27 Oct 2020
Posted in Consumer
Japan’s hot drinks sector to reach US$26.6bn by 2024, says GlobalData
The Japanese hot drinks sector which includes hot coffee, hot tea and other hot drinks, is forecast to grow from J¥2.1 trillion (US$19.6bn) in 2019 to J¥ 2.5 trillion (US$26.6bn) by 2024, recording a compound annual growth rate (CAGR) of 3.6%, says GlobalData, a leading data and analytics company.
GlobalData’s report, ‘Japan Hot Drinks – Market Assessment and Forecasts to 2024’ reveals that the ‘hot coffee’ was the largest category with value sales of J¥1.4 trillion (US$13.4bn) in 2019. The category also led the sector in volume terms with sales of 339 million kg in the same year. Moreover, hot coffee is forecast to register the fastest value and volume growth category with 3.9% and 2.0% CAGRs during 2019-2024.
Anchal Bisht, Consumer Analyst at GlobalData, says “Coffee consumption is fast becoming ingrained in the modern lifestyle of urban consumers in Japan. Consumers’ keen eye for convenience has well been capitalized companies through installation of vending machines in myriad locations, as well as by café chains. This has improved quick pick-up spots in addition to offering place to hangout, thus offering continued growth in demand for coffee.”
The value share of Japan in the global hot drinks sector is projected to increase from 9.6% in 2019 to 9.9% by 2024. However, the country’s share at regional level is expected to decrease from 24.3% in 2019 to 22.8% by 2024.
In terms of distribution channels, on-trade transactions accounted for 34.3% share of the overall hot drinks sales in 2019. Hot coffee and hot tea categories held higher share of on-trade sales compared to other hot drinks.
Nestle SA, Ajinomoto Group and UCC Ueshima Coffee Co Ltd are the leading companies in the Japanese hot drinks sector in 2019. Nescafe remains the most popular hot drinks brand in the country in 2019. Private labels accounted for a considerable value share in the Japanese hot drinks sector and stood at 6.6% in 2019.
Ms Anchal concludes: “Ongoing health & wellness trend has enabled consumers to seek products with health benefits, resulting in rising penchant for green tea. In addition, health conscious consumers have become more demanding in relation to transparency in ingredient formulation and claims such as FOSHU certification, which is likely to drive innovations in the market.”