Competitor Strategies in Hot Drinks

Delivery

This report comes in PPT.

Key Findings

Coffee landscape set to be led by leading major players such as Nestlé and JDE

In 2024, the market shares of key players in hot drinks remained largely unchanged, a notable shift for a sector that has experienced significant mergers and acquisitions over the past decade. That said, with the growing competition in the industry, tariff hikes as well as evolving coffee consumption where consumers are drinking more at home, acquisitions are set to continue.

Developing markets continue to be key focus for leading hot drinks companies

Hot drinks companies, traditionally strong in developed countries, are facing market saturation due to mature consumption levels. Consequently, they are focusing more on developing markets with lower per capita consumption and large population. Additionally, they are appealing to young consumers, particularly with cold coffee, which remains popular.

Premiumisation and innovation critical for hot drinks players amidst the challenging environment

Amidst the challenging environment of price hikes, hot drinks players are actively launching new products and focusing on a premiumisation strategy to drive growth. This is in the form of positioning wellness through new products and a focus on coffee concentrates to appeal to convenience and consumers’ busy lifestyles.

Expansion of Asian specialist coffee shops set to pose stiff competition to incumbent hot drinks players

The increasing expansion of Asian specialist coffee shops such as Luckin Coffee is set to provide consumers a wider variety and availability of coffee. This is especially evident in 2025, where they plan to enter new markets like the US, posing stiff competition to incumbent foodservice players like Starbucks. Nevertheless, it remains to be seen how trade wars and tariffs would impact their expansion plans.