Other Hot Drinks in Ecuador

PROSPECTS AND OPPORTUNITIES

Coffee shops poised for robust growth amid changing preferences

The coffee shop industry in Ecuador is on an upward trajectory, driven by an evolving coffee culture and increased consumer demand for unique experiences. The entry of Starbucks into the Ecuadorian market in 2024, with plans to open five stores by the year's end, marks a significant milestone that has spurred competition.

Hard discounters and private label to broaden their footprint

The continued expansion of hard discounters and private label in Ecuador is set to redefine the retail landscape, with these formats increasingly resonating with value-driven consumers. Tuti, a leading hard discounter, exemplifies this trend with its significant growth since 2019, now operating over 420 stores nationwide.

Industry shifts toward affordable premium offerings

In response to mounting competition and diminishing profit margins, industry leaders are increasingly targeting the affordable premium segment to differentiate their offerings and encourage higher consumer spending. Nestlé has spearheaded this approach with an ambitious campaign for Nescafé Gold, employing strategic shelf placements and partnerships with plant-based dairy producer Terrafertil to appeal to health-conscious and environmentally aware consumers.

PROSPECTS AND OPPORTUNITIES

Low penetration in traditional channels limits growth

The limited availability of tea products in Ecuador’s traditional retail channels, such as small independent neighbourhood stores, poses a significant challenge to the category's growth during the forecast period. These channels are crucial in reaching consumers in rural and lower-income areas, where modern retail infrastructure remains underdeveloped.

Tea appeals to wellness seekers

The increasing focus on health and wellness has positioned tea as a preferred choice for Ecuadorians seeking healthier beverage options. This shift reflects a broader aversion to sugary drinks and a desire for beverages with inherent health benefits.

Increasing variety and the introduction of samples

Ecuador’s diverse agricultural resources provide a strong foundation for the development of unique and locally inspired tea products. Indigenous ingredients such as guayusa continue to gain traction, offering a healthy and sustainable alternative to coffee or energy drinks.

PROSPECTS AND OPPORTUNITIES

Companies addressing concerns about high sugar content

The growing emphasis on reducing sugar consumption in Ecuador presents a significant opportunity for companies in the other hot drinks category. Although not yet a dominant trend, the increasing awareness of sugar’s health implications has led to notable shifts in consumer preferences.

Other plant-based hot drinks increasing availability in modern channels

The demand for plant-based hot drinks has gained significant momentum in Ecuador, with yerba mate emerging as a particularly dynamic category. Brands like Amanda have expanded their presence by offering a diverse range of products, including traditional, premium, and compound yerba mate varieties infused with mountain herbs.

Decreasing demographics challenge the category

The other hot drinks category faces a significant challenge due to Ecuador’s declining child population, a key consumer group for flavoured powder drinks such as Chocolisto and Ricacao. Historically marketed towards children, these products risk losing relevance as birth rates decline and the demographic composition shifts.