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Rising prices and subsequent price sensitivity dampen volume sales in 2025
In Sri Lanka, retail volume sales of hot drinks slowed in 2025, primarily as a result of price increases brought on by taxes, pressures on input costs, and volatile commodities markets. Tea, suffered from price hikes brought on by VAT as well as consumer downtrading into less expensive packs. While other hot drinks, such as malt-based hot drinks, saw a decline in popularity as affordability and health worries over sugar tightened household budgets, coffee showed a moderate increase, helped by younger customers and growing interest in flavoured and instant variants. In 2025, foodservice helped to shape premium attitudes, especially in coffee, although retail still had a strong position. Younger customers viewed cafés as places to meet people and as places to try flavoured and cold brew beverages. Nevertheless, exorbitant prices discouraged return visits, strengthening retail channels for everyday purchasing. As a result, foodservice had a greater impact on innovation and brand aspiration than on volume sales.
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Overview:
Understand the latest market trends and future growth opportunities for the Hot Drinks industry in Sri Lanka 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 Sri Lanka, 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 Sri Lanka 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 Sri Lanka?
- To what extent are health considerations impacting consumption of Hot Drinks in Sri Lanka?
- What are the traditional preferences in Hot Drinks in Sri Lanka? 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 Sri Lanka?
- Which are the leading brands in Hot Drinks in Sri Lanka?
- How are products distributed in Hot Drinks in Sri Lanka?
- 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 Sri Lanka
Rising prices and subsequent price sensitivity dampen volume sales in 2025
KEY DATA FINDINGS
Affordability is paramount in consumer purchasing decisions except for wellness-focuses categories
Healthier variants increase in popularity
Rising environmental concerns remain secondary to cost-effectiveness
Rising costs dampen growth of hot drinks over the forecast period
Industry players focus on smaller pack sizes, wellness led innovation and digital marketing campaigns
Distribution strategies remain crucial while retail e-commerce becomes more significant
Nestlé Lanka Plc is present with its Nescafé brand
Sunshine Holdings Plc with its Watawala brand achieves the strongest dynamism
Small local grocers dominates sales of hot drinks
Modern grocers registers the strongest growth which stimulates sales of retail e-commerce
Table 1 Sales of Hot Drinks by Retail vs Foodservice: % Volume Breakdown 2020-2025
Table 2 Sales of Hot Drinks by Retail vs Foodservice: % Volume Growth 2020-2025
Table 3 Retail Sales of Hot Drinks by Category: Volume 2020-2025
Table 4 Retail Sales of Hot Drinks by Category: Value 2020-2025
Table 5 Retail Sales of Hot Drinks by Category: % Volume Growth 2020-2025
Table 6 Retail Sales of Hot Drinks by Category: % Value Growth 2020-2025
Table 7 Foodservice Sales of Hot Drinks by Category: Volume 2020-2025
Table 8 Foodservice Sales of Hot Drinks by Category: % Volume Growth 2020-2025
Table 9 Total Sales of Hot Drinks by Category: Total Volume 2020-2025
Table 10 Total Sales of Hot Drinks by Category: % Total Volume Growth 2020-2025
Table 11 NBO Company Shares of Hot Drinks: % Retail Value 2021-2025
Table 12 LBN Brand Shares of Hot Drinks: % Retail Value 2022-2025
Table 13 Penetration of Private Label in Hot Drinks by Category: % Retail Value 2020-2025
Table 14 Retail Distribution of Hot Drinks by Format: % Volume 2020-2025
Table 15 Retail Distribution of Hot Drinks by Format and Category: % Volume 2025
Table 16 Forecast Sales of Hot Drinks by Retail vs Foodservice: % Volume Breakdown 2025-2030
Table 17 Forecast Sales of Hot Drinks by Retail vs Foodservice: % Volume Growth 2025-2030
Table 18 Forecast Retail Sales of Hot Drinks by Category: Volume 2025-2030
Table 19 Forecast Retail Sales of Hot Drinks by Category: Value 2025-2030
Table 20 Forecast Retail Sales of Hot Drinks by Category: % Volume Growth 2025-2030
Table 21 Forecast Retail Sales of Hot Drinks by Category: % Value Growth 2025-2030
Table 22 Forecast Foodservice Sales of Hot Drinks by Category: Volume 2025-2030
Table 23 Forecast Foodservice Sales of Hot Drinks by Category: % Volume Growth 2025-2030
Table 24 Forecast Total Sales of Hot Drinks by Category: Total Volume 2025-2030
Table 25 Forecast Total Sales of Hot Drinks by Category: % Total Volume Growth 2025-2030
COUNTRY REPORTS DISCLAIMER
Key data findings
2025 developments
Coffee remains a small but growing category in line with changing consumer lifestyles
Industry performance
Demand for speciality coffee grows thanks to its appeal among young urban dwellers
A coffee culture develops thanks to the launch of coffee shops in key urban areas
What’s next?
