Coffee Market

The global Coffee market size was worth around USD 102.32 billion in 2021 and is predicted to grow to around USD 141.31 billion by 2028 with a compound annual growth rate (CAGR) of roughly 4.72% between 2022 and 2028. The report analyzes the global Coffee market’s drivers, restraints/challenges, and the effect they have on the demands during the projection period. In addition, the report explores emerging opportunities in the global Coffee market.

Global Coffee Market: Overview

The majority of people consume coffee in the morning to boost their energy. It is a fundamental component of food culture in many different countries, and it is especially pervasive in the foodservice industry. One of the most traded commodities in the entire globe is it. A study found that drinking coffee consistently raises life expectancy, decreases pain, boosts fiber intake, protects against liver cirrhosis, and reduces the risk of type 2 diabetes, Alzheimer's, depression, and heart disease. A variety of coffee drinks are available on the market.

The COVID-19 outbreak had a substantial impact on market growth due to the social segregation and lockdown measures imposed on cafés, micro-roasteries, restaurants, and other out-of-home outlets. Throughout the projected period, market growth may be constrained by variations in coffee bean prices as well as climate change-related supply deficits. In the anticipated time frame, increased R&D spending and ongoing technological advancements are expected to create significant opportunities for market participants, enabling them to take advantage of their key competitive advantages, distribution networks, portfolios, and untapped markets.

Key Insights

• As per the analysis shared by our research analyst, the global Coffee market is estimated to grow annually at a CAGR of around 4.72 % over the forecast period (2022-2028).
•  In terms of revenue, the global Coffee market size was valued at around USD 102.32 billion in 2021 and is predicted to grow to around USD 141.31 billion by 2028.
• Due to a variety of driving factors, the market is predicted to rise at a significant rate. Multiple factors drive the coffee market, a few being the increasing demand for certified coffee products, the acceptance of single-serve coffee brew systems by consumers, and the constant innovation led by the top players in the coffee market.
• Based on product type, the instant coffee segment was predicted to show maximum market share in the year 2021
• Based on distribution channel, the off-trade segment was predicted to show maximum market share in the year 2021
• On the basis of region, Europe was the leading revenue generator in 2021.

Global Coffee Market: Growth Drivers

Rise in the Disposable Income and Improvement in Standard of Living to Shoot Up Demand.

Over the analysis period, from 2020 to 2030, an increase in consumer disposable income, the presence of white collar demographics, and an increase in the number of food service outlets are projected to have a significant impact on the growth of the global coffee market. An enormous demand for coffee has been created by an improved standard of living and a change in work ethic, notably in the corporate world. The worldwide coffee industry is anticipated to gain from an increase in demand for organic coffee as a result of growing knowledge of its health benefits between 2020 and 2030. The development of new coffee tastes by a variety of businesses, including Starbucks Corporation, Café Coffee Day (CCD), and Barista Coffee Company Limited, is also likely to contribute to coffee's growth in the years to come.

Global Coffee Market: Restraints

Fluctuating prices of coffee beans

One of the most widely exchanged commodities worldwide is coffee. Both countries that produce coffee and those that don't are rapidly increasing their coffee consumption. To fulfil the rising demand for coffee, controlling the lack of supply is a difficult task. Additionally, coffee productivity is also impacted by climate change, which adds price volatility. The plant disease "coffee rust" or "la roya," a fungus that infects the leaf and decimates the branch and the coffee cherry, tends to spread as the temperature rises. As a result, pests, plant illnesses, and flaws in coffee beans reduce the amount of coffee available for sale. The discrepancy between supply and demand results in higher product pricing.

On the other side, excess results in cheap product pricing. For instance, the International Coffee Organization (ICO) reports that higher coffee supplies in the 2017–18 crop year have resulted in increased shipments in August 2018, with global exports rising 6.3% to 11.1 million bags from August 2017. Global coffee consumption was expected to have increased 1.8% in 2017–18 to 162.23 million bags. However, 2.58 million more bags of coffee than expected were produced. The low costs of coffee during this time have been influenced by this excess.

Changing prices have an impact on production costs, which further influences how much a product will cost. The manufacturers' profits might suffer as a result. As a result, the market for coffee cannot expand due to fluctuating coffee bean prices.

Global Coffee Market: Opportunity

Rising consumer preferences for organic coffee

The demand for organic coffee is expanding quickly. This growth is mostly ascribed to technological advancements, increased competition, and creative marketing strategies, particularly in environments with intense competition. The preference for organic food items among consumers is also a result of the global rise in health consciousness. The consumption of organic coffee, which is grown without the use of synthetic materials like the majority of pesticides, herbicides, and fertilizers, has gained popularity among customers. Since it contains no toxic residue from pesticides, herbicides, synthetic fertilizers, herbicides, or artificial flavors or colors, organic coffee is gaining popularity for its variety of health benefits. Additionally, organic coffee is regarded as an environmentally beneficial product because it doesn't use chemicals in its manufacturing, processing, or packaging and doesn't harm the environment. Thus, the preference for organic products creates an opportunity for players in the global coffee market.

