Coffee Pods Market by Product Type, Type and Geography - Forecast and Analysis 2023-2027

Coffee Pods Market Forecast 2023-2027

The coffee pods market is estimated to increase by USD 9.99 billion and grow at a CAGR of 5.22% between 2022 and 2027. Market expansion relies on various factors such as the ease of coffee pod usage, frequent introduction of new products, and heightened demand facilitated by organized retailing. Challenges facing the market encompass the elevated cost of coffee pods and the presence of more economical alternatives, hurdles in distribution, and the negative environmental impact of coffee pods. Despite the convenience offered by coffee pods and the surge in new product entries, affordability remains a concern for consumers. Additionally, distribution complexities hinder market accessibility, potentially limiting consumer reach. Furthermore, the adverse environmental effects associated with coffee pods pose sustainability challenges, necessitating eco-friendly alternatives. Therefore, while factors like convenience and retail availability drive market growth, addressing pricing disparities, distribution obstacles, and environmental concerns is essential for sustained industry expansion.

What will be the size of the Coffee Pods Market During the Forecast Period?

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Market Segmentation

This report extensively covers market segmentation by product type (soft pods and hard pods), type (regular and decaffeinated), and geography (Europe, North America, APAC, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.

By Product Type

The market share growth by the soft pods segment will be significant during the forecast period. Soft pods is the largest segment of the global market in 2022 and will continue to remain the largest segment during the forecast period. Soft pods are loose un-pressed coffee portions brewed in specially designed machines and mainly used for long cups. These pods are lightweight and flexible when used in brewers with tight clearance, further offering better extraction. Melitta Group, WP Coffee, Baronet Coffee Inc. (Baronet Coffee), Dunkin, and JAB Holding are some of the major vendors offering soft coffee pods.

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The soft pods were valued at USD 18.55 billion in 2017 and continue to grow by 2021. Soft coffee pods are relatively lower in price compared with hard coffee pods and can easily find in physical stores such as supermarkets. In a variety of non-pressurized devices, drip coffee is made using soft coffee pods. Also, soft coffee pods are environmentally friendly because they are mostly made of paper. Because the pods are entirely biodegradable, they can be securely disposed of or recycled. Prices of soft coffee pods are low because of the absence of materials such as plastic and metal. The pods typically cost less than the capsules. However, due to the increasing popularity of hard pods such as capsules, the share of the soft pods segment in the global market will decline during the forecast period.

Key Region

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Europe is estimated to contribute 40% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. Europe was the largest geographical segment of the global coffee pods market in 2022 and will continue to remain the largest segment during the forecast period. The coffee pods market in Europe was moderately fragmented in 2022 due to the presence of numerous regional and a few global vendors. The Netherlands, France, Switzerland, Italy, the UK, Germany, Belgium, Spain, Russia, South Africa, Sweden, Finland, and Denmark have a huge potential for coffee pods in terms of volume consumption and revenue generation.

Market Dynamics, and Customer Landscape

The coffee industry is witnessing a transformation towards sustainability and convenience, with a focus on reducing the environmental footprint through innovations like biodegradable packaging and compostable paper. Multiple machines and portafilters offer versatility in coffee preparation, catering to varying preferences for premium quality coffee and diverse flavors. With customizable options and varying caffeine concentrations, consumers can tailor their coffee experience to their liking. Companies like MaxiCoffee are embracing single-serve coffee containers and coffee pods, providing convenience without compromising on taste or sustainability. From classic flavors like caramel and chocolate to unique offerings like hazelnut, the market offers a wide range of choices to cater to different palates. Amidst concerns about caffeine consumption, the industry continues to innovate, ensuring a satisfying and sustainable coffee experience for all. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

Key Market Driver

The market experiences significant growth due to their convenience, particularly in regions undergoing rapid urbanization and infrastructural development. This trend is driven by the rising working population and the expansion of organized retail outlets. Additionally, the use of coffee pods offers cost savings for cafes and restaurants, as they eliminate the need for training baristas and paying experienced staff. As consumers increasingly prioritize time efficiency and convenience, the demand for coffee pods is expected to continue rising. This reflects a broader shift towards customizable and premium-quality coffee experiences, supported by innovations in flavor variety and caffeine concentration. With sustainability concerns driving the adoption of biodegradable packaging and compostable materials, coffee pods are well-positioned to meet evolving consumer preferences in the foreseeable future.

Significant Market Trend

The technological and packaging innovations are another factor supporting the market share growth. Constant changes in demand for coffee pods and packaging innovations enable players to introduce new coffee pod launches. Coffee pods face stiff competition from the demand for other coffee variants, such as instant coffee and RTD coffee. Many new vendors have begun to launch technologically innovative products. For instance, in November 2022, Nestle launched paper-based Nespresso compostable coffee pods made primarily from paper. Hence, such products have a lower environmental impact than capsules made from aluminum or plastic.

Luigi Lavazza and Nestle Nespresso and Kraft Heinz Ethical Coffee Co. brands offer patented compostable coffee pods (i.e., fully biodegradable coffee pods). This is because coffee capsules face widespread criticism for the environmental hazards associated with their use. More players are expected to introduce new compostable coffee pods. Thus, such innovations in packaging will drive the growth of the market during the forecast period.

