Coffee Pods and Capsules Market Size Analysis - Market Share, Forecast Trends and Outlook Report (2025-2034)

The global coffee pods and capsules market was valued at USD 31.08 Billion in 2024. The market is evolving to cater to consumer demand for healthier options. Brands are launching organic, low-calorie, and functional coffee pods enriched with vitamins or adaptogens, appealing to health-focused consumers. The industry is expected to grow at a CAGR of 6.80% during the forecast period of 2025-2034 to attain a value of USD 60.01 Billion by 2034.

Coffee Pods and Capsules Market Overview

Coffee pods and capsules provide exceptional convenience, enabling users to brew coffee swiftly without grinding or measuring. They guarantee a consistent taste and quality in every cup, catering to various preferences with an extensive selection of flavours. Their portability makes them ideal for travel, while minimal cleanup streamlines the brewing process, contributing to the growth of the coffee pods and capsules market. In September 2022, Eight O'Clock Coffee launched a new line of coffee pods emphasising single-origin beans. This initiative appeals to consumers keen on exploring a wide range of coffee flavours from across the globe.

Sealed packaging helps maintain the freshness and aroma of coffee pods, ensuring a pleasant experience. Various trends in the coffee pods and capsules market are further impacted by their design for single servings, making them perfect for those desiring just one cup at a time. They are user-friendly and simple to operate, allowing even non-coffee drinkers to enjoy them. With no leftover grounds, they help reduce waste and are compact for easy storage. In August 2023, Lavazza launched a premium range of coffee capsules focusing on Italian blends. Compatible with various machines, these capsules promise to deliver authentic Italian coffee at home, catering to enthusiasts who value traditional flavours and aromas.

Coffee Pods and Capsules Market Growth

Brewing speed is another key benefit, with many machines able to prepare coffee in under a minute. Most coffee pod systems do not require specialised equipment, making them compatible with a range of machines. Users can customise brew strength for a personalised experience, significantly reducing the risk of over-brewing, which can cause bitterness. Their wide availability in stores and online makes them easily accessible, driving the demand of the coffee pods and capsules market. In January 2023, McCafé launched its coffee capsule range to deliver café-quality coffee at home. The new pods, featuring a variety of blends, cater to consumers who desire convenience without sacrificing flavour.

Coffee pod machines consistently maintain optimal water temperatures for brewing, enhancing flavour. They operate more quietly than traditional grinders, creating a serene brewing environment. The coffee pods and capsules market dynamics and trends are further supported by its models being energy-efficient and designed to use less power. Some brands also offer eco-friendly or compostable pods, aligning with sustainability initiatives. Lastly, they enable consumers to enjoy barista-style beverages without needing extensive skills. In April 2023, Illy introduced a new range of compostable coffee capsules. These environmentally friendly options are designed to work with existing espresso machines, appealing to eco-conscious consumers while maintaining the brand’s acclaimed quality.

Key Trends and Developments

Global coffee consumption, introduction of smart coffee machines, and growing focus on health and wellness are some the key trends propelling the coffee pods and capsules market.

April 2024

PLA producer NatureWorks and coffee packaging firm IMA Coffee launched a fully compostable coffee capsule. The new pods, made from NatureWorks’ Ingeo biopolymer, were designed to be compatible with existing Keurig machines. The rigid capsule body, lid, and filter were all constructed using Ingeo PLA grades.

December 2023

TIPA and ATI partnered to launch the first fully compostable coffee pod lid, addressing environmental concerns about traditional waste. Crafted from sustainable materials, these lids aim to reduce the impact of plastic. This collaboration marked a significant step towards eco-friendly coffee consumption, setting a precedent for sustainable packaging in the industry.

February 2023

Tim Hortons launched a new range of coffee pods showcasing their signature blends. Created for use with Keurig machines, these pods aim to bring the beloved taste of Tim Hortons coffee into homes.

January 2023

RAVE Coffee unveiled a new collection of single-origin coffee pods, emphasising ethically sourced beans. These pods are designed for coffee lovers seeking distinctive flavours while placing importance on sustainable choices.

