PUBLISHER: Market Xcel - Markets and Data | PRODUCT CODE: 1520627
PUBLISHER: Market Xcel - Markets and Data | PRODUCT CODE: 1520627
Global coffee market is projected to witness a CAGR of 4.50% during the forecast period 2024-2031, growing from USD 155.43 billion in 2023 to USD 221.04 billion in 2031. Factors such as the growing interest in specialty coffee among consumers, the introduction of various roasting procedures, availability of different varieties of coffees and roasts, and rise in coffee plantation tourism are the major drivers augmenting the growth of the global coffee market.
Other factors, such as consumers' growing preference for specialty coffee and blends that focus on unique flavors and superior quality, are supporting the market growth. Furthermore, the expansion of coffee shops, cafes, bistros, and global chains, such as Starbucks and Costa Coffee, has significantly contributed to the market's growth.
Coffee plantation tourism is supporting coffee market growth as tourists visits in the coffee farms allow them to experience different varieties of fresh coffee and the process of cultivation of premium coffee. It creates an option for the consumers to purchase coffee directly from the source, through the on-site retail shops, at cheaper prices. The surging popularity of coffee tourism destinations worldwide, such as Brazil, which has around 39% of the global production in 2024, Vietnam with a share of 17% of global production, and Colombia, with a share of 7%, and others have heightened the demand for coffee globally.
Ready-to-drink coffee is gaining traction in the market due to its convenience, making it a preferred option among consumers. Moreover, the manufacturers are innovating and expanding their product portfolio to cater to the diverse requirements of the consumers. Additionally, the launch of non-dairy versions in the ready-to-drink coffee format is augmenting the growth of the coffee market as it caters to lactose-intolerant and vegan consumers. For instance, in April 2024, La Colombe Coffee Roasters introduced the world's frothiest draft latte in the new 11 fl. oz. can. The Draft Latte cans are available in flavors such as Mocha, Double, Triple, Caramel, and Vanilla. The product is available in non-dairy versions such as Double Oat, Cold Brew, and Vanilla Oat.
Decaffeinated coffee is gaining popularity among consumers due to its health benefits, such as preventing liver diseases, protecting against Type 2 diabetes, and reducing in the risk of heart diseases. Improvements in technology and production methods have deeply influenced the taste and quality of coffee. Premium coffees are rich and aromatic, rivaling traditional brewed coffee in different formats.
Caffeinated Coffee to be Preferred by the Consumers
Consumers prefer caffeinated coffee over decaffeinated coffee for several reasons. The primary reason is its stimulating effect, which increases alertness and elevates concentration. Since the decaffeination process alters the flavor and aroma of coffee, consumers demand it more. As stated by the National Coffee Association of U.S.A., Inc., more than 90% of Americans prefer drinking caffeinated brews, driving the growth of caffeinated coffee.
Moreover, a more extensive variety of caffeinated coffee is available in the market than decaf coffee. From specialty blends to flavored coffee, more options are available in the caffeinated coffee segment, making it easier for consumers to consume one that suits their taste.
In March 2024, Chameleon Organic Coffee introduced ready-to-drink handcrafted cold brew coffee packaged in four convenient 8-ounce cans. Each can contain approximately 130 mg of naturally occurring caffeine. The launch included Nitro Black, Double Espresso, Sweetened Black, and Flat White Coffee.
Coffee Blends Acting as a Catalyst in Market Growth
Coffee blends are gaining popularity due to their uniqueness and complex flavor profile. Diversity in the flavors is one of the critical reasons for consumers' preference for blends over single-origin coffee. A blend can be balanced and complex, expressing characteristics that single-origin beans may not offer at the same depth. The capability of blending beans from different geographical regions to create unique and subtle taste profiles appeals to a more substantial number of consumers with varied taste profiles. Blends offer unique roasters, making the owner stand out in the increasingly competitive market.
With increasing awareness and continuous innovation in the market, consumers' taste have undergone a transformation. Moreover, specialty coffee culture promotes experimentation and innovation in blending. Roasters seek new blends to create exciting and original products.