Major Market Challenge

The high price and the availability of cheaper substitutes will be a major challenge for the market during the forecast period. The high price of coffee bars compared to traditional coffee products is one of the biggest challenges in the market. Consumers in developing countries in Asia, Eastern Europe, and Latin America still prefer traditional whole-bean coffee because it is cheaper than coffee capsules.

Consumers in densely populated countries such as India, China, Indonesia, the Philippines, Japan, and Nigeria still prefer traditional coffee products. This is because they are more efficient and make more cups of coffee than a packet of coffee grounds. So there is a need for players to reduce the prices of coffee beans to attract consumers in developing countries. Such factors will hinder the market during the forecast period.

Key Market Customer Landscape

The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Global Market Customer Landscape

Who are the Major Coffee Pods Market Companies?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

Alois Dallmayr KG - The company offers coffee pods such as Capsa Barista, Capsa Belluno, and Capsa Boost. Also, through the company offers coffee solutions, tea solutions, and vending solutions.

The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:

• Baronet Coffee Inc.
• Beantown Roasters Inc.
• Dualit Ltd.
• Illycaffe SpA
• Inspire Brands Inc.
• Iris Group Pte. Ltd.
• JAB Holding Co. Sarl
• Luigi Lavazza SpA
• maxingvest AG
• Nestle SA
• Rogers Family Co.
• Starbucks Corp.
• Strauss Group Ltd.
• The J.M Smucker Co.
• Trilliant Food and Nutrition LLC

Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.

Segment Overview

The report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. 

• Product Type Outlook 
  • Soft pods
  • Hard pods

• Type Outlook 
  • Regular
  • Decaffeinated

• Region Outlook
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • South America
    • Chile
    • Argentina
    • Brazil
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

Market Analyst Overview

The market is experiencing robust growth driven by various factors, including the convenience of flat bags and pre-measured doses, catering to the modern consumer's preference for pressed coffee. Aluminum-based capsules offer an alternative, though concerns about environmental footprints drive demand for biodegradable and compostable packaging. With increasing sales of coffee machines and evolving working habits, in-home coffee consumption is on the rise. Brands like Caffe Motta and Caffe Borbone cater to discerning tastes with premium quality flavors, offering caramel, chocolate, and hazelnut options. While caffeine consumption boosts alertness, fears of insomnia and anxiety prompt some to opt for decaffeinated options. The portafilter, a staple in coffee-making, symbolizes quality embraced by the International Coffee Organization (ICO) and hospitality industry. Away-from-home food and beverage channels thrive, catering to hybrid work systems. Cafe-like coffee experiences are favored, fueling metabolism and fostering a dynamic coffee culture globally.

As international markets collaborate to address production costs, the coffee pods market continues to flourish across diverse retail channels, including hypermarkets, specialty stores, and cafes. The coffee industry has witnessed a significant shift towards sustainability and convenience, with innovations like pre-measured dose pods and environmentally friendly packaging such as biodegradable materials and compostable paper. As economic growth continues, coupled with changing work dynamics and increased travel, the demand for premium-quality coffee remains steady.

Moreover, the concerns about environmental and ecological aspects drive collaborations for more sustainable practices, including recyclable paper-based containers. In cafes and bars, flavored coffee options cater to diverse tastes, appealing to younger generations like Gen Z. While caffeine remains a natural stimulant, there's a growing interest in decaffeinated options due to concerns about restlessness and elevated blood pressure. Despite fears and anxieties, the coffee market continues to thrive, adapting to evolving consumer preferences and market dynamics.

Coffee Pods Market Scope
Report Coverage	Details
Page number	164
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 5.22%
Market growth 2023-2027	USD 9.99 billion
Market structure	Fragmented
YoY growth 2022-2023(%)	5.13
Regional analysis	Europe, North America, APAC, South America, and Middle East and Africa
Performing market contribution	Europe at 40%
Key countries	US, China, Germany, Italy, and France
Competitive landscape	Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks
Key companies profiled	Alois Dallmayr KG, Baronet Coffee Inc., Beantown Roasters Inc., Dualit Ltd., Illycaffe SpA, Inspire Brands Inc., Iris Group Pte. Ltd., JAB Holding Co. Sarl, Luigi Lavazza SpA, maxingvest AG, Nestle SA, Rogers Family Co., Starbucks Corp., Strauss Group Ltd., The J.M Smucker Co., Trilliant Food and Nutrition LLC, White Bear Coffee Co., WP Coffee, Puro Gusto Ltd., and The Kraft Heinz Co.
Market dynamics	Parent market analysis, market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period.
Customization purview	If our market research report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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What are the Key Data Covered in this Market Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting of the market between 2023 and 2027
• Precise estimation of the size of the market size and its contribution to the parent market
• Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
• Growth of the market industry across Europe, North America, APAC, South America, and Middle East and Africa
• Thorough market growth analysis of the market’s competitive landscape and detailed information about vendors
• Comprehensive market analysis and report on the factors that will challenge the market research and growth of market companies

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