Oct 22, 2019 (WiredRelease via COMTEX) -- Global Instant Coffee Market – Insights
Instant coffee also called soluble coffee is a beverage derived from coffee beans that enable people to quickly prepare hot coffee by adding hot water or milk to the powder. Instant coffee is produced using the spray-drying and freeze-drying methods. Both methods preserve the quality, aroma, and flavor of the coffee. Instant coffee requires lower shipping weight and volume than coffee beans, and has longer shelf life.
Growing food and beverages industry has led to increase in number of restaurants and cafes, which is expected to drive growth of the global instant coffee market during the forecast period. According to India Brand Equity Foundation (IBEF), the gross value added (GVA) by hotels and restaurants witnessed an annual increase in both absolute and relative terms from US$ 226.0 million in 2014 to US$ 241.0 million in 2017.
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Coffee offer various health benefits with mainly being enhance brain function. It also increase metabolism, helps to burn fat, and reduces disease risk. According to US National Library of Medicine National Institutes of Health, instant coffee can also reduce the risk of neurodegenerative diseases such as Alzheimer’s and Parkinson’s, type 2 diabetes, and improve liver health by lowering risk of diseases such as cirrhosis and liver cancer.
Since instant coffee is easy to prepare and is convenient, it is gaining more traction in the market. The fast-paced lifestyles of consumers is boosting the demand for convenient food products such as instant coffee, which in turn, is propelling the market growth. According to IBEF, in 2015, there were 100 chain cafés and bakery brands, with an estimated 3,100 – 3,200 outlets serving coffee in various cities in India. Coffee chains in India are witnessing substantial growth and are expected to grow rapidly till 2020. This is expected to drive growth of the global instant coffee market during the forecast period.
Market Dynamics- Restraints
However, high content of acrylamide in instant coffee as compared to the other forms of coffee is expected to restrain growth of the global instant coffee market during the forecast period. Acrylamide is a neurotoxic and can damage peripheral and central nervous system (PNS and CNS) in both humans and animals.
Moreover, overexposure to acrylamide can cause damage to nervous system and it may increase the risk of cancer. According to a study conducted by National Center for Biotechnology Information in 2014, instant coffee was found to contain 100% more acrylamide (358 mg/kg) than fresh roasted coffee. This scenario is likely to restrain the growth of instant coffee industry in the near future.
The global instant coffee market was valued at US$ 30.57 billion in 2018, and is expected to register a CAGR of 4.7% in terms of revenue over the forecast period (2019 – 2027), to reach US$ 46.05 billion by 2027.
Among regions, Latin America accounted for the largest market share in the global instant coffee market in 2018. According to the United States Department of Agriculture, Brazil’s coffee yield for marketing year (MY) 2019 is expected to reach 29.22 bags/hectare (60 kilograms per bag), which is an increase of 16% from 25.20 bags/hectare in 2018. This is owing to favorable weather conditions for coffee in the region and on-year of the biennial (biennial:A plant that requires two growing seasons to complete its lifecycle) production cycle for Arabica trees.
Furthermore, Asia Pacific is expected to witness the fastest growth in the global instant coffee market over the forecast period. This growth is attributed to increasing demand for instant coffee and significant growth of the food and beverage industry in India and China. According to International Coffee Organization, in 2015, China produced more coffee than Kenya and Tanzania combined, and consumed more than Australia, owing to increasing disposal income of consumers.
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Key players in the market are focused on various business strategies such as geographical expansion, in order to enhance their presence in the global market. For instance, in 2013, the Food Empire Group entered the India coffee market with an US$ 0.43 million investment in an instant coffee plant in Andhra Pradesh, which was a 100% export-oriented unit.
Major players operating in the global instant coffee market include, Nestle S.A, Keurig Green Mountain Inc., Starbucks Corporation, Jacobs Douwe Egberts, Tata Global Beverages Limited, Strauss Group Ltd, Luigi Lavazza S.P.A., Matthew Algie & Company Limited, Kraft Foods Inc., Tata Global Beverages, Tchibo Coffee International Ltd, Unilever Plc., Leo Coffee, Cothas Coffee Co., Hintz Foodstuff Production Gmbh, Illycaffe S.p.A., Sri Narasu’s Coffee Company Pvt. Ltd., Hindustan Unilever Limited, Zino Davidoff, BM Foods, and CCL Products (India) Ltd.
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