GlobalData’s report, ‘Australia Hot Drinks – Market Assessment and Forecasts to 2026’, reveals that the hot drinks sector’s growth will be primarily driven by hot coffee, the largest category, while the other hot drinks category is set to register the fastest value CAGR of 5.7% over 2021-2026. Consequently, the Australian hot drinks market is set to grow at a compound annual growth rate (CAGR) of 5.4%, from AUD3.6 billion ($2.7 billion) in 2021 to AUD4.6 billion ($3.4 billion) in 2026, forecasts GlobalData, a leading data and analytics company. According to the report, hypermarkets & supermarkets was the leading distribution channel in the Australian hot drinks market in 2021, followed by convenience stores and food & drinks specialists.
Consequently, the per capita expenditure (PCE) on hot drinks in Australia increased from $33.4 in 2016 to $50.7 in 2021, surpassing the regional level at $11.1 and the global level of $17.
Khan continues: “Experimentative consumers are seeking new ways to enjoy hot drinks at home and out of the home.
With food and fuel prices spiralling due to the ongoing Russia-Ukraine conflict and inclement weather conditions, Australians are paying more for hot drinks such as coffee and tea. Naveed Khan, the Consumer Analyst at GlobalData, says: “Hot drinks manufacturers, retailers, and foodservice operators are under pressure to raise prices to cover the rising input costs. Hot drinks companies are also embracing sustainable packaging designs with low environmental impact to gain goodwill among eco-conscious consumers.”
Khan concludes: “With the easing of COVID-19 curbs, the on-premise and on-the-go consumption of hot drinks is on the rise. Over the forecast period, the hot coffee and hot tea categories will record a CAGR of 5.5% and 4.8%. Nestlé, JAB, and Cantarella Bros were the top three companies in the Australian hot drinks market in value terms in 2021, and Nescafe and Moccona were the leading brands.
This spurs the demand for specialty coffee, functional teas, and hot chocolate drinks.
“Tea manufacturers are focusing on functional blends with immunity strength, and mental relaxation claims to help consumers cope with the stress of the economic and health crisis. Australia’s PCE on hot drinks will surge to $61.7 in 2026. Concurrently, the increasing public outdoor mobility and reopening of offices and institutions fuel the demand for instant coffee, coffee capsules, and tea bags.”
Manufacturers are launching new products with innovative brewing methods and distinctive flavours to attract young consumers, who are willing to spend more for novel consumption experiences. However, the COVID-19 pandemic has spurred the demand for health and wellness tea blends and herbal/fruit infusions. However, the relaxation of the pandemic restrictions unleashed the pent-up demand and propped up consumer spending.”
Written by: Matthew Thomas
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