Hot drinks saw strong growth in Sri Lanka in 2024 backed by an improving economy and a large influx of tourists. The search for convenience boosted sales of tea bags and instant coffee, while an increasing number of consumers looked for healthier hot drinks such as products with functional claims.
In 2024, the growth and development of hot drinks in Sri Lanka was informed by a variety of factors, including changing consumer preferences, rising costs, and prevailing economic uncertainty. Although inflation stabilised in 2024 prices of hot drinks still continued to rise, which pushed many consumers to favour cheaper options like instant coffee and tea sachets.
Sri Lanka faced economic challenges during the review period, including high inflation rates, which have affected consumer purchasing behaviour. This has created a noticeable shift in the market towards more affordable and easily accessible hot drinks options, with instant coffee and tea sachets becoming increasingly popular.
The growing cost of living and depreciating value of the Sri Lankan rupee had a major effect on sales of hot drinks during the review period. Consumer price sensitivity led to a change in preference towards cheaper options, which benefited sales of instant coffee and tea sachets which are not only more affordable but also more convenient.
Sri Lanka is not a particularly large country and all of the main population centres are well connected by road and rail. Thus, there are no significant factors placing limits on logistics or the distribution of hot drinks.
Inflation stabilised to more normalised levels in 2024, supported by the financial aid package received from the IMF and other factors such as the uptick in inbound tourism. This in turn should help to boost consumer confidence and encourage spending on a wider range of hot drinks, included healthier options such as fruit/herbal tea and specialty coffee products, among others.
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Hot Drinks
This report originates from Passport, our Hot Drinks research and analysis database.
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