Sales of hot drinks registered marginal growth in 2023. Coffee, the largest category, and other hot drinks recorded growth, while retail volume sales of tea declined.
Sales of hot drinks rebounded in 2023 as players adjusted their marketing initiatives in response to consumer behaviour shifts by launching smaller packs with fewer units and implemented marketing promotions such as price discounts and lucky draws as retail prices continued to rise due to rising costs of raw materials and operational costs due to inflation.
Tea is an integral element of Myanmar’s culture and is viewed as the national drink, while pickled tea leaves are also enjoyed in laphet salads, with these popular for special occasions. Black tea is widely popular, particularly in foodservice, while green tea is stocked in all homes and is offered to guests with snacks.
Increasing commodity prices and unprecedented inflation reaching a new high in 2022, forced Myanmar consumers to become more careful about their spending on groceries including on hot drinks to maintain their household budgets. Average annual inflation eased to 14% in the year ending September 2023, from 18.
Prolonged border trade checkpoint closures mainly due to regionalised conflicts between the Myanmar Army and revolutionary forces and ethnic armed forces have delayed cross-border transport and resulted in supply chain disruptions and shipping delays which creates stock shortages and temporary increases in the retail prices of products. Meanwhile, ongoing conflicts in the northwest and southwest regions of Myanmar have negatively impacted transportation and the ability of retailers in such areas to keep their shelves stocked.
Hot drinks sales are expected to recover thanks to habitual consumption across both off-trade and on-trade such as roadside stalls. On the other hand, macroenvironment challenges are also expected to remain which will inhibit household demand and sales growth of the category compared to pre-coup growth rates.
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Hot Drinks
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