In 2015, the global hot drinks industry was valued at 425.35 billion USD. The industry grew at a compound annual growth rate (CAGR) of 6.91% to reach 555.63 billion USD in 2019. Until 2025, the global hot drinks industry is forecast to grow at a CAGR of 6.4% and reach 791.54 billion USD.
In 2019, Europe was the clear leader of the hot drinks industry in value terms; it accounted for more than 25% of the global industry value.
North America recorded the second largest share of the global hot drinks industry’s value with nearly 21%.
Northeast Asia took the third place in value terms with a 19% share. South and Central America followed with a share of 10% and 9%, respectively.
Africa, the CIS countries, and the Middle East accounted to for 7%, 3%, and 3% respectively.
The hot drinks industry can be divided into three main segments. The first is coffee, which can be further broken down into roast coffee and instant coffee. The other two segments are tea and cocoa.
The two largest segments in 2019 were coffee and tea. They accounted for a total share of 97% (65% and 32%, respectively) in value terms. Cocoa accounted for only 3% of global sales in 2019.
Hot Drinks Industry Trends
Coffee, tea, and cocoa experienced similar trends in the last few years. The hot drinks industry was mainly driven by premiumization, health and wellness, sustainability, and the third wave of coffee.
Premiumization has been particularly important in developed regions and significantly strong in Northeast Asia and Western Europe. At the same time, consumers from countries in Asia Pacific and Eastern Europe have become more income-led.
Due to consumers shifting towards higher value products, premiumization in developed economies has been the main driver for global value growth. There has been no significant change in volume terms due to the maturity of the markets, coupled with slow population growth.
Consumer preferences for hot drinks have shifted to more natural products with “clean labels”. Those also include fermented drinks, teas, low sugar beverages, and other fortified drinks with health benefit claims.
As a result, major players experience a significant challenge. To remain competitive, they must reduce their use of sugar and include new hot drinks in their portfolio.
Furthermore, custom ordering has become especially popular in the US in recent years. Coffee shops and cafés let customers create their own drink by choosing the type of drink, size, and any additions such as toppings and syrup flavors. After that, baristas can make them the drink they want. Overall, coffee shops and cafés have benefited from this trend and will continue to do so despite COVID-induced hardships.
Another successful business strategy on the hot drinks industry was the development of loyalty programs. It helps companies reach out to existing customers in a new and direct way. Many independent coffee shops have adopted loyalty programs, which provide them the ability to communicate directly with consumers.
In such a way, companies do not have to spend too much on advertising to reach their existing customers and attract new ones. Instead, they send them marketing messages through text, email, or app notifications.
Tea Market Overview
In 2015, the global tea market was valued at 113.46 billion USD. The market grew at a compound annual growth rate (CAGR) of 8.7% to reach 158.4 billion USD in 2019. Until 2025, the global tea market is forecast to grow at a CAGR of 6.8% and reach 237.75 billion USD.
In 2019, Northeast Asia was the clear leader of the global tea market in value terms. The region is comprised of China, Japan, South Korea, and Hong Kong; it accounted for more than 33% of the global market value.
Asia Pacific recorded the second largest share of the global tea market’s value with nearly 22%.
South and Central America took the third place in value terms with a 13% share. Europe and North America followed with a share of 10% and 9%, respectively.
Africa, the CIS countries, and the Middle East accounted to for 7%, 3%, and 3% respectively.
Tea Market Trends
The tea market has evolved dramatically in the past few years due to changing consumer behavior.
Tea drinkers today show more interest in higher-quality products with a great story and taste that also provide specific health benefits. As a result, demand for functional tea blends as well as single estate artisanal teas has grown significantly.
Furthermore, perception of tea have also changed. Tea is now seen by consumers as a sensual and wellness drink. In fact, hot drinks are not only consumed for the taste and pleasure they provide, but also to warm up and relax.
Moreover, people show high interest in innovative flavor combinations and authenticity. When it comes to different types, recent trends suggest that natural and earthy alternative flavors such as ginger, matcha, turmeric, and cumin are in higher demand.
Fruit and herbal tea has been the fastest growing hot drinks category in the US. Due to its functional properties, tea responds to the increasing demand for wellness drinks.
Green tea, on the other hand, has been especially popular in France, where its consumption has been one of the highest in Europe.
Furthermore, the tea market has expanded outside the hot beverages category with the development of ready-to-drink iced tea variants. Kombucha, for example, has shown impressive growth in recent years. It has evolved from a niche product to a well-established product in supermarkets around the globe.
Over the last few years, the market has also seen an emergence of tea specialists. They have been focused on educating consumers about the quality of loose leaf tea. Ultimately, this has raised expectations of retail tea. Thus, companies create unique flavor blends such as Mango Fruit Punch, Pink Flamingo, and others.
In response, producers of packaged tea have introduced multiple blends and premium tea variants. Some of the more exotic flavors that combine ginger, mint, and lemon were inspired by various ethnic regions around the globe. In the same way, cardamom, cloves, and saffron have been added to coffee.
