Hot Beverages (Coffee & Tea) Market

Hot Beverages (Coffee & Tea) Market Outlook 2023-2033

Global demand for hot beverages is anticipated to increase at a CAGR of 6% during the forecast period (2023 to 2033). As a result, the global hot beverages (coffee & tea) market is expected to increase from a valuation of US$ 771 billion in 2023 to US$ 1,390 billion by the end of 2033.

Hot beverages are consumed to remain energetic and warm. In recent years, the demand for various hot beverages has been increasing rapidly around the world. Tea and coffee are frequently consumed by people across the globe and are considered highly energetic hot beverages. A lot of health benefits are associated with the consumption of hot beverages.

These beverages are helpful for the relaxation of the brain muscles, further helping to stimulate the level of energy. Price, convenience, and taste are three vital factors that are estimated to benefit the growth of the hot beverages market over the coming years.

People around the world are taking interest in different coffee flavors. French vanilla, hazelnut, mocha, caramel, maple, etc. are different coffee flavors, which are gaining traction. Hot beverages such as tea and coffee are popular owing to their detoxifying and de-stressing advantages.

In the past few years, there has been a noticeable increase in the number of cafes and coffee shops, around the world. McDonald’s is one the leading café chains offering coffee as an alternative to its fizzy beverages. These initiatives by cafes and restaurant chains are predicted to increase sales of tea and coffee in the global hot beverages market.

Demand for green tea is anticipated to increase over the coming 10 years. Furthermore, manufacturers are taking initiatives to introduce ready-to-drink (RTD) beverages, including coffee pods that are widely used to prepare coffee by dipping them in water. These innovations are projected to fuel demand for hot beverages over the forecast period.

However, the prices of raw materials are not fixed but rather keep on fluctuating on a regular basis, which is estimated to impact the sales of hot beverages to some extent. Moreover, the demand for hot beverages is also based on seasons, which results in a reduction in their sales mostly during the summers.

In addition, excess consumption of hot beverages can adversely impact human health. Addiction to tea and coffee can result in anxiety and can also lead to the formation of carcinogens.

In this recently published research report by Fact.MR, a provider of market research and competitive intelligence, various growth determinants and segments, including distribution channel, product type, application, and region are discussed in detail. Further, key data analysis is also provided in the form of infographics, statistics, and presentations.

Report Attributes	Details
Hot Beverages (Coffee & Tea) Market Size in 2023	US$ 771 Billion
Estimated Market Value (2033)	US$ 1,390 Billion
Global Market Growth Rate (2023 to 2033)	6% CAGR
Canada Market Growth Rate (2023 to 2033)	4.8% CAGR
Germany Market Growth Rate (2023 to 2033)	4.3% CAGR
Key Companies Profiled	Celestial Seasonings, Inc. Harney & Sons Jacobs Douwe Egberts Luigi Lavazza S.p.A. R. Twining and Company Limited Starbucks Corporation Tata Global Beverages Tim Hortons Inc.

Which Factors are Stimulating the Demand for Hot Beverages?

“Growing Awareness about Harmful Effects of Carbonated Drinks”

In recent years, there has been a rising awareness among consumers about the harmful effects associated with carbonated drinks. As a result, their choices are shifting from carbonated drinks to hot beverages. Young people are getting attracted to the different health benefits of hot beverages. Tea and coffee prevent harmful diseases, including obesity, blood pressure, diabetes, etc.

“Product Innovations in Hot Beverages”

Manufacturers of hot beverages use a wide variety of ingredients to produce innovative flavors of coffee and tea with added health benefits. Many individuals look for new fancy hot beverage options, including lattes, americanos, flat whites, cappuccinos, etc., which are gaining popularity. The increasing demand for new flavors of coffee and tea can bring lucrative opportunities for new entrants in the hot beverages market.

Which Factors Can Adversely Impact the Sales of Hot Beverages?

“Increasing Popularity of Cold Beverages and Fluctuations in Prices of Raw Materials”

Generation Y is more inclined to consume cold beverage products, including iced tea, cold coffee, etc. Many people are consuming cold beverages due to their ability to help in maintaining lower core temperature.

The constantly fluctuating prices of raw materials are expected to slow down the demand for hot beverages. Also, the demand for hot beverages is based on the season, which can result in reduced sales during the summer.

Which Factors are Projected to Fuel the Demand for Coffee & Tea in Asia Pacific?

“Increasing Number of Franchise Outlets in the Region”

Asia Pacific is anticipated to hold a substantial share of global revenue, which is expected to increase at a CAGR of 8% during the forecast period from 2023 to 2033. This remarkable growth is attributed to the growing number of franchise outlets across the region.

