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Russia revives hot drinks growth

From the July 2017 issue.

The former Soviet nations are experiencing a surge in demand for hot drinks on the back of a boost in the Russian economy.

Moscow

The fifteen countries that once made up the Soviet Union are the home of about four per cent of the world’s population and only about two per cent of its economic output, but they are responsible for some seven per cent of its hot drinks spending.

While the main reason for this is a high level of black tea consumption, long-term trends are shifting consumption away from black tea and towards new forms of hot drinks, especially coffee.

Growing consumer incomes during the economic boom years of 2009-2013 accelerated these trends.

The onset of recession in Russia slammed the breaks on this experimentation throughout the region, and consumers retreated back to value-priced black tea while they waited for times to improve.

While it is too early to definitively say that the region’s troubles are over, Russia exited recession in early 2017, which should herald a return to stability throughout the region.

With consumers regaining their confidence, the long-term shift from black tea to alternative hot drinks should begin to pick up speed again, making this an area to watch for both coffee and tea during the forecast period.

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