10 Nov 2020
Posted in Consumer
Thailand’s hot drinks sector to reach US$2.17bn by 2024, says GlobalData
The Thai hot drinks sector which includes hot coffee, hot tea and other hot drinks is forecast to grow from ฿46.2bn (US$1.46bn) in 2019 to ฿65.9bn (US$2.17bn) by 2024, recording a compound annual growth rate (CAGR) of 7.3%, says GlobalData, a leading data and analytics company.
GlobalData’s report, ‘Thailand Hot Drinks – Market Assessment and Forecasts to 2024’ reveals that the ‘hot coffee’ dominated the Thai hot drinks sector with value sales of ฿42.1bn (US$1.33bn) in 2019. The category also led the sector in volume terms with sales of 78.1 million kg in the same year. Moreover, category is forecast to register the fastest value growth at a CAGR of 7.6% during 2019-2024. It is followed by other hot drinks and hot tea categories with CAGR of 5.0% and 4.1%, respectively.
Anchal Bisht, Consumer Analyst at GlobalData, says “Rise in number of local and multinational coffee chains is offering optimum growth opportunities for the sector. As more and more consumers are leaning towards an out of home coffee experience, demand for sophisticated taste profiles is gaining strength, driving overall category value. Growing sophistication of palates alongside increasing popularity of authentic taste of locally grown coffee and its brews in local shops and cafés are further fueling sales”
The value share of Thailand in the global hot drinks sector is expected to increase from 0.7% in 2019 to 0.8% by 2024. Similarly, the country’s share at regional level is expected to rise from 1.8% in 2019 to 1.9% by 2024.
Nestle SA, Jacobs Douwe Egberts and New Concept Product Co., Ltd. are the leading players in the Thai hot drinks sector. Nescafe, owned by Nestle SA, remained the most popular hot drinks brand in the country. Private labels accounted for a low presence in the overall hot drinks sector in the country and held a value share of only 0.6% in 2019.
Convenience store was the most popular channel for distribution of hot drinks in Thailand, followed by hypermarkets and supermarkets. These two leading channels accounted for a combined value share of 63.1% in 2019, while on-trade transactions accounted for 19.3% share in the same year.
Ms Anchal concludes: “Rising consumer inclination towards the consumption of premium quality coffee will drive demand for freshly brewed coffee beans, expanding the category’s opportunities further. Furthermore, big coffee brand names are offering various products at reasonable prices to increase their penetration among Thai consumers, another factor that will support future growth.”