RTD coffee market set to grow as premiumization trend gains traction
Starbucks Frappuccino Malaysia. Shutterstock_1917135881
The global ready-to-drink coffee market is set to witness growth at a CAGR of 8.3% and is anticipated to reach a valuation of around US $42.3 billion by 2032, according to a Future Market Insights (FMI) study.
Premiumization is one of the most important drivers in the majority of developed markets. Almost all categories of products have two strands that serve different purposes. The rise of the middle class is reportedly driving the trend of affordable luxury.
More customers now have the means to elevate ordinary moments. Despite the uncertainty, consumer sentiment is rising, and consumers are experimenting with new flavour profiles and product categories.
The desire for knowledge and transparency about how and what we consume has also encouraged premiumization, which is driven by the value-driven millennial consumer who wishes to demonstrate their opinions through inconspicuous consumption. The second driver, absolute luxury, on the other hand, is a sign of exclusivity, says FMI.
It has evolved from overt displays of money to consumers displaying culture capital, exclusivity, and knowledge, all of which make for compelling stories. This strand represents the true ‘rich person,’ who wishes to prove wealth but in a less tangible, ‘meaningful’ way.
It manifests itself in a stronger desire to attempt to buy goods with an interesting story, craft credentials, clout, and provenance in the beverage industry. People are not overspending or recklessly spending, but their individual budgets now also include spendable money. It’s a low-cost luxury, and premiumization is on the rise.
Some key takeaways from the FMI market study:
- The market is segmented based on nature, wherein the conventional ready-to-drink coffee is anticipated to account for around 87% of the market share over the forecast period.
- The North American ready-to-drink coffee market is anticipated to dominate the global market with a market share of around 29% in 2022.
- On the basis of type, original ready-to-drink coffee is expected to hold a prominent share in 2022, but flavoured ready-to-drink coffee is expected to witness a lucrative growth rate over the forecast period.
- Growing obesity rates among adults and children, busy lifestyles, unhealthy diets among adults and children, and tight working time are all factors driving consumers toward healthier options of convenience food. Ready-to-drink coffee is another functional drink that has been shown to have nutritional benefits. As the diabetic population and calorie-conscious consumers look for alternatives to sugar in their drinks, the rate of priority for antioxidant-enriched beverages among them is increasing.
“The key players operating in the global ready-to-drink coffee market are focusing on strengthening its distribution channel, partnership, merger & acquisition to reach larger consumer base,” says a research analyst at Future Market Insights.
Competitive Landscape
Companies are focusing on launching innovative drink blends with different flavours such as chocolate, vanilla, various milk flavours, customised sugar and ice level drinks and so on in order to attract the Gen-Z and millennial segment. Millennials are known for their eagerness to try new innovative flavours, which creates an opportunity for producers to introduce new flavoured ready-to-drink coffee to the market. The following are some noteworthy market developments:
- As part of the global coffee alliance, Seattle-based Starbucks and Swiss food and beverage giant Nestlé will launch ready-to-drink (RTD) coffee products in Oceania, Latin America, and Southeast Asia by 2022.
These insights are based on a report on Ready to Drink Coffee Market by Future Market Insights. Access the report here.
