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The hot drink market size is forecast to increase by USD 62.62 billion, at a CAGR of 5.34% between 2023 and 2028.
The APAC market experiences growth propelled by rising consumption of hot drinks with growing global demand and adoption of tea and coffee, influenced by changing consumer preferences, urbanization, and the expanding middle-class income and population. Ajinomoto Co. Inc. contributes to this trend by providing hot drink products like Blendy 3 in 1 powdered drinks, featuring a combination of coffee and masala chai.
The market shows an Accelerate CAGR during the forecast period.
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Rising demand for premium and artisanal hot drink varieties is notably driving the market growth. The market is experiencing a surge in demand for premium and artisanal varieties, encompassing specialty coffees, high-quality teas, and unique flavour profiles. This rising trend is reshaping the industry as consumers increasingly seek elevated sensory experiences and distinct taste profiles in their hot beverage choices. However, the shift towards unique flavour profiles is evident in the introduction of innovative and distinctive hot drink offerings.
Manufacturers are increasingly leveraging unconventional flavour combinations such as floral-infused teas, spiced coffee blends, and decadent hot chocolate varieties, to captivate consumers with novel sensory experiences. This trend aligns with the consumer inclination towards exploration and experimentation, as well as the desire for personalized and memorable hot drink encounters. Thus, such factors are expected to increase the demand for hot drinks, which will drive the growth of the market during the forecast period.
Advancements in brewing technologies are an emerging trend shaping the market growth. Advances in brewing technologies are reshaping the global market, with the emergence of single-serve brewing systems and speciality brewing equipment playing a pivotal role in redefining the consumer experience and market dynamics. The emergence of speciality brewing equipment has marked another significant advancement in brewing technologies within the market. Speciality brewing equipment encompasses a spectrum of innovative devices designed to elevate the art of hot drink preparation, catering to discerning consumers with a penchant for expertly brewed and customized beverages. Examples of such equipment include precision temperature-controlled kettles, manual pour-over drippers, siphon brewers, and espresso machines that offer advanced customization and control over brewing parameters.
For instance, companies such as Hario and Breville have introduced speciality brewing equipment that enables enthusiasts to explore and refine their hot drink brewing techniques, emphasizing factors such as water temperature, brewing time, and extraction consistency to achieve optimal flavours and aromas in their beverages. This focus on precision and personalization aligns with the growing interest in artisanal and high-quality hot drinks, appealing to connoisseurs seeking an immersive and customizable brewing experience. Thus, such factors are expected to increase the demand for hot drinks, which will propel the growth of the market during the forecast period.
Competition from alternative non-beverages is a significant challenge hindering market growth. The global market has encountered formidable competition from alternative beverages, including energy drinks, flavoured water, and functional beverages, leading to noticeable ramifications on consumer preferences and market dynamics. The proliferation of these alternative options has presented challenges to the traditional dominance of non-beverages, exerting a discernible impact on consumption patterns and market share.
Moreover, The rise of functional non-beverages such as wellness shots, vitamin-infused drinks, and probiotic elixirs, has presented a significant threat to the market. These non-beverages are formulated with targeted health and wellness benefits, catering to consumers seeking functional and purposeful beverage options. Additionally, the market share of hot drinks has been impacted as functional non-beverages have successfully positioned themselves as viable choices for individuals seeking holistic wellness support in a convenient and palatable form. Thus, such factors are expected to hamper the market during the forecast period.
The advent of innovative flavors will fuel the coffee segment which will increase the market growth. The coffee segment holds a prominent and influential position within the global market due to the growing interest in specialty and gourmet coffee among consumers. In addition, the coffee segment includes specialty coffee and ready-to-drink (RTD) coffee. The emergence of innovative coffee flavors and formulations has captured consumer attention, fostering a penchant for unique and experiential coffee encounters. Examples include the introduction of spiced coffee blends, botanical-infused coffee beverages, and limited-edition seasonal coffee releases, offering consumers diverse and captivating flavor experiences. This emphasis on novelty and flavour diversification has contributed to the segment's vibrancy and adaptability to evolving consumer preferences. Thus, the abovementioned factors are expected to increase the demand for coffee, which will drive the growth of the coffee segment in the market during the forecast period.
The offline segment is estimated to witness significant growth during the forecast period. The offline segment in the global market encompasses traditional brick-and-mortar retail channels, including supermarkets, specialty stores, cafes, and convenience stores, where consumers physically purchase products. The offline segment's enduring relevance lies in its ability to deliver tangible, sensory, and experiential aspects of consumption that transcend the purely transactional nature of online retail.
