Tax increases placed upward pressure on prices since 2023, but an uptick in economic activity and the ongoing expansion of the affluent urban middle-class continued to underpin sales growth, while investment in infrastructure has underpinned improvements in the distribution of hot drinks. The government has also been encouraging businesses to invest in the local market.
Most Tanzanians tend to prefer drinking tea over coffee due to its relative affordability. However, Tanzania faces a challenge when it comes to consumption of hot drinks in general.
Sugar prices increased astronomically towards the end of 2023 and into the first quarter of 2024 as the commodity faced scarcity, impacting negatively on consumption of hot drinks among lower to mid-income demographics in urban and rural areas. Low income earners have been especially hard pressed between enjoying their daily hot drinks with sugar or affordability constraints as the commodity became a luxury.
Hot drinks are generally consumed in the morning for breakfast, especially tea and other hot drinks. As such, they compete with light maize porridge, known as Uji, which is also typically consumed for breakfast, is cheap and is widely available.
Inflation and the rising cost of living reduced consumers’ purchasing power. Unlike in the past, large supermarkets and other outlets no longer get an influx of customers over weekends.
Sales of hot drinks are expected to continue growing at a strong and steady pace backed by rapid population growth and an improving economy as well as ongoing retail development. Mid-high income consumer groups are expected to contribute to growth of hot drinks consumption as they have the financial capability to purchase and indulge in the consumption of tea and coffee blends which are perceived as the preserve of the wealthy in the country.
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Understand the latest market trends and future growth opportunities for the Hot Drinks industry in Tanzania 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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