30 Oct 2020
Posted in Consumer
Increasing desire for unique coffee experiences continues to drive demand in Malaysia, says GlobalData
The hot drinks sector in Malaysia is expected to reach 114.8 million kg by 2024 at a compounded annual growth rate (CAGR) of 2.7% during 2019-2024. The hot coffee consumption remains a daily ritual for a sizable portion of Malaysians but the increasing desire for unique coffee experiences continues to drive the demand. The growing number of cafes and specialty coffee shops are fueling this shift in preference, says GlobalData, a leading data and analytics company.
GlobalData’s report, ‘Malaysia Hot Drinks – Market Assessment and Forecasts to 2024’ reveals that the sector is majorly driven by growth in the hot coffee category, which is forecast to register the fastest value CAGR of 5.8% during 2019–2024. The category is closely followed by hot tea category, which is expected to record a CAGR of 3.9% during the next five years.
Anchal Bisht, Consumer Analyst at GlobalData, says: “Companies have been filling retail shelves with more premium ranges to match increase in sophistication of consumer palates. These advancements are poised to inject further growth into the sector in the foreseeable future.”
The volume share of Malaysia in the global hot drinks sector is expected to remain constant at 0.7% in 2019 through 2024. Similarly, the country’s share at regional level is expected to remain constant at 1.8% 2019 through 2024.
Convenience store was the most popular channel for distribution of hot drinks in Malaysia, followed by hypermarkets and supermarkets. These two leading channels accounted for a combined value share of 64.4% in 2019, while on-trade transactions held a share of 19% in the same year.
Nestle SA, BOH Plantations SDN BHD and Unilever are the top companies in the Malaysian hot drinks sector. Nescafé, Boh, and Lipton remained the most popular brands in the country in the year 2019.
Anchal concludes: “Rising inclination towards high quality coffee led young consumers in Malaysia to enhance their knowledge on coffee brewing methods and ingredient specifications, which are expected to have a positive impact on the sector growth. Although growth in hot tea is not expected to be as robust as hot coffee, preference for novelty is also driving the former – exemplified by robust growth in demand for bubble tea in recent years.”