Increasing urbanization, lifestyle changes, innovation and an increasing number of retail coffee shops in both mature and emerging markets is currently catalysing the growth of the instant coffee market.
Despite the dominance of fresh coffee in the coffee industry, instant coffee is quickly becoming popular all over the world. It is mainly due to the convenience that instant coffee provides over fresh coffee as it can be easily and quickly prepared by anyone.
Growing urbanization, lifestyle changes and an increasing number of retail coffee shops in both mature and emerging markets are further helping the social trend of coffee consumption to penetrate the lives of the youngsters.
New coffee drinkers, especially in the emerging markets find the benefits of instant coffee best suited to their needs and evolving tastes. Innovation is another key factor that helps to maintain a constant demand of instant coffee in the market.
Manufacturers instil innovative ideas to develop and improve the quality, aroma and flavour of the instant coffee so that it tastes just like a freshly brewed coffee. Innovation of single-serves and convenient packs are currently driving the value growth all over the world.
According to IMARC group’s latest report “Instant Coffee Market – Industry Trends, Manufacturing Process, Plant Setup, Machinery, Raw Materials, Cost and Revenue” the instant coffee market reached volumes worth 19.3 Million Bags in 2015, growing at a CAGR of around 3.2% during 2008–2015.
In terms of value, the market was worth US$ 8.6 Billion in 2015. Instant coffee is usually prepared by either spray drying or freeze drying after which it can be rehydrated. Spray-drying is the most popular form of drying instant coffee.
But as freeze drying is associated with higher quality, its demand is currently growing nearly twice as fast as spray dried coffee.
The report has also segmented the market on the basis of region. The growth of instant coffee consumption differs widely from region to region with the market showing stronger growth in countries which have a smaller coffee drinking history.
Europe including the CIS currently represents the largest market for instant coffee globally. Europe is followed by Asia which represents the second largest market for instant coffee. In Asia, Middle East represents the fastest growing market.
The instant coffee market is highly concentrated with five players dominating the market. Nestle represents the largest player holding a monopolistic position in the market.
Nestle is followed by Mondelez international, De Masters Blenders 1753, Strauss group, Tchibo and others.