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June 23, 2015

Coffee Fest: A Review of the North American Market and Key Hot Drinks Trends

The Coffee Fest trade show took place on Navy Pier in Chicago from June 5 to June 7, hosting a wide range of players in the coffee and hot drinks industry, including coffee shop owners, baristas, roasters, distributors, manufacturers and more. Here, Euromonitor International’s drinks research analysts Mark Strobel and Eric Penicka presented on ‘The State of the North American Coffee Market’. Below are some key points from the presentation as well as other notable trends from Coffee Fest.

Euromonitor’s Presentation on the State of the North American Coffee Market

CoffeeFestGlobally, retail coffee is a US$85 billion dollar industry and North America is among the largest and fastest growing of all regions worldwide. In the US, coffee pods have dominated conversations as its value share of the market has grown from nearly negligible a decade ago, to a US$4 billion industry in 2014. However, their growth spurred on by the Great Recession is expected to taper off in the next five years. Pod’s stalling growth will in part be a result of increased consumer appreciation of coffee in the US, where third-wave, independent coffee shops have gained ground. Furthermore, specialty coffee shop growth can largely be attributed to the millennial age group which has changed consumer trends across industries and will only grow in importance in the years to come as their purchasing power advances.

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May 29, 2015

Top 5 Beverage Trends at NRA Show 2015

The National Restaurant Association (NRA) Show took place in Chicago from May 16 to 20. The show and its BAR event hosted attendees from around the world who saw the latest in packaged foods, hot and soft drinks, alcoholic drinks, cooking equipment, and software for the restaurant industry. Below are the top 5 beverage trends that the Euromonitor research team of Eric Penicka, Mark Strobel, and Virginia Lee observed.

Dry-Cider1. Dry Cider: As cider continues to have staggering growth in the US, cider companies are attempting to appeal to a wider group of consumers. In a bid to disprove common perception that ciders are for women, cider companies have focused on dry and bitter product development. Ciders featuring craft beer’s beloved hops were featured in Angry Orchard’s Hop’n Mad Apple and the Colorado Cider Company’s Grassho-ah. Beyond hops, semi-dry and dry ciders are being formulated to increase session-ability. Woodchuck’s Gumption blends American sweet eating apples and British dry cider apples to create a semi-sweet cider to assist consumers in transitioning to dry ciders. At the Demo Lounge, Wirtz Beverage Group used Seattle Cider Co’s gin botanical cider to create a Seattle “75” cocktail.

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May 22, 2015

World Green Tea Growth Prospects

Emi_greenTea-v1.0

The global green tea market is highly fragmented; the leaders Ito En and Unilever are close rivals, with just 4% value shares each in 2014. The potential for growth is huge, thanks to green tea’s health benefits. Unilever should look to address its weaknesses in Asia Pacific, particularly in China and Indonesia, in order to seize growth opportunities, thus defending its future global status.

May 17, 2015

Adapting Hot Drinks Brands to Fit Multi-Channel African Retailing

Howard TelfordAnalyst Insight by Howard Telford - Senior Beverages Analyst

View Howard Telford's profile on LinkedIn

The dual development of modern retail channels and sustained prominence of traditional points of sale are important variables influencing packaged hot drinks in Africa. As the chart below demonstrates, there is a great disparity among African markets in the development of modern outlets in hot drinks retailing, which include supermarkets and convenience stores. Small, independent and informal retailers that serve low-income consumers still constitute the majority of drinks retailing volume in the continent, particularly in sub-Saharan Africa. This traditional channel of sale demands flexibility in terms of price, package size, promotion and delivery in order to reach the vast majority of low-income African consumers. However the uneven but significant growth of modern channels in urban hubs must also play into the complex multichannel strategy of hot drinks brands in Africa.  Big and small, multipack and single-serve, affordable and premium: is it possible for new, foreign entrants to build mass appeal in such a disparate retailing environment?

Hot-Drinks-Retail-in-Africa

Source: Euromonitor International

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May 12, 2015

Brazil's Business Environment: Consumption in Economic Slowdown

250_brazilBusiness-v1.0On the surface, Brazil looks like an attractive market. It is the seventh largest global economy and has a population of 200 million, with high consumer expenditure and high demand for commodities.
But Brazilians are spending less, industrial confidence is deteriorating, and inflation is rising, meaning a future of slow growth and economic recovery.

Consumer goods companies operating in Brazil need to adapt their strategy to integrate the global market place. What are the reasons behind this slowdown and how can organisations work it to their advantage? 

Download our white paper today to learn:

› How Brazil’s rapid currency depreciation has affected its economy and consumers 

› Which consumer industries are slowing down and which have new opportunities

› Why the middle class is changing Brazil’s economic landscape

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May 9, 2015

Global State of the Industry: A Review of the Top Tea Trends and Markets Around the World

This week, Euromonitor International’s Senior Beverages Analyst Howard Telford presented to World Tea Expo in Long Beach, California on a ‘Global State of the Industry: A Review of the Top Tea Trends and Markets Around the World’. The presentation focused on the largest and fastest growing tea markets on a global basis and offered insights into the top trends that are driving sales from Istanbul to Brazil using Euromonitor’s latest Passport beverages data. The presentation discussed the latest drivers for consumer demand across the globe and what it means for producers and distributors in the upcoming year.

