The global ready-to-drink coffee market is set to witness growth at a compound annual growth rate (CAGR) of 8.3 per cent and is anticipated to reach a valuation of around US$42.3 billion by 10 years from now, according to new research.
The report from Future Market Insights notes that while some of this growth can be attributed to the general shift towards a focus on convenience for many consumers, premiumization is one of the most important drivers in the market.
Despite the uncertainty of the ongoing pandemic, consumer sentiment is rising, and consumers are experimenting with new flavour profiles and product categories, finds the report. Affordable luxury products continue to rise in prominence and popularity.
“The desire for knowledge and transparency about how and what we consume has also encouraged premiumization, which is driven by the value-driven millennial consumer who wishes to demonstrate their opinions through inconspicuous consumption,” said the report.
Conversely, the second driver, absolute luxury, is a sign of exclusivity. It has evolved from overt displays of money to consumers displaying culture capital, exclusivity, and knowledge. This manifests itself in a stronger desire to attempt to buy goods with an interesting story, craft credentials, clout, and provenance in the beverage industry.
People are not overspending or recklessly spending, but their individual budgets now also include spendable money. It’s a low-cost luxury, and premiumization is on the rise.
Primarily, the market study found that conventional ready-to-drink coffee is anticipated to account for around 87 per cent of the market share over the forecast period.
The North American ready-to-drink coffee market is expected to continue to dominate the global market. It currently boasts a market share of around 29 per cent in 2022.
Ready-to-drink coffee is a functional drink that has been shown to have nutritional benefits. As the diabetic population and calorie-conscious consumers look for alternatives to sugar in their drinks, the rate of priority for antioxidant-enriched beverages among them is increasing.
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A competitive market
On the basis of type, original ready-to-drink coffee is expected to hold a prominent share in 2022, but flavoured ready-to-drink coffee is expected to witness a lucrative growth rate over the forecast period.
As such, companies are focusing on launching innovative drink blends with different flavours such as chocolate, vanilla, various milk flavours, customized sugar and ice level drinks, and more variety in order to attract the Gen-Z and millennial segment. Millennials are known for their eagerness to try new innovative flavours, which creates an opportunity for producers to introduce new flavoured ready-to-drink coffee to the market.