Increasing number of different hot beverage brands in the region is also predicted to have a positive impact on sales of hot beverages. In addition, the rising population of millennials, who are considered prominent consumers of tea and coffee, is expected to drive the demand for hot beverages over the coming years.

Several consumers want authentic and unique flavor options of tea in the Asia Pacific. Increasing awareness about the advantages of hot beverages and a growing millennial population are some noteworthy factors fueling demand for hot beverages in the market.

Country-wise Insights

How is Japan Expected to Perform in the Hot Beverages Market?

“High Popularity of Tea in Japan Offering New Opportunities”

Demand for hot beverages (coffee & tea) in Japan is projected to grow at a CAGR of 3.4% during the forecast period from 2023 to 2033. Tea is considered to be the most popular beverage in Japan. It is a part of Japanese food culture and there are a few restaurants in Japan, which serve tea free of cost.

Which Factor is Propelling the Demand for Hot Beverages in the United States?

“Rising Cases of Obesity Fueling Consumption of Hot Beverages”

Sales of hot beverages in the United States were more than US$ 176.5 billion in the year 2022. Various types of ready-to-drink tea, including capsules, tea bags, and others are gaining popularity in the United States. One out of every six people is suffering from obesity, which can lead to some severe health issues. So, Americans are shifting their preferences from soda and other related drinks to hot beverages, including tea and coffee.

Demand for hot beverages in Canada is anticipated to increase at a CAGR of 4.8% from 2023 to 2033.

Should Suppliers of Hot Beverages Look towards Germany?

“Growing Demand for Instant Coffee and Ready-to-Drink Products”

Sales of hot beverages in Germany are forecasted to progress at a CAGR of 4.3% from 2023 to 2033. This growth is due to the rising demand for coffee pods in Germany. In addition, increasing sales of instant coffee and ready-to-drink products are expected to generate lucrative opportunities for suppliers of hot beverages.

Category-wise Insights

Why is Demand for Coffee Increasing around the World?

“Rising Production of Innovative and New Coffee Flavors”

Based on product, the global hot beverages market is classified into coffee, tea, and cocoa. Among these, sales of coffee are estimated to increase rapidly at a CAGR of 7.7% from 2023 to 2033. Rising demand for different varieties of organic coffee has resulted in the production of new and innovative varieties and flavors by manufacturers.

Coffee shops are concentrating on providing natural and instant coffee to youngsters as they prefer coffee over other drinks because coffee contains a higher amount of caffeine, which quickly refreshes the mind.

Tea is projected to advance at a CAGR of 5.4% through 2033, owing to its increased production and consumption in the Asia Pacific region, including Pakistan, Thailand, China, and India. Manufacturers are concentrating on developing unique tea flavors to increase their sales. There is an increase in the demand for masala tea packets because these are considered helpful in improving the immune system’s health.

Which is a Widely Used Distribution Channel to Sell Hot Beverages?

“Offline Distribution Channels Hold Substantial Market Share”

Based on distribution, the global market is classified into offline and online channels. Between these two, offline distribution channels are used extensively for the delivery of different hot beverages and are projected to hold a noticeable share of market revenue.

Key players are concentrating on improving supply chains. They are putting efforts to increase their presence through distributors, including retail stores, supermarkets, grocery stores, and others. Online distribution channels are also expected to grow due to the rising use of smartphones and the growth of the e-Commerce sector.

Competitive Landscape

Prominent suppliers of hot beverages (coffee & tea) are investing huge amounts to strengthen their supply chain management systems. They aim to deliver quality products and adhere to set guidelines for quality control and environmental impact.

Manufacturers are concentrating on unique and premium flavors of tea and coffee to increase their sales.

For instance :

• Organic India Company has prepared masala tea packs, which improve the immune system and metabolism.

Online distribution and premium tea lounges are expected to increase their sales of different hot beverages over the forecast period. Key suppliers of hot beverages are Celestial Seasonings, Inc., Harney & Sons, Jacobs Douwe Egberts, Luigi Lavazza S.p.A., R. Twining and Company Limited, Starbucks Corporation, Tata Global Beverages, and Tim Hortons Inc.

Segmentation of Hot Beverages (Coffee & Tea) Industry Research

• By Product :

  • Coffee
  • Tea
  • Cocoa

• By Consumption Location :

  • Out of Home
  • At Home

• By Distribution Channel :

  • Offline
  • Online

• By Region :

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