The Australian hot drinks sector, which includes coffee, tea and other hot drinks, is forecast to grow from A$3.4bn (US$2.5bn) in 2018 to A$3.99bn (US$3bn) in 2023, recording a compound annual growth rate (CAGR) of 3.5%, says GlobalData, a leading data and analytics company.

GlobalData’s report, ‘Australia Hot Drinks – Market Assessment and Forecasts to 2023’ reveals that the hot coffee category led the sector with the majority share of 79.8% in 2018. The category is forecast to grow at a value CAGR of 3.9% during 2018–2023 to increase its share to 81.3% by 2023. The growth will be particularly high in the coffee beans, and roast and ground coffee segments.

Mohammed Masiuddin Shajie, Consumer Analyst at GlobalData, says: “Vibrant coffee culture and increasing number of specialty cafes are playing a pivotal role in the growing demand of hot coffee in Australia. The country witnessed an increase in the number of small coffee houses close to offices in the recent past, adding to the growing popularity of hot coffee in the country.”

The per capita consumption of hot coffee is significantly high in Australia compared to the regional and global averages. It is also higher when compared to other categories such as hot tea and other hot drinks (chocolate and malt-based hot drinks).

Nestle SA, Jacobs Douwe Egberts and Unilever are the leading companies in the Australian hot drinks sector. Nescafe remains the most popular coffee brand in the country. Further, private labels, which account for a small share, are growing at a higher CAGR than brands in the sector.

Shajie concludes: “Hot coffee will remain the leading category in terms of sales in the Australian hot drinks sector during the next five years. In 2018, three of the top five companies depended on hot coffee sales for over 80% of its revenue. The established coffee culture in Australia will make sure that hot coffee will continue its domination over other hot beverages.”