Blends are generally more accessible and reasonably priced than high-end single-origin coffees. They allow an avenue for the consumer to enjoy premium quality coffee without paying a whopping amount associated with some specialty single-origin beans. Therefore, this opens up the appeal of blends to a larger market audience. In February 2024, Blue Tokai Coffee Roaster, a subsidiary of Muhavra Enterprises Private Limited, collaborated with Royal Enfield to introduce its unique coffee blend, Royal Enfield Cruise Blend. The specialty coffee blend offers a fusion of flavors from coffee estates in Southern India, boasting a chocolaty and nutty flavor profile with caramel, raisins, and hazelnuts.
Instant Coffees to Dominate Global Coffee Market Share
There is a dominance of instant coffee in the global coffee market over other coffee formats, such as coffee beans, coffee pods, and ready-to-drink coffee, among their types for several significant reasons. Instant coffee provides convenience to the consumers as it requires the least time to prepare and thus appeals to those who need a shot or a cup of caffeine without the need to brew. Also, instant coffee is relatively cheap compared to ground coffee and specialty brews. The relatively low price of instant coffee has made it more accessible to a broad base of consumers, driving the market growth.
Moreover, instant coffee has a longer shelf life than ground coffee, as it is less prone to oxidation and spoilage. It allows consumers to hoard it without constantly rushing to the market. Compact packaging enables easy storage, suitable for people with small kitchen spaces. Instant coffee is highly portable as it does not require brewing or any other process before consumption, which appeals to the consumers, expanding its demand exponentially.
In October 2023, Louis Dreyfus Company inaugurated its instant coffee facility in Vietnam, a joint venture freeze-dried instant coffee facility with a production capacity of 5,600 metric tons of instant coffee. The facility aims to expand the company's existing product portfolio to meet the rising demand of consumers.
Europe Dominates Coffee Market Share
Europe dominates the global coffee market as it has the world's highest coffee consumption, exhibiting exponential yearly growth. As per the estimates of the International Coffee Organization report published in April 2023, Europe has the largest market share of coffee, contributing to a one-third share of global coffee consumption in 2022. A total of 55 million bags of 60 kg of coffee were consumed in Europe in 2022, exhibiting a year-on-year growth rate of 0.1% in 2022 and 6% in 2021.
A rise in the demand for green coffee has been observed in the region, contributing to market growth. According to the European Coffee Report 2022/2023, the Western European region imported 3.13 million tons of green coffee in 2022. Moreover, Germany was Europe's largest importer of green coffee in 2022, with imports amounting to 1.083 million tons. The demand for green coffee is expanding in the region due to the surge in the micro-roasteries that prioritize quality and innovation, sourcing green beans directly from the farms, which ensures freshness, uniqueness, and distinctive flavor profile.
Future Market Scenario (2024 - 2031F)
The global coffee market has witnessed robust growth in the historical period. It is expected to continue to grow in the forecast period with the emerging coffee markets and coffee companies in the world. As per the report published by the International Coffee Organization in April 2023, Asia-Pacific is the second-largest market for coffee, with a total global consumption of 25% in 2022. Furthermore, North America and South America are emerging regions with a total global consumption rate of 18% and 15% respectively.
Key players are expanding their business in the global market to offer different coffee specialties . For instance, in February 2024, Blue Tokai Coffee Roasters announced its plans to open a Blue Tokai store in Japan at a pop-up location in Tokyo's Nihonbashi district. This is expected to expand the opportunity for Asia-Pacific to grow, exhibiting an increase in demand with the expansion of multi-national cafes in the region.
Key Players Landscape and Outlook
Continuous innovation, expansion of production capacities, product portfolio, and partnerships among the key players characterize the coffee landscape globally, as companies compete to outperform one another in terms of various unique features.
Key players are introducing non-dairy ready-to-drink coffees for lactose-intolerant or vegan consumers who increasingly prefer plant-based beverages. For instance, Starbucks, a brand of Nestle S.A., launched a ready-to-drink coffee beverage in March 2024. The launches included Starbucks Oatmilk Frappuccino Chilled Coffee Drink and latest flavors of Starbucks Cold Brew and Starbucks Multi-serve Cold Brew.
Moreover, consumers' preference for premium coffee blends facilitates various collaborations among different players in the coffee market to cater to their surging needs. For instance, in December 2023, Luigi Lavazza S.p.A. partnered with Paris Baguette to introduce the Paris Baguette blend. It is a whole bean coffee sourced from Rainforest Alliance Certified Coffee Farms.
All segments will be provided for all regions and countries covered
Companies mentioned above DO NOT hold any order as per market share and can be changed as per information available during research work.