The Indian hot drinks market is expected to grow at a compound annual growth rate (CAGR) of 9% from INR670.6bn ($9.0bn) in 2020 to INR1,032.0bn ($12.3bn) in 2025, majorly driven by growth in the hot coffee category, observes GlobalData, a leading data and analytics company.
GlobalData’s report, ‘India Hot drinks – Market Assessment and Forecasts to 2025’, reveals that hot coffee category is forecast to register the value CAGR of 9.6% during 2020–2025. The category is followed by hot tea, which is expected to record a CAGR of 8.9% during the same period.
Isha Katurde, Consumer Analyst at GlobalData, says: “India is predominantly a tea drinking country. However, coffee consumption is increasing due to influences such as the cafe culture, social media marketing of brands and premiumization. Furthermore, along with conventional varieties, the novel varieties of coffee are catching the consumers’ attention.”
‘Convenience stores’ was the leading distribution channel in the Indian hot drinks sector in 2020, followed by ‘hypermarkets & supermarkets’ and e-retailers.
The per capita expenditure (PCE) of hot drinks in India increased from $5.5 in 2015 to $6.8 in 2020, which was lower than both the global level (US$31.8) and the regional level ($20.4). Furthermore, per capita expenditure of hot drinks in India is expected to increase and reach $8.8 by 2025.
Unilever, Tata Consumer Products Limited and Nestle were the top three companies in the Indian hot drinks sector by value in 2020, while TATA Tea and Red label were the leading brands.
Katurde concludes: “The common man’s drink–tea, registered a drop in its consumption during the COVID-19 pandemic as the major on-premises consumption experienced a stand still. The consumption did continue in households but could not cover the loses. However, consumption of healthier variants of tea, such as green tea and herbal tea is gaining popularity among the health-conscious consumers. Considering all the factors, the hot tea category is estimated to grow in the next five years.”
