In 2023 Argentina is suffering from political dysfunction and soaring inflation, with consumers seeing historically low average income and diminished purchasing power. A severe drought and the upcoming presidential election are further complicating economic forecasts.
The enforcement of the front food labelling law in 2022, which displays sugar, fat, and sodium levels, has influenced hot drinks, particularly benefiting yerba mate and tea products known for their nutritional properties. Coffee’s growth, meanwhile, is driven by fresh ground coffee pods and by instant coffee's affordability and product variety.
The hot drinks market in Argentina is characterised by low concentration due to the prominence of yerba mate, which is highly fragmented. Nestle Argentina leads in retail value terms, offering premium coffee options and leading flavoured powder drinks.
Rampant inflation in the first half of 2023 led to the reintroduction of the “Precios Justos” programme, creating price pressure in supermarkets and hypermarkets. This has led consumers to shift to modern grocery channels for lower-priced items.
The lifting of COVID-19 restrictions has led to a strong recovery in the foodservice sector, with on-trade hot drinks sales rising significantly. The positive trend continues thanks to the resurgence of domestic and inbound tourism.
Despite economic challenges, hot drinks market is expected to continue rising throughout the forecast period, building on the significant rebound in off-trade consumption. Economic instability and reduced purchasing power will likely lead to increased demand for affordable hot drinks options like yerba mate, instant coffee, and tea.
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Hot Drinks
This report originates from Passport, our Hot Drinks research and analysis database.
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