Coffee Market Overview
In 2015, the global coffee market was valued at 311.89 billion USD. The market grew at a compound annual growth rate (CAGR) of 6.23% to reach 397.23 billion USD in 2019. Until 2025, the global coffee market is forecast to grow at a CAGR of 6.03% and reach 555.79 billion USD.
The coffee market can be divided into two distinct product types – roast and instant coffee. Roast coffee accounted for nearly 72% of the global coffee market’s value, while instant coffee held slightly more than 28% of the total.
In 2019, Europe was the clear leader of the global coffee market in value terms. The region accounted for more than 31% of the market value.
North America recorded the second largest share of the global coffee market’s value with 26%.
South and Central America took the third place in value terms with a 15% share. Northeast Asia and Asia Pacific followed with a share of 13% and 8%, respectively.
Africa, the Middle East, and the CIS countries accounted for 3%, 3%, and 1% respectively.
Coffee Market Trends
In accordance with the advancement of consumers’ environmental and ethical consciousness, certified coffee has gained popularity in recent years.
Particularly in Europe, both production and sales of sustainably-produced coffee have surged more than the segment of conventional coffee. Furthermore, desire for organic coffee grows because it is free from chemicals and pesticides, and is considered safer.
In the United States, despite coffee pods being the fastest-growing category, growth has slowed down in recent years. In 2019, roasted coffee generated the most revenue in the segment.
Today, coffee is mostly perceived as an artisanal product, rather than just an energy drink. Therefore, most coffee drinkers prefer locally owned coffee shops and specialized coffee products such as flavored coffee.
These consumers are also willing to pay more for a unique coffee experience that impacts all senses. As a result, coffee roasters and baristas incorporate new techniques by exploring the properties of coffee, such as cold coffee brewing with nitrogen.
In general, the main aspects that have been shaping the coffee consumption include taste, pleasure, and caffeination. However, developing regions, and especially Asia and the Middle East, have witnessed an increased consumption of instant coffee.
Although consumption worldwide is growing, instant coffee still holds a relatively small share within the coffee segment. One of the reasons includes premiumization, which has restrained growth of instant coffee in developed countries.
The growing demand for high-quality coffee and the proliferation of pod machines in most developed regions presents a significant challenge to the development of the instant coffee market.
To remain competitive, instant coffee producers have been adding more of the features of fresh coffee into their products. In the US and Germany, consumption of drip coffee is prevailing, while in Britain consumers prefer instant variants.
In Brazil, coffee has been the most important hot drink for local consumers, and has continued its growth over the last few years. There are several key reasons including the beverage’s cultural relevance for Brazilians, as well as the industry’s development in line with the fast-changing consumer needs and desires.
Cocoa Market Overview
In 2015, the global cocoa market was valued at 12.27 billion USD. The market grew at a compound annual growth rate (CAGR) of 6.97% to reach 16.07 billion USD in 2019. Until 2025, the global cocoa market is forecast to grow at a CAGR of 7.19% and reach 24.25 billion USD.
In 2019, North America was the clear leader of the global cocoa market in value terms; it accounted for more than 22% of the global market value.
Europe and Northeast Asia recorded the second and third largest share of the global cocoa market’s value with slightly more than 17% each.
South and Central America took the fourth place in value terms with a 14% share. Asia Pacific and Africa followed with a share of nearly 14% and 7%, respectively.
The CIS countries and the Middle East accounted for 4% each.
Cocoa Market Trends
The overall cocoa market has been shaped by several aspects in the last few years. Some of the most important are premiumization, health and wellness, and sustainability.
Demand for premium and high-quality fine flavor cocoa has grown since 2015. In fact, it is the fastest growing segment, propelled by the proliferation of specialty and premium chocolate products. In addition, consumption of high-quality cocoa is further encouraged by its high content of flavonoids, which are known to have beneficial effects on health.
Higher demand for specialty cocoa in Europe can be found in countries such as Belgium, France, and Germany, where the standard of living and the level of income are high.
As for production, most cocoa beans are traditionally produced in Africa. However, in recent years, competition from companies in Asia Pacific and Latin America has intensified.
Consumers increasingly pay attention to factors such as provenance and sustainability, as well as the quality and diversity of the cocoa they purchase. In order to respond to the growing expectations of customers, companies try to highlight not only the origin of their cocoa, but also the story behind the brand, and the place where the end-product was manufactured.
In accordance with the advancement of consumers’ environmental and ethical concerns, certified cocoa and chocolate products also gain popularity.
Another important development on the market is the introduction of a new type of chocolate, which, according to its creators, is the forth type after white, dark, and milk. The new type is called ruby chocolate and is made by ruby cocoa beans. It has been commercially available since 2017 and is extensively promoted as chocolate without any additional flavorings or colorings, which serves the growing demand for clean label products.
