In 2024, coffee remains the dominant force within hot drinks in South Korea, continuing to drive overall industry dynamics, despite facing several challenges and opportunities. Hot drinks is heavily influenced by evolving consumer preferences, economic pressures, and the increasing demand for health-conscious products.
While the coffee category has largely stabilised since the disruption seen during the pandemic, it faces a mixed outlook. Foodservice volume sales of coffee are recovering in South Korea as consumers return to cafés, but retail is struggling with declining sales of popular formats such as fresh ground coffee pods.
The competitive landscape in hot drinks in South Korea in 2024 is expected to see no major changes, with Dongsuh Foods Co Ltd remaining the leader, and Nestlé Korea Ltd a solid second, and the only other player to hold a double-digit retail value share. Dongsuh is not resting on its laurels; rather than being confined to the declining instant coffee mixes category, the company is proactively expanding into new areas.
The retailing landscape is witnessing significant shifts in hot drinks in South Korea, particularly with the rapid growth of fresh ground coffee pods, in which retail e-commerce dominates. Consumers are increasingly turning online for their coffee needs, driven by the convenience and variety offered by online platforms.
Coffee sees a delicate balance between the foodservice and retail channels. While in 2024 foodservice volume sales are continuing to recover as consumers return to cafés and restaurants, the retail segment is declining slightly in volume terms, but remains strong, particularly with the rise of premium coffee products and the at-home consumption trend.
Looking ahead, coffee in South Korea is expected to continue to focus on premiumisation, sustainability, and innovation in the forecast period, with consumers seeking both high quality products and convenient solutions. The demand for speciality coffee and artisanal experiences is likely to grow, supported by a discerning consumer base willing to invest in quality.
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Hot Drinks
This report originates from Passport, our Hot Drinks research and analysis database.
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