The impact of inflation in Australia is slowing in 2024, as indicated by insights from Euromonitor International’s Economics and Consumers system. Commodities such as sugar, coffee, and tea show a downward trend, helping to moderate unit prices in 2024 and contributing to more modest value growth.
The health and wellness trend remains a pivotal force shaping hot drinks in Australia. Functionality has emerged as a key component of innovation, as consumers prioritise wellness spending, even during challenging economic times.
Nestlé Australia retains its lead of hot drinks in Australia, supported by a comprehensive product portfolio that includes coffee and other hot drinks. The player is investing in the expansion of its Smithtown factory, which produces Milo, Nesquik, Nestlé Malted Milk, and Nescafé mixes, with the aim of modernising production lines and increasing overall capacity.
Supermarkets remains the primary channel for the distribution of hot drinks in Australia, operating within a duopoly dominated by Coles and Woolworths. However, leading supermarkets have faced scrutiny from the Australian Competition and Consumer Commission due to allegations of price gouging, with claims that customers are being misled by deceptive pricing practices on over 500 popular products.
In 2024, volume sales of hot drinks through foodservice continue to record slow growth, with overall demand through the channel remaining significantly lower than pre-pandemic levels, largely influenced by the ongoing cost-of-living crisis. Younger Australians, in particular, are reducing their spending on dining out and shifting towards home consumption of hot drinks.
Hot drinks in Australia is poised for a return to stronger volume growth over the forecast period as economic conditions improve, likely prompting consumers to revert to their historical purchasing patterns. Coffee will remain resilient, benefiting from Australians' enduring preference for this hot drink.
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Understand the latest market trends and future growth opportunities for the Hot Drinks industry in Australia with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
Key trends are clearly and succinctly summarised alongside the most current research data available. Understand and assess competitive threats and plan corporate strategy with our qualitative analysis, insight and confident growth projections.
Data and analysis in this report provides further detailed coverage dedicated to the following key categories, where applicable:
If you're in the Hot Drinks industry in Australia, our research will help you to make informed, intelligent decisions; to recognise and profit from opportunity, or to offer resilience amidst market uncertainty.
Hot Drinks
This report originates from Passport, our Hot Drinks research and analysis database.
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