PUBLISHER: Knowledge Sourcing Intelligence | PRODUCT CODE: 1122595
PUBLISHER: Knowledge Sourcing Intelligence | PRODUCT CODE: 1122595
The global coffee pods market is projected to witness a compound annual growth rate of 5.75% to grow to US$26,787.331 million by 2027 from US$1,8106.528 million in 2020.
The demand for coffee pods has surged because of the gradual change in consumer preferences to have innovative and ready-to-use products and rising urbanization. Coffee is one of the most imperative and traded agricultural products or commodities globally. According to the data given by The International Coffee Organization in 2017, 70% of the total production of coffee was exported worldwide, and it was worth USD 19 Billion.
The sector gave employment to more than 125 million people worldwide and had a retail market value of USD 83 billion in 2017. Coffee is cultivated on 12.5 million farms worldwide, out of which smallholder farms play an imperative role. 67-80% coffee cultivation of total coffee cultivated land are smallholder farms situated in developing countries, including countries with low human development index. The coffee pod-based product will have a significant role in the market's growth because it is readily available and can be brewed or used for household, industrial and other purposes. The coffee pods refer to the making of coffee like those of teabags. It is available in filter paper, small pouches, and other types of packaging material. It is also a single-use coffee container because only one coffee can be prepared from a pod. It simplifies the brewing process by eliminating additives and additional flavours, which helps in the reduction in time to make coffee, and it also simplifies the overall process. The pod pack covers the sachet in a tight airfoil, and then it is dipped with nitrogen, which helps preserve the aroma and flavour of the freshly ground beans until the pouch or a sachet is opened. It is widely popular in the food services business like bars, cafes, hotels, and restaurants because of its productive and superior quality. It doesn't require any substantive capital to train staff and other purposes.
Sustainable Coffee Pods will have an imperative role in the market's growth.
Over the past few years, consumption and the use of coffee have surged at an exponential rate. There are many choices from multiple brands that provide up-to-the-scratch coffee pods, which will have an imperative role in the overall market growth. Nevertheless, there are major environmental concerns that have hindered market growth. Major manufacturers and producers have adopted various sustainable practices to comply with environmental regulations and standards. There has been a rise in adopting Voluntary Sustainability Standards (VSS) by producers and coffee pod makers. According to the International Coffee Organization data, 34.5% of the total coffee production was under VSS Compliant in 2016. The VSS was introduced to reduce emissions, conserve biodiversity, and enhance worker safety and health standards, while also providing various economic benefits to the producer. This ensured that the demand would rise and increase investments in more sustainable production. At least 3 million metric tons of coffee produced were VSS Compliant with a value of USD 7.2 billion, according to the Food and Agriculture Organization of the United Nations (FAO) in 2016. There have been various concerns expressed by manufacturers and regulators regarding coffee pods. Manufacturers are spending a considerable sum of capital on innovation in packaging that provides sustainable solutions. The demand for compostable coffee pods has risen in recent years because of the use of organic materials, reducing greenhouse gas emissions, and avoiding extra coffee waste.
As the COVID-19 pandemic causes total lockdown across the globe for months, the long-term sharp rise in customer needs for at-home coffee is uncertain, but the continuing disruption to out-of-home sales volume due to the disease outbreak has obligated major coffee bands to promote profits through retail packaged coffee. For example, Costa Coffee expanded its packaged coffee portfolio across the region in June 2020. Similarly, Pret a Manger, a UK-based coffee and food-to-go chain that has been heavily affected by reduced commuter visitors during the pandemic, had tried to expand its reach in the at-home coffee market by introducing a packaged coffee portfolio on e-commerce giant, Amazon.
According to the data given by the International Coffee Organization, Europe was the major consumer of coffee in the fiscal year 2020.
The region consumed around 55,089 sixty kg bags and grew at a decent rate. North American and South American regions consumed 31,434 and 26,905 sixty kg bags in 2020. Asian Pacific region also registered a decent growth and consumed 37,067 sixty kg bags in the given fiscal year. The total consumption of coffee was around 167,592 sixty kg bags worldwide. Global coffee production in the fiscal year 2020 was estimated at 169.34 million bags, a slight reduction of 2.2% from the previous year. The slump is due to the reduction in the output of Arabica, which was decreased by 5% to 95.99 million bags. Robusta meanwhile registered a growth of 1.2% to 73.36 million bags from the previous year. COVID-19 had a significant negative impact on the market as global consumption decreased by 0.5% to 167.81 million bags from the previous year because the pandemic put considerable pressure on the global economy. People have avoided the usage of restaurants, cafes, and other home venues, which negatively impacted the overall coffee market growth.
Brazil has been the biggest exporter of coffee worldwide, followed by Vietnam, Colombia, Indonesia, and India. Brazil exported 40,434 sixty bags globally. Vietnam, Colombia, Indonesia, and India exported 26,537 bags, 12,639 bags, 6,796 bags, and 5,314 bags globally, with every nation registering a negative growth from the previous year because of the pandemic. European Union has been the biggest importer of coffee, soloed by the United States, Japan, Russia, and Switzerland. European Union imported around 70,330 sixty kg bags in the fiscal year 2020. The demand for coffee will surge again at a significant rate after the pandemic effects decrease. As most governments spend their resources combating the pandemic, the coffee pod market will face a significant challenge.
Major Producers and key players are investing a substantial sum into innovation and R&D in the diversification of the coffee and packaging. Some of the developments are:
In April 2022, Coles launched a new of its Coles Urban Coffee Culture brand's biodegradable coffee capsules, a first for a major Australian retailer. Coles Urban Coffee Culture Organic Home Compostable Pods are crafted with bio-sourced cellulose and vegetable oils and can be biodegradable in-home recycling bins in about the same amount of time as an orange peel.
In October 2021, NEXE Innovations Inc., a pioneer in plant-based materials manufacturing, had introduced NEXE Coffee's first product lines, which will be sold in its patented NEXE Pods, which are compatible with Keurig® single-serve brewery systems.
In January 2020, Nestle launched a novel recycling program for its Nespresso and Dolce Gusto Coffee pods and capsules. The plan's name was Pod Back, which would provide consumers with an integrated plan and a solution to recycle Dolce Gusto and Nespresso Products.
In August 2018, a global alliance was formed between Starbucks and Nestle S.A in consumer-packaged goods and services. Starbucks gave the rights to Nestle to sell, make, and distribute its packaged tea and coffee. The alliance led to a surge in the Nestle stock price at a record rate of 2.9%.
In November 2018, K-cup Coffee pods announced a collaboration with Dunkin Donuts and J.M. Smucker Company to produce, distribute, and sell their product through each other's portfolios.
Middle East and Africa