Datamonitor report: Hot drinks in Australia to 2013
Sales of hot drink products in Australia surpassed $1350 million in 2008 and are expected to be worth $1473 million in 2013, with the coffee category accounting for the largest share followed by tea, according to Datamonitor’s report Hot drinks in Australia to 2013. The biggest growth in coffee is coming from out-of-home consumption with more and more consumers adopting the idea of cafe culture. In the tea category, consumers are showing increasing interest towards specialty tea segments such as green tea and herbal tea due to the perceived health and wellness benefits.
According to Datamonitor, currently, for every seven cups of coffee consumed by an average Australian, one is consumed out-of-home.
At-home coffee consumption is witnessing strong demand for high-quality roast and ground coffee as consumers are seeking to replicate the quality and taste of cafes’ coffee. According to Datamonitor’s Market Data Analytics database, retail coffee sales in Australia grossed $752 million and ranked second, behind Singapore, in per capita coffee consumption amongst the Asian economies in 2008.
Although demand for roast coffee is growing, the at-home coffee category is still dominated by instant coffee, accounting for more than 80% of the total Australian coffee sales. Nestlé, Cantarella and Sara Lee together account for more than two-thirds of the total coffee sales in volume. Datamonitor forecasts the at-home coffee market to reach $798 million by 2013.
In contrast, the Australian tea category was valued at $437 million in 2008 and is forecasted to reach a value of $473 million in 2013. Currently, the tea sales in Australia are driven by the at-home segment with per capita consumption of less than 0.8 kg per annum. In contrast, the per capita consumption for the out-of-home tea market stands at less than 0.1 kg per annum. The Lipton brand from Unilever, followed by Dilmah and Tetley, are the favourite tea brands amongst Australians.
The fruit infusions/herbal tea and green tea segments are leading the growth in the tea market with around 5% growth over the past decade in comparison to negligible growth in the higher value segment such as black tea.
Consumers in Australia have now matured in their tastes and preference for hot drinks and are demanding premium products in both the coffee and tea category. To optimise returns, manufacturers are banking on this trend and launching new products with distinctive features such as organic, antioxidants, etc. In light of all the current indications, Datamonitor predicts the Australian hot drinks market to be in the order of $1.5 billion over the next 5 years.
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