Instant Coffee Market

Instant Coffee Market Outlook (2023 to 2033)

The global instant coffee market stands at US$ 42.5 billion in 2023 and is estimated to progress at a CAGR of 5% from 2023 to 2033. As such, worldwide sales of instant coffee are projected to reach a market valuation of US$ 69.2 billion by the end of 2033.

Instant coffee is prepared easily and quickly, which is a crucial aspect and is expected to stimulate the demand for instant coffee over the coming 10 years. Instant coffee is also known as coffee powder and is one of the widely used hot beverages manufactured by grinding roasted coffee beans. Consumers can easily prepare a cup of coffee simply by pouring hot water into an instant mix sachet.

Instant coffee is soluble coffee or coffee powder, which is manufactured from roasted or manufactured coffee beans. In recent years, fresh coffee has been influencing people around the world, instant coffee is consumed globally owing to its faster and simpler way of preparation. The rising popularity of instant coffee is resulting in a shift from conventional coffee to premium instant coffee.

There are two prominent methods to prepare instant coffee:

• Spray Drying: In this method, coffee extract is sprayed into hot air. It quickly dries the droplets and then turns them into small pieces or fine powder.
• Freeze Drying: This method is used to freeze coffee extracts and then cut them into smaller pieces. Thereafter, these pieces are dried at low temperatures in a vacuum.

Compared to brewed coffee, instant coffee has lower caffeine content and higher amounts of antioxidants. Many people consume instant coffee on regular basis, which boosts metabolism, enhances liver health, and improves brain function. Thus, due to these benefits, instant coffee is gaining traction in the market, especially among working-class people.

Manufacturers of instant coffee are introducing various new flavors, including chocolate caramel, cardamom bun, gingerbread cookie, French vanilla, Italian roast, green bean, and mocha. Through these newly launched flavors, instant coffee suppliers are expanding their consumer base. In addition, these value-added products are expected to fetch more margin compared to basic coffee products.

The number of individuals consuming coffee across the world is increasing at a noteworthy rate, which is expected to generate lucrative opportunities for global suppliers in the market.

Report Attributes	Details
Instant Coffee Market Size in 2023	US$ 42.5 Billion
Projected Market Value (2033)	US$ 69.2 Billion
Global Market Growth Rate (2023 to 2033)	5% CAGR
Germany Market Growth Rate (2023 to 2033)	3.6% CAGR
Canada Market Growth Rate (2023 to 2033)	4% CAGR
Key Companies Profiled	Jacobs Douwe Egberts B.V. Starbucks Corporation The J.M. Smucker Company The Kraft Heinz Company Tata Global Beverages Ltd. Nestle Trung Nguyen Matthew Algie Company Limited

Why is Demand for Instant Coffee Increasing across the Globe?

“Growing Demand for Flavored Coffee Variants among Consumers”

Increasing popularity of authentic and unique flavors along with different functional properties of coffee are aiding in the premiumization of instant coffee. Local brands and multinational players are emphasizing the production of multiple authentic flavors of instant coffee. Companies are adopting numerous flavors to meet the preferences of consumers for local authentic coffee.

At present, there has been a constant increase in the demand for flavored coffee around the world. Thus, flavored instant coffee is projected to gain prominence across the globe over the coming years.

“Affordability & Convenience of Instant Coffee Fueling its Demand”

Single-serve packets of instant coffee are affordable and convenient to prepare. Restaurants, hotels, cafés, and households are contributing to the increased demand for instant coffee. Single-use packets enable consumers to try out novel flavors without spending extra on bulk packs.

The coffee-drinking population of numerous countries is projected to grow during the forecast period. Altering food patterns and changing lifestyles are expected to contribute to increased demand for instant coffee.

Which Factor Can Dent the Demand Growth for Instant Coffee?

“Absence of Freshness in Instant Coffee”

The absence of a fresh coffee feel in instant coffee is estimated to restrain its adoption. In addition, instant coffee has a high concentration of acrylamide, which is a chemical compound that can cause cancer in animals. This is expected to bring down the demand for instant coffee.

Which is the Most Lucrative Regional Market for Sales of Instant Coffee?

“Asia Pacific Will Offer Lucrative Opportunities to Market Players”

Asia Pacific is estimated to hold a substantial share of the global market revenue. Various countries from the region are consumers of conventional tea. However, the penetration of instant coffee in the Asia Pacific region is predicted to boost its sales.

Coffee is becoming popular across Mainland China. Instant coffee retailers are expected to gain opportunities owing to shifting preferences and increasing consumption of coffee by millennials. Japan is estimated to hold a noteworthy share of the regional market’s revenue as it is a prominent importer of coffee in the region.

