Indonesia, India and Vietnam among fastest growing coffee markets

New research from Mintel reveals that three out of the five fastest growing retail coffee markets are in Asia.


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The global coffee market continues to brew up a storm and Asia is playing a key role in its growth. New research from Mintel reveals that three out of the five fastest growing retail coffee markets are in Asia. Indonesia is currently the fastest growing packaged retail coffee market with a CAGR of 19.6% over the past five years, while India has had a CAGR of 15.1% and Vietnam 14.9%. Overall, the global coffee market continues to grow steadily, with expected retail volume growth of 2.7% in 2016, following a 2.5% rise in 2015.

While Asian markets currently make up the majority of the world’s fastest growing coffee markets, European markets, as well as Australia, are among the slowest. Mintel research indicates that Finland’s mature coffee industry declined the most between 2011 and 2016 with a CAGR of -3.7%, followed by Australia (0%), Poland (0.1%), the Netherlands (0.5%) and Belgium (0.5%).

The boom in Asia’s coffee market has been driven by a surge in innovation of coffee products. According to Mintel’s Global New Products Database (GNPD), between 2011 and 2016 the number of new coffee products launched in Asia has risen by 95%. In comparison, the number of tea products launched has risen by a comparatively low 55% in the same time period.

Jonny Forsyth, global drinksanalyst at Mintel, said: “The global coffee industry continues to experience healthy growth, driven by Asian markets in particular. Asia has far more growth potential as traditionally tea drinking consumers are converted slowly but surely into coffee drinkers. In 2016, there was also an increasing number of coffee launches which blurred the boundaries between coffee and tea. A tea-drinking culture is the biggest barrier to coffee in Asia, and tea-coffee hybrids can be used to tempt consumers.”

Innovation within the coffee space
In terms of local tastes, currently Asia Pacific leads the way in launches of ready-to-drink cold coffee. In 2016, 29% of all coffee launches in Asia Pacific were ready-to-drink cold coffee products, compared to just 10% in Europe. Additionally, coffee mixes are a huge part of the retail coffee landscape. In the same year, ‘x-in-1’, (i.e. 2-in-1, 3-in-1 or 4-in-1 mixes) accounted for 16% of all retail coffee launches in Asia, up from 12% in 2014.

However, instant coffee still dominates the retail market in Asia. Two in five (42%) coffee launches in Asia Pacific were soluble coffee granule products, compared to just one in five (20%) launches in Europe and a mere 6% of launches in North America in 2016.

Globally, it is coffee pods which are causing the biggest stir. Pods accounted for over one-quarter (26%) of all global coffee retail innovation in 2016, up from 11% of launches in 2011. Although still in its early stages in Asia Pacific, pod innovation is still showing strong signs of growth in this region. Around one in eight (13%) coffee products launched in 2016 was a coffee pod, up from 4% of launches in this region in 2011.

“As emerging market consumers develop their taste for coffee, innovation is stepping up a notch as drinkers trade up from instant to fresher-tasting coffee. However, despite increased premiumisation in the global coffee market, the most commodified form of coffee – soluble coffee granules – remains a hugely important segment, especially in Asia. As consumers trade up from instant coffee, pod and capsule sales will increase,” Jonny adds.