Growth in Coffee Consumption

Global coffee consumption has seen a steady rise, particularly in regions like North America and Europe, significantly supporting the growth of the coffee pods and capsules market. According to the International Coffee Organization (ICO), global coffee consumption is estimated to have increased to 170.3 million 60-kg bags from 164.9 million bags in coffee year 2020/21, up 3.3%. The US and Canada’s coffee consumption grew by 5.4% to 31.9 million bags in coffee year 2021/22, while Europe’s consumption was around 54.2 million bags. This rising consumption, coupled with increasing demand for convenience, has made coffee pods and capsules a preferred choice among consumers. In North America, the trend towards single-serve coffee solutions has been particularly strong, with companies like Keurig and Nespresso driving the market. The demand for premium, specialty coffee is also increasing, as consumers look for high-quality, consistent brews with minimal effort. This shift in consumer preferences towards premium, convenient coffee options has led to a rapid expansion of the coffee pods and capsules market, with major brands innovating to offer a wide variety of flavours and blends tailored to diverse tastes.

Sustainability Focus

The growth of the coffee pods and capsules market is increasingly centred on sustainability, driven by consumer demand for eco-friendly products. Brands are creating compostable or recyclable capsules to minimise environmental impact. Innovations in packaging materials, such as bioplastics, are gaining momentum, and companies are adopting circular economy practices. This trend not only attracts environmentally conscious consumers but also aligns with global sustainability objectives, prompting manufacturers to investigate more sustainable sourcing and production methods. Consequently, eco-friendly options are becoming more mainstream, influencing purchasing decisions and fostering greater brand loyalty. In September 2022, CoffeeB launched a sustainable alternative to coffee capsules, promoting it as the world's most environmentally friendly coffee 'capsule'. Introduced earlier this year by Swiss retail company Migros, CoffeeB is marketed as a 'capsule-less' coffee capsule system.

Technological Advancements

Technological innovations are reshaping the coffee pods and capsules market, enhancing both convenience and quality. Smart coffee machines with app connectivity enable users to control brewing parameters remotely and explore a broader array of coffee options. Improvements in capsule design are increasing compatibility across different machines, making it easier for consumers to enjoy various brands. Additionally, technology is driving the creation of new brewing methods, such as cold brew and speciality drinks, within capsule systems. These advancements not only enhance the user experience but also stimulate market growth by appealing to tech-savvy consumers seeking modern solutions. In September 2024, Cambio Roasters launched its revolutionary aluminium coffee pods. This shift from plastic to aluminium marked a significant advancement in both sustainability and coffee quality.

Health and Wellness Trends

Growing focus on health and wellness is the key trend of coffee pods and capsules market. The market is evolving to cater to consumer demand for healthier options. Brands are launching organic, low-calorie, and functional coffee pods enriched with vitamins or adaptogens, appealing to health-focused consumers. There is an increasing interest in speciality coffees that offer additional benefits, such as enhanced immunity or improved concentration. This trend is influencing product lines and marketing approaches, prompting companies to emphasise the health advantages of their capsules. By aligning with wellness trends, brands can attract a wider audience and build loyalty among health-conscious consumers. In January 2023, Wellness Brew launched coffee capsules that include added vitamins and minerals, specifically targeting health-minded individuals. These pods are designed to boost energy and support immunity, making it easier for people to integrate wellness into their daily routines.

Coffee Pods and Capsules Market Trends

Expanding distribution channels are playing a pivotal role in boosting the coffee pods and capsules market. The increasing availability of these products through online platforms, including popular e-commerce websites and dedicated coffee brands, has made coffee pods more accessible to a wider range of consumers. Online shopping provides the convenience of home delivery, allowing customers to easily purchase their preferred coffee products from the comfort of their homes.

Supermarkets and hypermarkets are also essential distribution channels, with major retailers like Walmart, Tesco, and Carrefour expanding their coffee pod sections to meet growing demand. These stores often feature prominent displays, encouraging impulse purchases and making coffee pods and capsules readily available for both regular consumers and those seeking premium or specialty options.

Market Restraints

The coffee pods and capsules market faces several key restraints. Environmental concerns persist, as traditional pods contribute to significant waste, deterring eco-conscious consumers. High prices compared to ground coffee can limit access for budget shoppers. Many pods are machine-specific, restricting compatibility and consumer choice. Additionally, perceptions of inferior quality can hinder adoption, particularly among coffee enthusiasts.

Regulatory challenges regarding packaging may increase production costs, while health concerns about certain plastics can negatively impact purchasing decisions. Market saturation leads to intense competition, complicating product differentiation. Shifting consumer preferences towards personalised brewing methods further affects demand, and supply chain disruptions can impact raw material availability.

