Competitor Strategies in Hot Drinks

Delivery

This report comes in PPT.

Key Findings

Hot drinks value growth has been driven more by pricing and mix than by major share disruption

Inflation, the rising cost of green beans, format mix and premium trade-ups have done more of the work than widespread share reallocation, so the competitive order has shifted only at the margins. The practical takeaway is that winners have tended to be those managing pricing architecture and portfolio mix more effectively, rather than those winning through big share grabs.

Winning portfolios combine everyday scale with a clear premium ladder

Mass brands keep households in the franchise, but the real value is created when portfolios move consumers into capsules, beans and higher value soluble, thus protecting margins and loyalty without relying on constant discounting. Where the ladder is clear and consistent, it supports repeat purchases and keeps consumers trading up, even when budgets tighten.

Growth is split: emerging markets add volume, while developed markets add value

Emerging markets are where incremental consumption sits, while mature markets still deliver disproportionate value through premium formats and often convenience-led propositions, and making balanced exposure an advantage. Hot drinks companies with reach in both can capture new drinkers and still premiumise the base, rather than relying mainly on price increases.

The proposed Keurig Dr Pepper-JDE Peet’s deal signals a shift towards platform competition

Linking an at-home system engine with global coffee scale shifts the core towards platform economics, through procurement leverage, innovation investment and stronger retailer negotiating power, raising pressure on narrower players. It also underlines that future advantage is likely to come from scale backed execution across formats, channels and geographies.

Compliance is now a capability test, not a brand story

EUDR turns traceability into a practical cost of doing business in the EU, favouring operators with disciplined supply chains and strong origin partnerships, and increasing the penalty for weak links and messy data. Over time, this is likely to accelerate supplier rationalisation and probably raise the value of reliable, “audit-ready” sourcing.