Global Coffee Pods Market - Forecasts from 2020 to 2025
The global coffee pods market is expected to grow at a compound annual growth rate of 6.54% over the forecast period to reach a market size of US$24.220 million in 2025 from US$16.558 million in 2019. The demand for coffee pods has surged because of the gradual change in consumer preferences to have innovative and ready to use products, and rising urbanization. Coffee is one of the most imperative and traded agricultural products or commodities globally, according to the data given by The International Coffee Organization in 2017, 70% of the total production of coffee was exported worldwide, and it was worth USD 19 Billion. The sector gave employment to more than 125 million people worldwide and had a retail market value of USD 83 billion in 2017. Coffee is cultivated on 12.5 million farms worldwide, out of which the smallholder farms play an imperative role. 67-80% coffee cultivation of total coffee cultivated land are smallholder farms that are situated in developing countries, which includes the countries with low human development index.
The coffee pods-based products will have a significant role in the market growth owing to the easy availability and as they can be brewed or used for household, industrial and other purposes. The coffee pods refer to the making of coffee like those of teabags. It is available in filter paper, small pouches, and other types of packaging material. It is also known as a single-use coffee container because only one coffee can be prepared from a pod. It simplifies the brewing process by eliminating additives and additional flavors, which helps in the reduction in time to make coffee and it also simplifies the overall process. The pod pack covers the sachet in tight airfoil and then it is dipped with nitrogen, which helps in the preservation of aroma and flavor of the freshly ground beans until the pouch, or a sachet is opened. It is widely popular in the food services business like bars, cafes, hotels, and restaurants because of its productive and superior quality and it doesn't require any substantive capital to train staff and for other purposes.
Sustainable Coffee Pods will have an imperative role in the growth of the market.
Over the past few years, consumption and the use of coffee have surged at an exponential rate. There is a plethora of choices from multiple brands that provide up to the scratch coffee pods, which will have an imperative role in the overall market growth. But there are major environmental concerns that have hindered the market growth. Major manufacturers and producers have been adopting various sustainable practices to comply with environmental regulations and standards. There has been a rise in the adoption of Voluntary Sustainability Standards (VSS) by the producers and coffee pod makers. According to the data by the International Coffee Organization, 34.5% of the total coffee production was under VSS Compliant in 2016. The VSS was introduced to reduce emissions, conserve biodiversity, and enhance worker safety and health standards, while also providing various types of economic benefits to the producer. This ensured that the demand would rise and lead to greater investments in more sustainable production. At least 3 million metric tons of coffee produced was VSS Compliant with the value at USD 7.2 Billion, according to the Food and Agriculture Organization of the United Nations (FAO) in 2016. There have been various concerns expressed by the manufacturers and regulators regarding the coffee pods. Manufacturers are spending a considerable sum of capital on innovation in packaging, that provides sustainable solutions. The demand for compostable coffee pods has risen in recent years because of the use of organic materials, reduction in greenhouse gas emissions and it also avoids extra coffee waste.
Europe was the major consumer of coffee in the fiscal year 2020, according to the data given by the International Coffee Organization. The region consumed around 55,089 sixty kg bags and is growing at a decent rate. North American and South American Region consumed 31,434 and 26,905 sixty kg bags in the fiscal year 2020. Asian Pacific region also registered a decent growth in the period and consumed 37,067 sixty kg bags in the given fiscal year. The total consumption of the coffee was around 167,592 sixty kg bags worldwide. Global coffee production in the fiscal year 2020, was estimated at 169.34 million bags, a slight reduction of 2.2% from the previous year. The reason for the slump is due to the reduction in the output of Arabica, which was decreased by 5% to 95.99 million bags. Robusta meanwhile registered a growth of 1.2% to 73.36 million bags from the previous year. COVID-19 had a major negative impact on the market as global consumption decreased by 0.5% to 167.81 million bags from the previous year because the pandemic put considerable pressure on the global economy. People have avoided the usage of restaurants, cafes, and other home venues, which made a negative impact on the overall coffee market growth.
Brazil is the biggest exporter of coffee worldwide, followed by Vietnam, Colombia, Indonesia, and India. Brazil exported 40,434 sixty bags globally. Vietnam, Colombia, Indonesia, and India exported 26,537 bags, 12,639 bags, 6,796 bags, and 5,314 bags globally, with every nation registering a negative growth from the previous year because of the pandemic. European Union has been the biggest importer of coffee, soloed by the United States, Japan, Russia, and Switzerland. European Union imported around 70,330 sixty kg bags in the fiscal year 2020. The demand for coffee will surge again at a significant rate after the pandemic effects start to come down. As most governments are spending their resources in combating the pandemic, the coffee pod market will face a significant challenge.
Major Producers and key players are investing a substantial sum into the innovation, R&D in the diversification of the coffee as well as packaging. Some of the developments are:
1.In January 2020, Nestle launched a novel recycling program for its Nespresso and Dolce Gusto Coffee pods and capsules. The name of the plan was called Pod back, which would provide consumers with an integrated plan and a solution to recycle Dolce Gusto and Nespresso Products.
2.In August 2018, a global alliance was formed between Starbucks and Nestle S.A, in Consumer-Packaged Goods and Service. Starbucks gave the rights to Nestle to sell, make, and distribute its packaged tea and coffee. The alliance led to the surge in the Nestle Stock price at a record rate of 2.9%.
3.In November 2018, K-cup Coffee pods announced a collaboration with Dunkin Donuts and J.M. Smucker Company to produce, distribute, and sell their product through each other’s portfolio.
By Caffeine Content
By Distribution Channel
The Middle East and Africa
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