Steady forecast period growth of coffee retail value sales despite competition from tea
Technological advancements embraced in manufacturing, distribution and marketing
Health and wellness increasingly influences the industry as do seasonal variations in cultivation
Competitive landscape
Domestic player Harischandra Mills Plc leads coffee
Harischandra benefits from widespread availability
Channels
Small local grocers remains the dominant distribution channel for coffee
Strong growth of supermarkets and hypermarkets, which also bolsters retail e-commerce
Category data
Table 26 Retail Sales of Coffee by Category: Volume 2020-2025
Table 27 Retail Sales of Coffee by Category: Value 2020-2025
Table 28 Retail Sales of Coffee by Category: % Volume Growth 2020-2025
Table 29 Retail Sales of Coffee by Category: % Value Growth 2020-2025
Table 30 NBO Company Shares of Coffee: % Retail Value 2021-2025
Table 31 LBN Brand Shares of Coffee: % Retail Value 2022-2025
Table 32 Forecast Retail Sales of Coffee by Category: Volume 2025-2030
Table 33 Forecast Retail Sales of Coffee by Category: Value 2025-2030
Table 34 Forecast Retail Sales of Coffee by Category: % Volume Growth 2025-2030
Table 35 Forecast Retail Sales of Coffee by Category: % Value Growth 2025-2030
Key data findings
2025 developments
Moderate growth of tea sales as costs rise
Industry performance
Tea drinking remains common in Sri Lanka across demographics
Premium categories remain niche while strong blends and flavoured tea are increasingly favoured
What’s next?
Positive growth of tea sales over the forecast period though pricing pressures dampen the category’s development
The Sri Lankan tea industry experiences modernisation through technological advances
Health and wellness increasingly influences tea sales in Sri Lanka
Competitive landscape
Sunshine Holdings Plc leads tea with its popular Watawala brand
Strong growth of Sunshine Holdings and the lesser known Basilur
Channels
Small local grocers dominates sales of tea thanks to their convenience and lower prices
Supermarkets and hypermarkets experience the strongest growth for sales of tea
Category data
Table 36 Retail Sales of Tea by Category: Volume 2020-2025
Table 37 Retail Sales of Tea by Category: Value 2020-2025
Table 38 Retail Sales of Tea by Category: % Volume Growth 2020-2025
Table 39 Retail Sales of Tea by Category: % Value Growth 2020-2025
Table 40 NBO Company Shares of Tea: % Retail Value 2021-2025
Table 41 LBN Brand Shares of Tea: % Retail Value 2022-2025
Table 42 Forecast Retail Sales of Tea by Category: Volume 2025-2030
Table 43 Forecast Retail Sales of Tea by Category: Value 2025-2030
Table 44 Forecast Retail Sales of Tea by Category: % Volume Growth 2025-2030
Table 45 Forecast Retail Sales of Tea by Category: % Value Growth 2025-2030
Key data findings
2025 developments
Positive if slower growth of other hot drinks in 2025
Industry performance
Malt-based hot drinks characterises other hot drinks
The category moves from indulgence-driven purchases towards value for money and health functionality
What’s next?
Modest forecast period growth of other hot drinks
Industry players invest in new product formulas, social media campaigns and retail e-commerce platforms
Other hot drinks increasingly influenced by sustainability, wellness and health concerns
Competitive landscape
Nestlé Lanka Plc dominates with its Milo and Nestomalt brands
Unilever achieves the strongest growth with its Horlicks and Viva brands
Channels
Small local grocers appeals to consumers for their neighbourhood locals and smaller pack sizes
Rapid growth of supermarkets and hypermarkets
Category data
Table 46 Retail Sales of Other Hot Drinks by Category: Volume 2020-2025
Table 47 Retail Sales of Other Hot Drinks by Category: Value 2020-2025
Table 48 Retail Sales of Other Hot Drinks by Category: % Volume Growth 2020-2025
Table 49 Retail Sales of Other Hot Drinks by Category: % Value Growth 2020-2025
Table 50 NBO Company Shares of Other Hot Drinks: % Retail Value 2021-2025
Table 51 LBN Brand Shares of Other Hot Drinks: % Retail Value 2022-2025
Table 52 Forecast Retail Sales of Other Hot Drinks by Category: Volume 2025-2030
Table 53 Forecast Retail Sales of Other Hot Drinks by Category: Value 2025-2030
Table 54 Forecast Retail Sales of Other Hot Drinks by Category: % Volume Growth 2025-2030
Table 55 Forecast Retail Sales of Other Hot Drinks by Category: % Value Growth 2025-2030
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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