Coffee Pods and Capsules Industry Segmentation

The report titled “Coffee Pods and Capsules Market Report and Forecast 2025-2034” offers a detailed analysis of the market based on the following segments:

Market Breakup by Type

• Capsules
• Pods

Market Breakup by Distribution Channel

• Off Trade
• On Trade

Market Breakup by Region

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East and Africa

Market Analysis by Type

Capsules offer remarkable convenience, enabling quick brewing without the need for grinding or measuring, which is ideal for busy lifestyles, thereby contributing to the growth of the coffee pods and capsules market. They provide consistent flavour and quality, ensuring a dependable coffee experience every time. Lightweight and compact, capsules are perfect for travel. Additionally, their sealed packaging helps maintain freshness, while the wide selection caters to various taste preferences, with compatibility across different machines enhancing user flexibility. In March 2023, Caffè Nero launched its new range of coffee capsules, featuring popular blends such as their signature Italian Roast. Compatible with Nespresso machines, these capsules aim to bring the café experience into consumers' homes.

Pods are designed for single servings, allowing users to brew just the right amount and minimise waste. They are easy to use, even for those unfamiliar with coffee brewing. Many pods are environmentally friendly and made from compostable materials. In October 2023, Starbucks launched a new range of at-home coffee pods, featuring popular blends like Pike Place Roast and Espresso. Designed for use in compatible machines, these pods aim to deliver the iconic Starbucks coffee experience conveniently at home.

Market Analysis by Distribution Channel

Off-trade sales, including supermarkets and online retailers, give consumers convenient access to a wide array of coffee pods and capsules, often at competitive prices due to promotions. This allows for diverse selections, bulk purchasing for savings, and home delivery options. The coffee pods and capsules industry revenue is boosted by online platforms that facilitate informed buying decisions through product research and reviews. In March 2022, Coffeeza, a leading Indian brand, shifted from plastic to recyclable aluminium coffee capsules compatible with Nespresso® original line machines. This move followed the launch of their manufacturing facility and introduced popular blends like Classico, Cremoso, Intenso, and Forte, made from premium Indian coffee.

On-trade establishments such as cafes and restaurants provide consumers with a distinctive experience, allowing them to savour freshly brewed coffee in a social atmosphere. The growth of the coffee pods and capsules industry is driven by these venues, which guarantee high-quality preparation and presentation, appealing to consumers looking for premium coffee. On-trade locations frequently offer exclusive blends and speciality drinks, while skilled baristas enhance the experience with their knowledge. Additionally, these settings promote social interaction, making coffee consumption a communal event. In March 2024, Nespresso, a leader in coffee pods, opened its first Nespresso Bar in the UK, aiming to tap into London’s thriving on-the-go coffee market. This location on Old Broad Street was the first Nespresso Bar to launch in Europe, with plans for further expansion throughout London and the UK in the coming years.

Coffee Pods and Capsules Market Regional Insights

Europe Coffee Pods and Capsules Market Analysis

Europe is witnessing a notable increase in coffee pods and capsules demand, particularly in Germany, Italy, and France. The market provides a wide array of flavours and blends, encouraging consumers to explore different coffee styles. Meanwhile, many brands focus on eco-friendly packaging and compostable options to appeal to environmentally conscious customers. According to the European Commission, in 2020, the EU produced over 1.9 million tonnes of coffee, reflecting a 10% increase since 2010, when production was 1.8 million tonnes.

North America Coffee Pods and Capsules Market Trends

The North American coffee pods and capsules market value is set for substantial growth, supported by major companies such as Keurig Dr Pepper, Nestlé Nespresso, and Starbucks. Coffee pods and capsules are easily accessible in stores and online, enabling consumers to find their favourites. Many brewing systems also offer customisation for strength and size, enhancing personalisation. As reported by the Coffee Association of Canada (CAC), Canada has experienced the highest growth in coffee imports among major traditional markets, with over 30 developing countries exporting coffee there. The industry's influence in the country is significant, supporting 160,000 jobs and generating USD 6.2 billion in total sales.

Asia Pacific Coffee Pods and Capsules Market Insights

In India brands such as Coffeeza, Nescafé, and Blue Tokai Coffee Roasters highlight the growing coffee pods and capsules market share in the Asia-Pacific region. Brands are prioritising eco-friendly packaging and compostable options to attract environmentally conscious consumers. Additionally, coffee pods and capsules are readily available in supermarkets and online, ensuring easy access for shoppers. According to the Coffee Board of India, the country cultivates both Arabica and Robusta coffee varieties. In the 2023/2024 season, India produced more than 1.66 million 60-kilogram bags of Arabica coffee, while Robusta production reached 4.53 million 60-kilogram bags.

