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The instant coffee market size is projected to increase by USD 13.36 billion, at a CAGR of 6.02% between 2023 and 2028.
The global market experiences a surge in growth rate due to shifting consumer preferences towards convenience with a preference for instant coffee over tea. This trend, driven by millennial preferences, is further propelled by the expansion of organized retailing outlets, facilitating easy access to such products. With a focus on the benefits and convenience, the market witnesses an uptick in consumption, aligning with global trends and forecasts. This shift underscores the market's evolving dynamics and demands a thorough analysis of emerging markets. Additionally, Keurig Dr Pepper Inc. company offers instant coffee under the brand name Van Houtte such as Van Houtte Original House Blend Medium Roast Instant Coffee, Van Houtte House Blend Dark Roast Instant Coffee, Van Houtte Colombian Medium Roast Instant Coffee, and others
The market shows an Accelerated CAGR during the forecast period.
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The rising popularity of instant coffee among millennials is the key factor driving the market. Millennials, referring to individuals in the age group 21-36 years, have a higher spending power than that of baby boomers, and it is expected to increase during the forecast period. Consumption among millennials is increasing, with flavored instant drinks becoming particularly popular. Companies are introducing new products targeting the millennial population. Starbucks, for instance, has added and offered three new coffee flavors as part of its Cold Craft range over the last three years with carbon-neutral production processes.
Moreover, instant coffee flavor drinks are gaining popularity among millennials in China due to their health and wellness properties. Brands like Massimo Zanetti Beverage have outlets in China that cater to millennial consumers influenced by Western lifestyles and dining habits due to advanced production processes. In India, millennial consumers demand flavored Coffee from shops such as Starbucks. The increasing popularity among millennials will support the growth of the market during the forecast period.
The rising demand for instant espresso coffee at home is the primary trend shaping the market. The preparation of espresso at home is a challenge as specialized espresso machines are required to prepare pure espresso. Consumers in developed countries such as the US, however, prepare espressos at home, as is indicated by the rise in the purchase of espresso machines by individual consumers. For instance, one in seven consumers in Canada owned a home espresso machine.
Further, various players, including Nestle SA and Starbucks Corp., offer new espresso coffee pods that are used in espresso machines. JDE Peets NV offers four new espresso blend capsules, which are compatible with Nespresso OriginalLine machines. The new range includes Ricchezza, Crema Scura, Ristretto, and Nerissimo. Increasing the brewing of espresso at home can have a positive impact on the market during the forecast period.
The rising threat from substitute products is a challenge that affects the market expansion. The growing popularity of other hot and cold beverages, such as roast and ground, soft drinks, carbonated drinks, nutritional and energy drinks, green tea, iced tea, pods, and cold coffee, has been a major challenge for the market for the last three decades. With the advent of energy drinks such as Stokely-Van Camps Gatorade and RED BULL, consumption has seen a slight decline in several developed markets across the world. Further, the rising demand for iced tea and the increasing number of market players offering various innovative flavors in iced tea, green tea, and organic tea segments threaten market expansion.
Furthermore, the rising demand for cold drinks and the emergence of several cafes worldwide that offer variants, such as frappe and cold-brewed drinks, have reinforced the threat to the market. Therefore, vendors must come forward with aggressive marketing strategies and introduce innovative products with appealing packaging options to tap the potential of the various key markets across the world. Thus, the rising threat from substitute products will hamper the growth of the market during the forecast period.
The offline?segment will account for the largest share of this segment.?The market has witnessed significant growth in recent years, with an increasing number of consumers opting for convenient and quick beverage options. One prominent offline channel in the market is supermarkets and hypermarkets. Additionally, major vending machine companies such as Nestle SA and Keurig Dr Pepper Inc have started incorporating such options in their machines, expanding the distribution to more locations. Supermarkets, convenience stores, specialty shops, and vending machines are notable examples of offline distribution channels that play a significant role in making them readily available to consumers worldwide, which, in turn, will drive the growth of the offline distribution channel segment in the market during the forecast period.
The market share by the spray-dried segment will be significant during the forecast period. Spray drying is the most common method adopted for manufacturing. It involves scattering the extract into a stream of hot air at the top of a tall cylindrical tower. As the droplets fall, they dry and transform into fine powder by the time they reach the bottom. As the powdery form is too fine, it undergoes further agglomeration to form granules that have the consistency between that of powder and freeze-dried. This type has high demand as it is cheap and saves preparation time.