Global Coffee Market: Challenges

Limited Product Awareness

The consumption of coffee is rising worldwide, although emerging countries have a relatively low rate of pod and capsule use. Despite the fact that the Asia-Pacific region is a major producer of coffee, the majority of the beans are sent to the US and Italy to be put into capsules or pods. Among the largest coffee-producing nations in the Asia-Pacific are Indonesia, Vietnam, East Timor, Laos, Myanmar, the Philippines, and Thailand. However, compared to North America and Europe, these nations adopt coffee pods and capsules at a slower rate. The main causes of the lack of knowledge and adoption of coffee capsules and pods in developing countries are their low availability, the sparse presence of market players in rural areas, and their high prices for fresh coffee, capsules, and pods. Manufacturers of coffee must overcome these obstacles in order to maintain their positions in the expanding market by concentrating on marketing techniques and introducing product variants at competitive pricing for the expanding middle-class customer groups.

Global Coffee Market: Segmentation

The global Coffee market is segmented based on product type, distribution channel and region

Based on Product Type, the market is divided into whole-bean, ground coffee, instant coffee, coffee pods, and Others. The instant coffee segment is anticipated to have a sizable market share in the coffee industry. Instant coffee, which is quite popular, is made from powdered or granulated coffee beans. This appeal is due to its accessibility, affordability, and simplicity of consumption. The popularity of instant coffee is increased by the fact that it comes in a variety of flavors. Additionally, instant coffee has a low caffeine content and a high antioxidant content that supports metabolism. All of these elements are anticipated to accelerate market growth over the next few years.

Based on distribution channel, the market is segmented into on-trade and off-trade. According to forecasts, the off-trade category will expand quickly over the coming years due to rising individual coffee consumption and increased retail sales as a result of increased e-commerce activity. The expanding urban population is also increasing the attractiveness of the off-trade sector.

Recent Developments:

• In July 2018, Keurig Dr Pepper made an announcement of successful merger of Dr Pepper Snapple Group and Keurig Green Mountain. This merger has resulted in the formation of the seventh largest food and beverage firm in the US.
• In August 2020, Coca Cola North America has announced a new Coca Cola with Coffee brand of ready-to-drink products expected in aisles across the United States in January 2021.

Europe to lead the market growth during the projection period

The creation of new products with technological advancements, the rising demand for convenient coffee capsules and pods, as well as the adoption of automatic bean-to-cup machines, are just a few of the causes that may be credited to the domination of the regional market. Additionally, the highest coffee consumption in the world is found in a number of European nations. The largest coffee-consuming nations in the world include Finland, Norway, Iceland, Denmark, the Netherlands, Sweden, Switzerland, Belgium, and Luxembourg. Major firms working together and forming strategic alliances are anticipated to help the market expand in the area. For instance, in May 2018, Nescafé and Starbucks established a long-term licensing alliance. Nescafé will be permitted to market Starbucks goods throughout Europe, Asia, and Latin America under the conditions of the cooperation. The market's expansion is also being aided by the presence of significant market players in the area, particularly in Italy, including Nestlé S.A., The Kraft Heinz Company, Luigi Lavazza S.p.A., and Dualit Limited.

Global Coffee Market: Competitive Analysis

The global Coffee market is driven by players like Nestle SA (Switzerland), Tata Global Beverages Limited (India), Illycaffè S.p.A. (Italy), Keurig Dr. Pepper, Inc. (US), Starbucks Corporation (US), The Coca Cola Company (US), Jacobs Douwe Egberts (Netherlands), Strauss Group Ltd (Israel), The Kraft Heinz Company (US), The J.M. Smucker Company (US) and among others.

The global Coffee market is segmented as follows:

By Product Type

• Whole-Bean
• Ground Coffee
• Instant Coffee
• Coffee Pods
• Others

By Distribution Channel

• On-Trade
• Off-Trade

By Region

• North America
• Europe
• Asia Pacific
• The Middle East & Africa
• Latin America

Frequently Asked Questions (FAQs):

Which key factors will influence Global Coffee market growth over 2022-2028?

• Multiple factors drive the coffee market, a few being the increasing demand for certified coffee products, the acceptance of single-serve coffee brew systems by consumers, and the constant innovation led by the top players in the coffee market.

What will be the value of the Global Coffee market during 2022-2028?

• According to Market Research, the global Coffee market size was worth around USD 102.32 billion in 2021 and is predicted to grow to around USD 141.31 billion by 2028 with a compound annual growth rate (CAGR) of roughly 4.72% between 2022 and 2028.

Which region will contribute notably towards the Global Coffee market value?

• The global Coffee market is anticipated to generate the highest revenue from Europe. In a survey conducted by the Institute for Scientific Information on Coffee (ISIC), 68% of the respondents said they often consumed coffee while working. This trend is leading to a huge demand for coffee in European countries like Germany, Italy, Spain, and the United Kingdom.

Which are the major players leveraging the Global Coffee market growth?

• The global Coffee market is driven by players like Nestle SA (Switzerland), Tata Global Beverages Limited (India), Illycaffè S.p.A. (Italy), Keurig Dr. Pepper, Inc. (US), Starbucks Corporation (US), The Coca Cola Company (US), Jacobs Douwe Egberts (Netherlands), Strauss Group Ltd (Israel), The Kraft Heinz Company (US), The J.M. Smucker Company (US) and among others.