The The Global Coffee Pods Market in 2017: The End of an Era? global briefing offers an insight into to the size and shape of the Hot Drinks market, highlights buzz topics, emerging geographies, categories and trends as well as pressing industry issues and white spaces. It identifies the leading companies and brands, offers strategic analysis of key factors influencing the market - be they new product developments, packaging innovations, economic/lifestyle influences, distribution or pricing issues. Forecasts illustrate how the market is set to change and criteria for success. The analysis can focus on both retail and foodservice.
Product coverage: Coffee, Other Hot Drinks, Tea.
Data coverage: market sizes (historic and forecasts), company shares, brand shares and distribution data.
Why buy this report?
- Get a detailed picture of the Hot Drinks market
- Pinpoint growth sectors and identify factors driving change
- Understand the competitive environment, the market’s major players and leading brands
- Use five-year forecasts to assess how the market is predicted to develop.
- Key findings
2. Category Overview
- The years of double-digit pod growth are over
- Pods remain very much a developed world phenomenon
- The developed world will remain the core of the category
- Pods still playing a minor role in global consumption
- The US is the new global centre of pod sales
- The geographical picture should stay largely consistent
- Income growth is not a driver of pod sales, unlike for coffee overall
- Conclusions: Growth trends in pod coffee
- Convenience is the driving factor behind pod machines growth
- Pod machine sales are losing their edge over standard machines
- Is there a hard ceiling on pod machine sales?
- Most countries have not yet hit the peak
- Conclusion: There are four types of markets for pod machines
3. Pods and Income
- Pods are the most expensive type of coffee in all regions
- Pods are not an affordable option in most developing markets
- Wealth is important to pod consumption, but it is not everything
- USD30,000 seems to be the key threshold
- Brazil is the exception that proves the rule
- Pods as inferior goods: The case of Spain
- Conclusions: Pods and Income
4. Brand strategy
- JAB Holdings makes a run at Nestl é for global pod dominance
5. Brand Strategy
- Few areas escape the dominance of Nestlé or JAB
- Nescafé Dolce Gusto: Nestlé aims for the lower end of the price tier
- L’Or Espresso and JDE’s Nespresso dilemma
- Caffisimo and the importance of branding in pods
- Grupo Nutresa: Can developing world companies beat Nestl é ?
- Private label brands are growing across the world
- Conclusions: Competitive landscape
6. Slowdown in North America
- Slowing growth in North America is shaking the category globally
- Unmet potential still exists in North America
- Keurig has not been able to follow up on its breakthrough machine
- Can anyone challenge Keurig’s dominance?
- Prices have been falling since 2012
- Patent expiration freed the Keurig and Nespresso systems
- Commodification in action: The US
- Commodification in action, part 2: Café Royal in Western Europe
8. Future Outlook
- How can the consumer base of pods be expanded?
- The sustainability challenge
- Making pods more sustainable: Four main options
- Premiumisation: Embracing the third wave
- Super-premiumisation: Going for the very high end
- What new functionalities are possible for machines?
- Trends to look for in pods
The next few years will see a considerable slowdown in the growth rate of pods globally
The pods category grew at an average annual rate of 18% in real value terms over 2011-2016. This astounding growth rate was unsustainable, and slowed to single digits in 2016, which is predicted to continue for the foreseeable future. Even so, pods remain the best performing category not only in coffee, but in hot drinks in general.
The woes of Keurig in North America are the major reason for this slowdown
Consumers in Canada and the US fell in love with the Keurig system and its compatible K-cups during the early years of the review period, but a botched follow-up machine led to both the company and the category in general falling out of favour with consumers. Market maturity also played a major role in slowing North American growth. Because of this, Western Europe will resume being the central region for global growth, as was the case prior to 2010.
The high price of pod coffee remains a significant problem for the category
Coffee made from pods is comparatively much more expensive than alternative options. While this has made for healthy profit margins for companies, it has restricted the category’s appeal and made it vulnerable to disruption from newer, value-oriented products, especially private labels.
Prices are falling as a result of more brands entering the category
Patent expirations affecting the Nespresso and Keurig systems have opened the category up to a large number of new, value-oriented competitors. This has made the category more affordable, but has posed a challenge to the category’s model of getting the machines into the hands of consumers and profiting from high mark-up pods.