Latin America Coffee Pods and Capsules Market Analysis

Key markets in the region include Brazil, Mexico, and Argentina, where there is significant demand for coffee pods and capsules market. The market thrives on continuous innovation in brewing technology and flavour profiles, appealing to coffee enthusiasts. Additionally, local brands source high-quality beans, supporting the economy and attracting consumers interested in local products. In November 2023, Café do Mercado introduced a new range of organic coffee capsules crafted from 100% Arabica beans. The capsules are designed to be compatible with popular machines and emphasise sustainable sourcing in Brazil.

Middle East and Africa Coffee Pods and Capsules Market Driving Factors

The African coffee pods and capsules market is growing, especially in Niger, Chad, Egypt, Ethiopia, and Morocco. The production and sale of coffee pods and capsules bolster local economies through job creation and support for local brands, while ongoing innovations in brewing technology improve the consumer coffee experience.

Innovative Startups in the Coffee Pods and Capsules Market

Innovative startups in the coffee pods and capsules market bring several benefits, including disruption of traditional business models through subscription services that enhance convenience. They prioritise sustainability by developing compostable or recyclable pods, appealing to eco-conscious consumers. Startups also offer diverse product options, leverage advanced technology for customisation, and respond quickly to market trends. Many emphasise quality sourcing and artisanal methods, attracting consumers seeking premium experiences. Additionally, they engage communities through social media, target niche markets with specific demands, and employ creative marketing strategies to boost brand awareness and drive sales, meeting evolving consumer preferences effectively.

Drink Coffee Do Stuff: This startup unveiled a new line of completely compostable coffee pods crafted from plant-based materials. Their environmentally friendly initiative seeks to minimise ecological impact while providing rich, high-quality coffee for consumers who prioritise sustainability.

Jot Coffee: Jot Coffee launched instant coffee capsules tailored for rapid brewing. These capsules contain concentrated coffee, enabling busy individuals to savour high-quality coffee without sacrificing flavour or convenience, making them ideal for those with on-the-go lifestyles.

Competitive Landscape

The coffee pods and capsules market key players focus on sourcing high-quality beans from sustainable farms around the world, emphasising ethical practices and direct trade relationships. They utilise artisanal methods to carefully roast beans, highlighting their unique flavours and characteristics. Offering a diverse selection of blends and single-origin coffees, they attract enthusiasts who appreciate freshness and quality. Committed to transparency and sustainability, promotes eco-friendly packaging and initiatives. Their passion for coffee extends beyond roasting; they aim to educate consumers about the origins and nuances of their products, fostering a deeper appreciation for speciality coffee.

Nestlé S.A.

Headquartered in Vevey, Switzerland, Nestlé S.A. was established in 1866. As one of the largest food and beverage companies globally, it offers a diverse range of products, including coffee brands like Nespresso and Nescafé. Nestlé is committed to sustainability and innovation in the coffee sector.

Luigi Lavazza S.p.A.

Founded in 1895 and based in Turin, Italy, Luigi Lavazza S.p.A. is a leading coffee roaster known for its high-quality blends and espresso products. The company focuses on sustainability and direct trade, ensuring ethical sourcing of coffee beans while maintaining a strong global presence in the coffee market.

illycaffè S.p.A.

Established in 1933 and headquartered in Trieste, Italy, illycaffè S.p.A. is renowned for its premium espresso coffee. The company emphasises quality and sustainability, sourcing Arabica beans from selected growers worldwide. illy is celebrated for its innovative coffee solutions and commitment to excellence in every cup.

Rave Coffee

Founded in 2014 and based in Birmingham, UK, is a speciality coffee roaster dedicated to sourcing high-quality beans from sustainable farms. Known for its artisanal approach, Rave Coffee offers a variety of blends and single-origin coffees, focusing on freshness and flavour to enhance the coffee experience.

Other market key players in the coffee pods and capsules market report are The Kraft Heinz Company, Jacobs Douwe Egberts Pro, Caffitaly System S.p.A., Toro Caffè, Dualit Limited and The J.M. Smucker Company, among others.