Industry Outlook

Rapid socio-economic development that has taken place over the decades is resulting in the rise in cases of several chronic diseases such as heart disease, cancer, and diabetes. Growing health consciousness is boosting consumer inclination towards RTD tea and coffee. Changing lifestyles that encourage on the go eating and growing trend to replace meals with smaller nutritional snacks are stirring up the adoption of the product.

The trend of being proactive to chronic health problems is creating a staggering volume of demand for ready to drink tea and coffee as they contain antioxidants and other essential ingredients. Global trends are moving towards personalized nutrition.

Product Insights

RTD coffee is a cold brewed coffee, which has relatively high sweetness and high amounts of caffeine. The segment has marked the presence of key beverage manufacturers. Protean coffee bean prices have been a major challenge for manufacturers for a long time.

The El Niño effect, which caused a lot of problems in the coffee plantations, has eased down; thereby, helping the market to revive. Introduction of new flavors in these products is expected to promote the growth of the segment.

RTD tea belongs to the category of non-alcoholic soft drinks. The drinks are available in both dairy and non-dairy forms. Manufacturers are making process improvements to bring out the best tea flavors with added nutritional benefits to escalate the demand for these products.

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Packaging Type Insights

The type of packaging directly influences the purchase decision of consumers. Canned and glass bottle type of packaging also hold prominent positions in the market. They represent 28.0% and 24.0% of the overall market in 2015.

Glass Bottle as packaging material for milk-based products is the oldest form of packaging. Several major brands still use glass bottles as it improves the product image and also forms an important part of the brand identity of these products. The recyclability and reusability of glass makes it an important form of packaging material for the product.

Regional Insights

The Middle East & Africa is poised to post a CAGR of 7.0% from 2016 to 2024. High consumption of tea coupled with changing retail landscape is projected to provide an upthrust to the consumption of ready to drink products in this region. Flourishing foodservice segment in this region can further encourage the demand for RTD tea and coffee.

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Ready to Drink Tea and Coffee Market Share Insights

Distribution channels play an important role in the value chain of the market. Generally, companies operating in the market are involved in mass production. Demand for the product mostly remains high, due to which easy access to the product becomes the major differentiating factor for manufacturers.

Manufacturers have established alliances with retailers for the sale of their products. Retailers are also gaining importance due to growing demand for soft drinks. Major retailers who have RTD tea and coffee in their product portfolio are Walmart Stores Inc.; Costco Wholesale Corporation; Carrefour S.A.; and Tesco PLC.