The Australian hot drinks sector is projected to grow from A$5.3bn (US$3.8bn) in 2020 to A$6.8bn (US$4.9bn) by 2025 at a compound annual growth rate (CAGR) of 5.1% over the five-year period. The laid-back coffee culture in Australia contributed to the growth of specialty cafes, offering a wide variety of hot coffee, says GlobalData, a leading data and analytics company.

GlobalData’s report, ‘Australia Hot drinks – Market Assessment and Forecasts to 2025’ reveals that the market is majorly driven by growth in the hot coffee category, which is forecast to register the fastest value CAGR of 5.4% during 2020–2025. The category is followed by hot tea, which is expected to record a CAGR of 2.7% during the same period.

Isha Katurde, Consumer Analyst at GlobalData, says: “A large base of elderly consumers drive the growth of hot coffee in the Australian hot drinks market. Younger population also show a preference for hot coffee; however they are moving towards healthier hot drinks products such as green tea.”

‘Hypermarkets & supermarkets’ was the leading distribution channel in the Australian hot drinks sector in 2020, followed by convenience stores and food & drinks specialists.

Per capita expenditure (PCE) of hot drinks in Australia increased slightly from US$146.32 in 2015 to US$146.33 in 2020, which was much higher than both the global level (US$31.8) and the regional level (US$20.4). Furthermore, per capita expenditure of hot drinks in Australia is expected to increase and reach US$173.57 by 2025.

​Nestlé, Jacobs Douwe Egberts and Cantarella Bros Pty Ltd were the top three companies in the Australian hot drinks sector by value in 2020, while Nescafe and Moccona were the leading brands.

Katurde concludes: “Hot coffee is estimated to hold a strong position for the next five years in the Australian hot drinks market. The young population will seek products which claim to be low in calories and sugar. Hot drinks which offer unusual and novel flavours and fragrances will likely gain more attention from the consumers.”