Despite persisting inflationary pressures, volume sales of hot drinks in the Philippines recorded healthy growth in both retail and foodservice channels in 2023, with improving economic conditions and the greater mobility of Filipino consumers contributing to an increase in demand. Coffee, the largest product area in terms of volume, saw a particularly buoyant performance, supported by the vibrancy of instant coffee mixes, as the busier lifestyles of consumers encouraged them to prioritise convenience.
Health and wellness concerns continued to shape the market for hot drinks in 2023, having accelerated during the COVID-19 pandemic. This translated into a growing demand for products promising to deliver a range of functional benefits, most notably, those claiming to boost immunity.
International players Mayora Indah Tbk PT and Nestlé Philippines Inc continued to dominate the competitive landscape for hot drinks in the Philippines in 2023, thanks largely to their unmatched efforts in terms of marketing and distribution. The companies’ brands, Milo and Nescafé in the case of Nestlé and Energen, and Kopiko in the case of Mayora Indah, benefit from widespread and consistent availability in both traditional and modern retail channels.
Small local grocers continued to dominate the retail landscape for hot drinks in 2023. While modern formats, such as supermarkets and hypermarkets, offered attractive prices, the sheer number of sari-sari stores across the Philippines made the channel more convenient for day-to-day shopping for most local consumers.
Foodservice volume sales of hot drinks grew faster than their retail counterparts in 2023, having benefited from the greater mobility of consumers, including a return to café s and restaurants. While retail continues to drive the bulk of demand, on-trade is a significant source of growth, particularly since consumers are often more willing to try new, premium products, such as single-origin tea and coffee selections, in foodservice establishments.
Volume sales of hot drinks will continue to expand over the forecast period, with demand expected to exceed its pre-pandemic level by 2024. Growth, particularly within foodservice, will be supported by improved economic conditions, which will have a positive impact on consumer spending.
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Hot Drinks
This report originates from Passport, our Hot Drinks research and analysis database.
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