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May 7, 2015

Discounter Gains and Single-Serve Drive Private Label Coffee

Howard TelfordAnalyst Insight by Howard Telford - Senior Beverages Analyst

View Howard Telford's profile on LinkedIn

According to Euromonitor International’s latest estimates, private label accounts for about 10% of total global coffee volume. Private label share of the coffee market understandably rose over 2005-2012, during the worst of the economic downturn, but slipped slightly over the last two years of relative recovery. Private label coffee is still primarily a developed market option, sustained in large part by value priced modern retailers. Store-brand coffee has a negligible presence in Asia and Latin America, but a significant impact in Western Europe, where private label coffee accounted for 26% of total market volume in 2014, up from 22% in 2005.

This regional variance highlights several important factors behind the success of private label coffee: a growing, modern, discount oriented retail environment and a consumer preference for fresh, rather than instant coffee. Increasingly, a preference for pod based, single-serve coffee at affordable price points could generate even more momentum in private label. The rise of premium supermarket chains, like Whole Foods in the US, is potentially another factor influencing the future of private label ‘brands’ that are winning consumer acceptance.

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April 20, 2015

Opportunities and Challenges in Specialty Food Ingredients

Ingredients-banner

Thursday, April 23 | 9 a.m. CDT / 3 p.m. BST

The supply of speciality ingredients to the international food and drinks market presents varied opportunities and challenges.

Adding value is a priority for the global food and beverage industry, with consumers no longer looking for simple nutrition or hydration but demanding far more in terms of taste and quality, health and wellness, naturalness, and convenience. There are also many issues at supply level that are having a significant impact on business strategies, including economic challenges, sustainability, and regulatory issues.  Our presentation will discuss the activities of ingredients companies and their response to the opportunities and challenges in today’s global market.

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April 7, 2015

Diversity Calls for Flexibility in Strategy for Each ASEAN Coffee Market

Hope.LeeAnalyst Insight by Hope Lee - Senior Beverages Analyst

ASEAN’s coffee market is perhaps as complex as its diversity in culture. Multinationals that feel they are missing out on part of China’s growth story, may start setting their sights on The Association of Southeast Asian Nations (ASEAN), which includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. China’s economic slowdown and market maturity in first-tier cities may also encourage some multinationals to look elsewhere in Asia for further exploration of the full Asian story. However, it should be noted that this is one of the world’s most diverse and competitive regions in terms of market development and consumption habits. The motto of ASEAN is “One Vision, One Identity, One Community”, but, as the long-awaited ASEAN Economic Community comes into effect in 2015, member countries remain divided along the lines of income and consumer expenditure. In 2013, average household spend in Singapore was US$72,198, compared to US$3,100 in Myanmar, while Indonesia stood out as the largest market in absolute terms. With this in mind, investors should not rely on a “one-size-fits-all” strategy. This article uses Singapore and Indonesia as examples to highlight the disparity of growth patterns and the possible factors to consider for local expansion or market entry.

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March 19, 2015

Chai: The Indulgent Value Driver in US Tea

Howard TelfordAnalyst Insight by Howard Telford - Senior Beverages Analyst

View Howard Telford's profile on LinkedIn

Slowly, but surely, the tea category in the US continues to grow in value terms, even as consumption plateaued in the last year. Retail volume sales of tea in the US were flat in 2014, while value sales increased by 3%. The strong performance of higher priced black specialty tea and the shift towards premium fruit/herbal and green tea brands sustained positive growth despite a failure to increase overall retail tea volumes with US consumers. The mainstream, mass-market appeal of high-end tea remains unclear.

Starbucks – through both its Tazo brand of tea concentrates and through its upscale Teavana café chains and brand – has placed a great deal of focus on ‘chai’ flavour in recent product development. Chai tea – at least as defined by North American consumers – still represents a versatile avenue of value growth in the retail tea segment, particularly for those consumers seeking an indulgent, convenient and full-flavour hot beverage. Brands seeking opportunities in chai tea must focus on flavour and the single-serve product format in chai beverages in order to realize its mass appeal.   

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Recent Posts

Coffee Fest: A Review of the North American Market and Key Hot Drinks Trends

Top 5 Beverage Trends at NRA Show 2015

World Green Tea Growth Prospects

Adapting Hot Drinks Brands to Fit Multi-Channel African Retailing

Brazil's Business Environment: Consumption in Economic Slowdown

Global State of the Industry: A Review of the Top Tea Trends and Markets Around the World

Discounter Gains and Single-Serve Drive Private Label Coffee

Opportunities and Challenges in Specialty Food Ingredients

Diversity Calls for Flexibility in Strategy for Each ASEAN Coffee Market

Chai: The Indulgent Value Driver in US Tea