In 2023, the hot drinks landscape in Portugal recorded positive growth in the on-trade channel, boosted by the return of tourism and out-of-home consumption post-COVID-19. Tourism was a main driver for the on-trade, while off-trade noted a volume decline, with demand decreasing following the heightened growth seen during the COVID-19 confinement period.
While inflation rates were high in 2023, private consumption grew. The economic landscape was driving changes in consumers’ purchasing habits, with the down trading trend gaining steam as disposable incomes declined.
Nestlé Portugal SA maintained its leadership of hot drinks in 2023 in Portugal, being the leading player in both coffee and other hot drinks. Within the coffee landscape, the strong presence of Nespresso and Nescafé Dolce Gusto is key to Nestlé Portugal SA’s success, while the player also leads instant coffee.
Rising inflation saw an increase in share for discounters in 2023, in addition to retailers who offer a strong range of private label goods. Many consumers were trading from brand to private label goods, leveraging the growth of players such as Mercadona, Lidl and Aldi.
While off-trade consumption continued to be higher than pre-pandemic levels, there was a noted shift from off-trade to on-trade consumption following the lifting of COVID-19 restrictions. The foodservice channel, highly affected by the pandemic, saw growth surpass 2019’s volume levels over 2023.
One of the main challenges for hot drinks in the short-term period will be an ongoing economic strain, with inflation and high-interest rates boosting consumer uncertainty. This will lead to a widespread decline in consumption and a focus on essential goods.
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Hot Drinks
This report originates from Passport, our Hot Drinks research and analysis database.
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