Global price hikes for raw materials like sugar and cocoa drove up unit selling prices in hot drinks in Malaysia in 2023, especially within coffee and other hot drinks. The hoarding and shortage of cocoa in west Africa force leading players like Nestlé and Cadbury Confectionery to grapple with soaring costs and supply chain disruptions when importing cocoa into Malaysia.
Health and convenience remained key in inspiring new product developments and informing innovation within hot drinks in 2023. Launches such as C:ffeehead in April 2023 offer instant standard coffee presented in soluble plastic pods that require only the addition of hot or cold water, without the need for a coffee machine.
Nestlé maintained its lead of overall hot drinks in terms of value share in 2023, strengthened by its price hikes for all coffee products including Nescafé, Nespresso and Starbucks, which began in September 2023. Overall, the company’s coffee products saw an average unit price rise of 5%, thanks to extreme weather, a weak Malaysian ringgit against the US dollar, and soaring costs in raw materials such as sugar and cocoa.
Supermarkets and small local grocers saw positive off-trade volume growth in hot drinks in 2023, while convenience stores, hypermarkets and retail e-commerce channels struggled. This was largely because supermarkets and small local grocers in Malaysia tend to be located near close to residential areas and boast available parking space.
On-trade volume sales for hot drinks overall continued to see double-digit growth in 2023, with consumers increasingly going out to eat as lifestyles became more mobile. However, all hot drinks categories remained below pre-pandemic levels in terms of volume sales at the end of the year.
The Malaysian government is expected to finally implement the sugar tax with new excise duty rising from MYR0.4 to MYR0.
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Understand the latest market trends and future growth opportunities for the Hot Drinks industry in Malaysia with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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Hot Drinks
This report originates from Passport, our Hot Drinks research and analysis database.
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