The Filipino hot drinks sector is expected to grow from ₱90.4bn (US$1.7bn) in 2019 to ₱134.8bn (US$2.5bn) by 2024, recording a compound annual growth rate (CAGR) of 8.3%, says GlobalData, a leading data and analytics company.

GlobalData’s report, ‘Philippines Hot Drinks – Market Assessment and Forecasts to 2024’ reveals that the sector growth is driven by growth in the hot coffee category, which is projected to register the fastest CAGR of 10.1%, in value terms during 2019–2024. The category is followed by hot tea and other hot drinks categories, which are forecast to record CAGRs of 5.5% and 4.2% during the next five years.

Anchal Bisht, Consumer Analyst at GlobalData, says: “Growing urbanization is poised to support sector growth by 2024. The hot coffee category will benefit from the emerging demand for premium coffees, and low current per capita expenditure which leaves room for further growth. Hot tea, which lags due to lack of a strong consumption tradition, continues to gain on the back of strong growth in health-oriented variants such as herbal, fruit and green teas.”

The report further reveals that ‘hot coffee’ registered the highest volume sales of 149.2 million kg in 2019. Also, the category led the sector in value terms with sales of ₱60.5bn (US$1.2bn) in the same year.

Convenience stores accounted for the highest share of 44.9% in the Filipino’s hot drinks distribution channel in 2019. It is trailed at a distance by hypermarkets & supermarkets and food & drinks specialists, which held shares of 33.4% and 13.1%, respectively in the same year.

Nestle SA emerged as the biggest player in the Philippines hot drinks sector in 2019. It was followed by PT Mayora Indah and Universal Robina in the same year. Nescafé is the leading coffee brand, while Lipton is the top selling brand in the tea category.

Ms Anchal concludes: “Growing tourism industry in the country is benefitting the specialty coffee sector on account of rising inclination of tourists to try and experiment different local flavors. Local coffee producers are improving production so as to meet rising coffee demand.”