Global Ready-to-Drink (RTD) Coffee Market - Growth, Trends, and Forecast (2018 - 2023)
RTD coffee is a recent concept and importance of these products can be understood in their market valuations, which often run into billions of dollars. The market is expected to register a CAGR of 4.5% during the forecast period (2018-2023). The global RTD coffee market is expected to be valued at USD 9.68 billion in 2018.
The instant nature and convenience offered by RTD coffee are important drivers. The nature of the product makes it a highly trend-driven market, and as such a certain element of innovation is constantly in demand. Regarding the major access points, iced products with longer shelf life provide major opportunities, along with liquid coffee concentrates and frozen concentrates. The latter holds importance for bulk buyers, such as restaurants and offices. The major constraint for the global RTD coffee market is in adapting to regional tastes and preferences. Specific regions, where consumers are habituated to hot or freshly ground coffee, take a considerable time and reluctance in adapting to the new tastes. Extensive marketing and use of locally sourced products are essential in countering this perception.
The RTD Coffee market is segmented based on ingredient type, packaging mode, sales channels, and geography. Convenience stores, supermarkets, and mass sellers are the major sales and distribution networks. Considering the volume dependent nature of the market, availability of the products is a major market determinant. This factor is further amplified in the case of emerging countries, which lack a fully developed distribution network. The supermarket shelves and vending machines gain prominence in this regard. Both these access points make soft drink manufacturers, the ideal distribution partners, and dominant market players. This phenomenon can be clearly observed in the long-standing partnership between PepsiCo and Starbucks. Despite the portfolio strength of Starbucks, the distribution network offered by Pepsi is crucial for an adequate market penetration. This distribution related facet of the industry offers a significant challenge to new and small players.
On the basis of geography, North America and Europe occupy pioneering and dominant market positions. The emerging markets of Asia-Pacific and South America present a very high volume potential. The APAC region is expected to witness slow to moderate growth rate over the forecast period.