Hot drinks in 2024: The big picture
While overall demand for hot drinks in South Africa continues to rise, value sales growth is more dynamic. This is because while overall inflation levels in the country have declined in 2024 compared to previous years, they remain elevated within the food and drinks space, causing higher input costs for manufacturers and a decline in consumers’ purchasing power.
2024 key trends
Following a considerable drop in demand during the pandemic, foodservice volume sales of hot drinks have fully recovered in 2024, based on two key factors. First, the direct negative impacts of the pandemic, such as limited freedom of movement and ability to visit bars, restaurants or cafés, is no longer present, although structural impacts remain.
Competitive landscape
While the competitive landscape of hot drinks in South Africa is relatively mature, with major players such as Nestlé, Jacobs Douwe Egberts and Unilever ranking highly, there is still ample opportunity for growth from smaller players, as well as private label. Much of the success seen by these smaller players is the result of higher levels of localisation as a way to mitigate rising prices.
Retailing developments
Sensitivity to price remains a significant factor for many South Africans, prompting retailers to adjust their strategies and focus on volume sales. As a result, promotions, including 2-for-1 and discount offers, remain prevalent across retailers, e-commerce platforms, and mobile app purchases.
Foodservice vs retail split
The absence of consistent power outages in South Africa towards the end of 2024 has improved consumer demand for hot drinks through foodservice. Importantly, affluent consumers are substituting their at-home coffee drinking habits (such as the use of coffee pod machines), to coffee specialists, based on their preference for premium quality and a wider range of coffee types.
What next for hot drinks?
Over the forecast period, the health and wellness trend is likely play a significant role in influencing the performance of hot drinks in South Africa. This is because local consumers are expected to become increasingly concerned about ingredients listed.
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Overview:
Understand the latest market trends and future growth opportunities for the Hot Drinks industry in South Africa with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
Key trends are clearly and succinctly summarised alongside the most current research data available. Understand and assess competitive threats and plan corporate strategy with our qualitative analysis, insight and confident growth projections.
Data and analysis in this report provides further detailed coverage dedicated to the following key categories, where applicable:
- Coffee
- Tea
- Other Hot Drinks
If you're in the Hot Drinks industry in South Africa, our research will help you to make informed, intelligent decisions; to recognise and profit from opportunity, or to offer resilience amidst market uncertainty.
The Hot Drinks in South Africa report includes:
- Analysis of key supply-side and demand trends
- Detailed segmentation of international and local products
- Historic volume and value sizes, company and brand market shares
- Five year forecasts of market trends and market growth
- Robust and transparent research methodology, conducted in-country
This report answers:
- What is the market size of Hot Drinks in South Africa?
- To what extent are health considerations impacting consumption of Hot Drinks in South Africa?
- What are the traditional preferences in Hot Drinks in South Africa? To what extent are these tastes changing amidst increasing international influence and the growth of chained cafés?
- How are changing demographics (for example, an ageing or predominantly young population) determining consumption of Hot Drinks in South Africa?
- Which are the leading brands in Hot Drinks in South Africa?
- How are products distributed in Hot Drinks in South Africa?
- How is the rise of e-commerce changing the retail and competitive landscape?
- Have home seclusion and social distancing measures following COVID-19 benefited sales of Hot Drinks?
- Where is future growth expected to be most dynamic?
Hot Drinks in South Africa
Hot drinks in 2024: The big picture
2024 key trends
Competitive landscape
Retailing developments
Foodservice vs retail split
What next for hot drinks?
DISCLAIMER
Coffee in South Africa
KEY DATA FINDINGS
High unit price of coffee results in dynamic value growth
Additional functional benefits on the rise in coffee offerings
Private label continues to enjoy a positive performance in the category
High foodservice margins predicted to result in expansion of outlets
Dynamic growth predicted for fresh ground coffee pods
Cold brew and iced coffee expected to gain traction over forecast period
Tea in South Africa
KEY DATA FINDINGS
Loose black tea further declines, as consumers shift to more convenient formats
Functional tea strengthened by ingredient innovation and competition
E-commerce drives sales of speciality teas
Lower tea tariffs projected to support local production
Rooibos tourism expected to grow due to designation of origin status
Combination of tea and other drinks expected to gain traction
Other Hot Drinks in South Africa
KEY DATA FINDINGS
Health and wellness trend drives other plant-based hot drinks
Milo remains the dominant brand in malt-based hot drinks
Despite discontinuation of Nesquik, parallel imports increase
Volatility of cocoa prices predicted to cause further price increases for chocolate-based flavoured powder drinks
Ricoffy volumes set to rise, as consumers shift away from more expensive offerings
Private label projected to drive innovation over forecast period
The following categories and subcategories are included:
Hot Drinks
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- Fresh Coffee Beans
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- Fresh Ground Coffee Pods
- Standard Fresh Ground Coffee
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- Instant Standard Coffee
- Instant Coffee Mixes
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- Loose Black Tea
- Tea Bags Black
- Fruit/Herbal Tea
- Green Tea
- Instant Tea
- Other Tea
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- Chocolate-based Flavoured Powder Drinks
- Malt-based Hot Drinks
- Non-Chocolate-based Flavoured Powder Drinks
- Other Plant-based Hot Drinks
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This report originates from Passport, our Hot Drinks research and analysis database.
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