New Global Briefing: Trends in RTD Coffee

Ready-to-drink (RTD) Coffee is a USD 20.5 billion market at retail and one of the best-performing segments of soft drinks globally. Japan has historically been the core of the category and still accounts for over half of all global sales, but the growth is increasingly shifting elsewhere and the future of the category lies in new markets all around the world. A new report from Euromonitor International looks at the current and future state of global RTD Coffee as it enters new markets and offers new methods of indulgence and functionality to consumers across the globe. It considers the rise of craft-style beverages, cold brews, energy drink hybrids and more as it examines how the category has developed across the world.

Forecasted RTD Coffee retail volume growth 2016-2021

This global analysis offers a comprehensive view on the following topics:

  1. The state of the RTD Coffee market today: Excluding Japan and its highly mature market, RTD coffee is the fastest-growing category of soft drinks globally, with volume growth expanding even faster than that of bottled water. Despite this growth, it remains highly underdeveloped outside of a handful of countries and consumption rates are quite low. China and the United States are the keys to global growth, but strong expansion is also expected in South Korea, Southeast Asia, Western Europe, and Australasia. Even in places as far afield from its traditional markets as Colombia and the UAE are recording double-digit annual growth rates.
  2. A changing market in Japan: While a mature market and shrinking Japanese population mean that Japan is not able to grow the way it once was, the category still retains a great deal of vitality in its home country. Changes in working culture, influences from coffee shops, and the increasing availability of quality fresh brewed coffee means that the category’s old model of inexpensive functionality is giving rise to experimentation with higher-quality and better-tasting beverages than before.
  3. Market fragmentation in North America: The USD 2.9 billion market in the United States owes its existence largely to the Frappuccino. While Starbucks’s sugary creation remains the leading brand in North America, the market is fragmenting. Cold brews have created a new way to indulge while Coca-Cola’s major push into the category at a time of declining carbonates volumes threatens to upend what has traditionally been a Starbucks and PepsiCo monopoly.
  4. Growth markets outside the historical core: While the US and Japan are by far the largest markets, the category is growing all around in the world. Demand from China has risen by double-digits every year for over a decade, moving the country into a strong third place with massive potential still remaining. The category is also exploding in Southeast Asia as the category expands its consumption base in countries like Malaysia and the Philippines. Even in more established markets like Australia and Switzerland strong possibilities for category expansion remain.
  5. Future prospects: A large number of unanswered questions still linger over the category. What type of packaging are consumers looking for? Can bottled coffees take share from energy drinks? How might category lines blur in the future with other beverage categories? What types of functionalities could RTD coffee offer? These and other questions will be considered in the final section of the report.