 2021, in comparison to 2015, the country witnessed 7% growth for the same year. Moreover, the growing smartphone subscription in South Korea coupled with the well-established presence of major e-commerce platforms such as Emart, Market Kurly, Homeplus, and Coupang Fresh are also paving the way for future market growth. Furthermore, rapid urbanization and the growing millennial population who are more tech-savvy in comparison to the older generation also act as an additional driving factor.

Segmentation:

By Type

• Freeze-Dried Instant Coffee
• Spary-Dried Instant Coffee
• Others

By Distribution Channel

• Offline
• Foodservices
• Retail
• Supermarket/Hypermarket
• Convience Stores
• Others
• Online

By Province

• Seoul
• Gyeonggi
• Chungnam
• Gyeongnam
• Others