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Ready-to-drink coffee poised to take off

From the September 2016 issue.

Euromonitor International reports on one of the fastest growing product segments to emerge in coffee over the past five years.

A ready-to-drink coffee can
The global ready-to-drink (RTD) coffee market has grown considerably over the past five years, now making it a US$18 billion retail market, according to Euromonitor International’s research.

While it has grown by just 2 per cent since 2014, this represents the weakest performance of the past five years, as leader Japan’s 3 per cent value decline hurt the industry. However, RTD coffee is booming in the US and China, the second and third most valuable RTD coffee markets, with value sales growth of 13 per cent and 23 per cent in 2015 respectively. Double-digit value growth was also achieved in a number of other countries including Switzerland, the UK, Canada, Malaysia, and Indonesia.

Why are sales of RTD coffee growing in these markets while declining in Japan? Japanese workers had been drinking canned RTD coffee for a cheap energy boost but are now trading out of the category to freshly brewed coffee from convenience stores for a better taste experience. There is also competition from other functional options such as energy drinks. In contrast, RTD coffee makers in the US and China are benefiting from the growth in specialist coffee shops by launching premium products such as using cold-brew formulas and frozen whole milk and innovative packaging to offer a café-style experience.

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