Coffee is also gaining traction in the Australian market. Consumers can opt for any flavor of coffee from a wide variety of options. Further, companies are expanding their footprints with innovative and new product launches for strengthening their supply chain management systems.

Country-wise Insights

What is Driving Sales of Instant Coffee in Japan?

“Rising Popularity of Single-serve Coffee Packaging Format”

• Sales of instant coffee in Japan are predicted to increase at a CAGR of 2.8% from 2023 to 2033.

Japan holds a substantial share as an importer of coffee due to the growing consumption of coffee among people in Japan. In addition, the rising popularity of the single-serve coffee packaging format is also gaining prominence as it is quick and convenient.

Which North American Country Generates Substantial Revenue from Sales of Instant Coffee?

“Increasing Popularity of Instant Coffee in the United States”

• Consumption of instant coffee in the United States crossed the US$ 10 billion market valuation in 2022.

Easy availability of instant coffee through different channels, convenience provided to consumers on different scales, and the moderate price of consumption are estimated to fuel the demand for instant coffee in the United States. Further, a decline in the demand for aerated drinks is also driving sales of instant coffee.

• Sales of instant coffee in Canada are projected to advance at a CAGR of 4% during the forecast period (2023 to 2033).

Why is Instant Coffee Seeing Steady Demand Growth in Germany?

“Age-old Tradition of Consuming Coffee in the Country”

• Demand for instant coffee in Germany is anticipated to expand at a CAGR of 3.6% from 2023 to 2033.

Coffee consumption is a part of Germany’s tradition and culture, which is estimated to propel sales of instant coffee products over the coming years.

Category-wise Insights

Which Type of Instant Coffee is Registering Higher Sales Globally?

“Freeze-dried Instant Coffee Gaining Traction in the Global Market”

Freeze-dried and spray-dried are segments of the global instant coffee market, based on material. Between these two, the freeze-dried segment is anticipated to hold a prominent share of the market’s revenue. Coffee extracts are generally frozen at -400 C and then cut into granules. These frozen granules are dried under a vacuum and at low temperatures. The quality, taste, and aroma are protected by gently drying under extremely low temperatures.

• Freeze-dried instant coffee is expected to be a leading segment in the market over the decade.

Which Packaging Type is Preferred for Instant Coffee Products?

“Sachet Packaging Solutions Attracting Larger Consumer Base”

Based on packaging, jars, sachets, pouches, and others are segments of the instant coffee market. Among these, the sachet segment is forecasted to hold a substantial share of revenue due to its easy and quick preparation method.

Which Channel Accounts for High Sales of Instant Coffee Globally?

“Supermarkets & Hypermarkets Lead Instant Coffee Distribution”

Supermarkets & hypermarkets, B2B, independent retailers, and other channels are used to distribute instant coffee to target end users. Among these, the supermarkets & hypermarkets segment is anticipated to hold a noteworthy position in the global market due to the growing urbanization and the easy availability of products under one roof.

Competitive Landscape

According to this analysis by Fact.MR, a provider of market research and competitive intelligence, prominent companies are investing in the expansion of their footprints across the globe. Key market players are focusing on strengthening their supply chain management systems for an effective supply of instant coffee around the world. Delivery of quality products while maintaining product standards and ensuring minimum environmental impact are some of the primary objectives of these players in the instant coffee market.

Key providers of instant coffee are involved in new developments to provide innovative and more effective services to target end users.

For instance,

• A majority of Blue Bottle Coffee is owned by Nestle. In October 2022, the company launched an instant espresso, which allows consumers to produce premium drinks at home without any requirement for brewing expertise or pricey coffee machines.
• In July 2021, Starbucks and Nestle announced the launch of RTD coffee beverages in Latin America, Oceania, and Southeast Asia.
• In March 2020, Cusa Tea announced the development of Cusa Coffee. This newly developed coffee production utilizes the evaporative dehydration process, which is the same as in Cusa Tea. Each box contains seven instant packets and can prepare an 8-ounce cup of brewed coffee within 3 seconds.

Key suppliers of instant coffee are Jacobs Douwe Egberts B.V., Starbucks Corporation, The J.M. Smucker Company, The Kraft Heinz Company, Tata Global Beverages Ltd., Trung Nguyen, and Matthew Algie Company Limited.

Segmentation of Instant Coffee Industry Research

• By Material :

  • Freeze-dried
  • Spray-dried

• By Packaging :

  • Jars
  • Sachets
  • Pouches
  • Others

• By Distribution Channel :

  • Supermarkets & Hypermarkets
  • B2B
  • Independent Retailers
  • Others

• By Region :

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