Climate-stressed coffee harvests and higher energy and logistics costs pushed hot drinks prices up in 2025, but consumers largely protected their daily coffee and tea rituals and selectively traded up into premium and functional options. Over the next years, structurally higher coffee prices, consumers prioritising functionality, café-style moments at home, social media-shaped Gen Z habits and the rise of Chinese-style coffee and tea chains will shape much of hot drinks’ growth and innovation.
Delivery
This report comes in PPT.
Key Findings
Brewing prices: How coffee prices are changing the market
Green coffee has moved into a structurally higher, volatile price band, driven by climate-hit harvests, rising input and freight costs, and new trade risks from US tariffs, EUDR and regional blocs. Producers, roasters and retailers must reprice, resize packs and lean harder on premium to defend higher prices, making pricing strategy a core battleground for future value growth.
Social media platforms drive discovery and influence Gen Z preferences
TikTok and Instagram are Gen Z’s go-to spaces for coffee and tea inspiration. Brands that customise their social media approach for each platform can connect with this audience and expand their reach.
Functionality beats sustainability
Under sustained cost-of-living pressures, consumers prioritise benefits such as energy, focus, calm and family wellbeing over distant abstract sustainability promises. This puts functional coffee and tea at the centre of value defence. Brands that now deliver clear, believable wellness benefits in familiar formats can better justify a price premium with consumers focusing more on themselves.
In home: The new social hub for hot drinks
Home is becoming the main stage again for coffee and tea, as rising out-of-home prices push consumers to invest in machines and recreate café experiences in their kitchens. Hot drinks have that way a chance to replace alcohol in social occasions, especially for younger generations, making “meeting at home” a key moment for brands that can deliver café-level quality.
Chinese coffee and tea shops seek beyond their domestic turf
Leading Chinese coffee and tea brand, eg Luckin, Mixue and Chagee, are accelerating global expansion, targeting Southeast Asia and North America in 2025. This strategic move is reinforced by IPO filings designed to secure capital for sustained growth.
Our expert’s view of Hot Drinks in 2026
Key findings
Hot drinks at a premium with pricing up and volumes under pressure
Top five trends in Hot Drinks
Top five trends uncovered
Rising commodity costs lead to consequences on retailer shelves
Coffee now lives with high prices and fragile supply
Going the premium route to justify higher prices to the consumer
With prices high, premiumisation is the way for growth for companies
Gen Z is reshaping the coffee and tea industry through active usage of social media
Identifying top flavours through social media is key to win Gen Z consumers
Starbucks launches Coco Matcha and Coco Cold Brew to appeal to Gen Z consumers
HEYTEA partners with fitness influencer to engage Gen Z consumers
I nfluence in every sip: Social media as the key to Gen Z engagement
Consumers do want functional, concrete value for themselves and their families
Whole bean with benefits: Function without new ritual
Broad demands, singular focus: The consumer
Tea can further leverage its healthy positioning
Attracting consumers works by communicating clear, convincing value for them
Rediscovering home as a place for wellness and connection
New rise of home café and tea house culture
Starbucks Caramel Latte: Instant café treats for the living room
When the home becomes the café: Growth in the new social hub
Chinese coffee and tea shops enter into new markets such as Southeast Asia and US
Luckin enters the US, positioning itself as a global brand
Chagee positions itself as a premium tea brand blending culture with modern lifestyle
Blending global ambition and hyper-local relevance is key for long-term growth
Future implications
Opportunities for growth
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