The spray-dried segment was valued at USD 21.51 billion in 2018.
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However, the spray drying process uses high temperatures and causes the to lose its natural properties. In 2023, the spray-dried segment led the market in APAC, South America, and the Middle East and Africa (MEA). Most countries in these regions are still undergoing economic evolution and development. The lower prices of spray-dried products than freeze-dried counterparts and the rising number of new vendors adopting the spray-dried technology will likely drive the market during the forecast period.
APAC is estimated to contribute 31% 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. China, Japan, South Korea, Australia, Malaysia, the Philippines, Vietnam, India, Taiwan, Thailand, Singapore, and Indonesia are the major markets that project high potential for companies in APAC. Nestle SA, Unilever PLC, Starbucks Corp., Tata Consumer Products Ltd, and others were some of the major companies in the market in APAC in 2023. Additionally, rising disposable incomes of consumers in developing economies of APAC, and expanding cafe culture in countries such as India, China, Japan, South Korea, and Australia will be the major drivers of the market in APAC 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:
Anthonys Goods, Death Wish Coffee Co., Giraldo Farms, Illycaffe Spa, Lens Coffee LLC, Louis Dreyfus Co. BV, LUIGI LAVAZZA S.p.A., Massimo Zanetti Beverage Group Spa, Nestle SA, Starbucks Corp., Strauss Group Ltd., Tata Consumer Products Ltd., Tchibo GmbH, The J.M Smucker Co., UCC UESHIMA COFFEE CO. LTD., Unilever PLC, Waka Coffee Inc., Bevzilla, and The Good life Co.
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 research report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the market growth and trends opportunities from 2018 to 2028.
The market continues to expand rapidly, driven by consumer demand for convenient beverages in our fast-paced lifestyles. With advanced production processes, companies like Nestle India and Keurig Green Mountain are innovating to meet business-to-business and direct-to-consumer models. Independent retailers and supermarkets/hypermarkets are key players in distributing these products, tapping into income levels across demographics.
Additionally, flavoring plays a significant role, from traditional brewed coffee to specialty instant coffee with authentic flavors like caramel and hazelnut. Coffee roasters play a crucial role in producing high-quality instant coffee by carefully roasting beans to achieve the desired flavor profile, which is then processed into instant coffee for convenient consumption. Artisan coffee blends and premium coffee beans are favored by coffee lovers seeking functional benefits and health and wellness. The freeze-drying process involves coffee research on the prospects of Beat coffee, blue Bottle coffee, cappuccinos, flavored coffee, and freeze-dried.
Furthermore, packaging designs, including sachets and pouches, ensure long shelf life and easy preparation with minimal equipment. Freeze-drying and spray-drying processes preserve coffee flavor while maintaining carbon-neutral production processes. Italian roast, Leo Coffee, light roast, and mocha are also some roast coffee types available in supermarkets & hypermarkets. As the fastest-growing market in hot water instant coffee research, the market faces restraints such as acrylamide concerns and neurotoxic implications. However, with innovations in technology and flavoring, the future of instant coffee looks promising.
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Market Scope |
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Report Coverage |
Details |
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Page number |
164 |
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Base year |
2023 |
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Historic period |
2018-2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 6.02% |
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Market Growth 2024-2028 |
USD 13.36 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
5.36 |
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Regional analysis |
APAC, Europe, North America, South America, and Middle East and Africa |
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Performing market contribution |
APAC at 31% |
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Key countries |
US, Japan, China, France, and UK |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Anthonys Goods, Death Wish Coffee Co., Giraldo Farms, Illycaffe Spa, ITC Ltd., JDE PEETs NV, Keurig Dr Pepper Inc., Lens Coffee LLC, Louis Dreyfus Co. BV, LUIGI LAVAZZA S.p.A., Massimo Zanetti Beverage Group Spa, Nestle SA, Starbucks Corp., Strauss Group Ltd., Tata Consumer Products Ltd., Tchibo GmbH, The J.M Smucker Co., UCC UESHIMA COFFEE CO. LTD., Unilever PLC, Waka Coffee Inc., Bevzilla, and The Good life Co. |
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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. |
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Customization purview |
If our 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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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Product
7 Market Segmentation by Distribution Channel
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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