The cost of living in Israel continued to rise in 2024, significantly affecting demand for hot drinks. Although the annual inflation rate eased slightly in the first half of the year, it surged to 3.
Premiumisation remains a strong trend in the hot drinks market in Israel. Local consumers are increasingly enhancing their at-home coffee-making experiences, spurred by the growing popularity of premium coffee machines.
Strauss Group Ltd maintained its leading position in the hot drinks market in 2024, bolstered by its strong performance in both standard fresh ground coffee and instant coffee under the Elite brand. The company also dominates other hot drinks, where it benefits from limited competition, as smaller players struggle to compete due to restricted marketing budgets and insufficient financial resources.
Since the outbreak of the Israel-Hamas War, there has been an increase in locals shopping at nearby grocers as concerns about being far from home drive consumers to remain close to their residences. At the same time, rising prices and the increased cost of living have led to a surge in shopping at discounters, as consumers seek to save money wherever possible.
On-trade establishments in Israel were significantly impacted by the judicial reform protests in 2023. A series of proposed changes to Israel's judiciary system, which would limit the powers of the Supreme Court, sparked widespread protests, particularly on Thursday and Saturday nights - key times for socialising and dining out in Israel.
The hot drinks market in Israel is expected to continue to face rising prices over the forecast period, in the context of a series of economic changes. As of 1 January 2025, the rate of VAT will increase to 18%, while municipal taxes are set to rise by an average of 5% throughout the year.
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Understand the latest market trends and future growth opportunities for the Hot Drinks industry in Israel with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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Hot Drinks
This report originates from Passport, our Hot Drinks research and analysis database.
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