The offline segment was the largest segment and was valued at USD 141.01 billion in 2018.
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Moreover, through personalized service, product demonstrations, and social interactions, offline channels offer consumers a multi-sensory journey, building brand loyalty and fostering emotional connections with hot drink brands and products. Thus, such factors are expected to increase the demand for offline channels, which will drive the growth of the offline segment in the market during the forecast period
APAC is estimated to contribute 37% to the growth of the global market during the forecast period
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Technavio's analysts have provided extensive insight into the market forecasting, detailing the regional trends and drivers influencing the market's trajectory throughout the forecast period. The APAC region holds a significant share of the global market. With a diverse array of cultures, rich tea traditions, and a burgeoning coffee culture, APAC has become a pivotal hub for innovation, consumption, and market expansion within the hot drink industry. In recent years, APAC has witnessed a remarkable surge in hot drink consumption, driven by evolving consumer preferences, increased urbanization, and a burgeoning middle class. The region's robust tea-drinking traditions, particularly in countries such as China, Japan, and India, have historically played a central role in shaping the regional market. The rapid growth of the APAC region is further exemplified by the rising adoption of Western hot drink trends in South Korea and Southeast Asian countries.
In addition, the infusion of local flavours and ingredients offerings highlights the region's ability to blend tradition with innovation, creating a unique and diverse landscape. Thus, the abovementioned factors are expected to increase the demand for hot drinks, which will drive the growth of the regional market during the forecast period.
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 forecasting growth and analysis.
The market growth and forecasting report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Colcafe Industria Colombiana de Cafe, jacobs DOUWE EGBERTS B.V., Keurig Green Mountain Inc., LUIGI LAVAZZA S.p.A., Mother Parkers Tea and Coffee Inc., Nestle SA, Paulig Ltd., Peets Coffee Inc., Reily Foods Co., Starbucks Corp., Strauss Group Ltd., Tata Consumer Products Ltd., TEEKANNE GMBH and CO., Cornish Tea Ltd., The J.M Smucker Co., The Republic of Tea Inc., Unilever PLC, and Wuxi Huadong Cocoa Food Co. Ltd.
The market analysis and report of qualitative and quantitative analysis of companies 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 companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market report forecasts market growth by revenue at global, regional & country levels and provides a market research and growth analysis of the latest market trends and analysis and growth opportunities from 2018 to 2028.
The Hot Drink Market is witnessing increased beverage consumption, particularly in the hot beverages segment, which includes organic options like apple cider and mulled wine. The rising global demand for tea and coffee, driven by a shift in lifestyle and adoption trends, is notable. The market is also influenced by the growing demand for hot beverages in the cosmetic industry. Despite challenges such as fluctuating raw material prices, national lockdowns, and social distancing norms, the market remains resilient. Efficient packaging machines play a crucial role, in addressing demands even during uncertain times. The demand has seen fluctuations due to stockpiling behaviors, high unemployment rates, and rising prices, especially for non-essential items.
The market experiences a surge with the rising preference for organic hot beverages among consumers seeking healthier options. This trend aligns with the increasing consumption of tea and coffee globally, driven by their comforting flavors and perceived health benefits. Moreover, the market witnesses growth spurred by the demand from the cosmetic industry, which utilizes raw materials derived from tea and coffee for various skincare products. As a result, producers are stockpiling products to meet the growing demand, indicating promising opportunities in the hot drink market fueled by consumer preferences and industrial needs.
Market Scope |
|
Report Coverage |
Details |
Page number |
98 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 5.34% |
Market Growth 2024-2028 |
USD 62.62 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
4.5 |
Regional analysis |
APAC, North America, Europe, South America, and the Middle East and Africa |
Performing market contribution |
APAC at 37% |
Key countries |
US, China, Japan, India, and UK |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Ajinomoto Co. Inc., Bigelow Tea, Colcafe Industria Colombiana de Cafe, jacobs DOUWE EGBERTS B.V., Keurig Green Mountain Inc., LUIGI LAVAZZA S.p.A., Mother Parkers Tea and Coffee Inc., Nestle SA, Paulig Ltd., Peets Coffee Inc., Reily Foods Co., Starbucks Corp., Strauss Group Ltd., Tata Consumer Products Ltd., TEEKANNE GMBH and CO., Cornish Tea Ltd., The J.M Smucker Co., The Republic of Tea Inc., Unilever PLC, and Wuxi Huadong Cocoa Food Co. Ltd. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
Customization purview |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Distribution Channel
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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