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The coffee pods market size is forecast to increase by USD 11.56 billion at a CAGR of 5.69% between 2023 and 2028. The market in developed economies is witnessing significant growth due to the convenience they offer. However, factors such as fear and anxiety regarding the environmental and ecological aspects of coffee pods are posing challenges. The increasing demand for organic and fairtrade products is a growing trend in the market. Despite the high profits, production costs remain a concern for manufacturers. International markets offer vast opportunities for expansion, with collaborations being a popular strategy for companies to expand their reach. The quest for unique flavors, such as caramel, continues to drive innovation in the industry. However, the high price of coffee pods and the availability of cheaper substitutes remain significant challenges.
Coffee pods, also known as coffee capsules or single-serve coffee containers, have gained significant popularity in recent years due to their convenience and consistency in coffee preparation. These pre-measured doses of coffee, available in various flavors such as caramel, chocolate, and hazelnut, are housed in formats like coffee capsules and flat bags. Pressed coffee in aluminum-based capsules offers a premium quality experience, ensuring a perfect cup every time. Sustainability and environmental footprint are growing concerns in the coffee industry. Biodegradable packaging and compostable paper for coffee pods are emerging solutions to reduce waste. Multiple machines, including those using portafilters, can also be used with coffee pods, offering flexibility for coffee consumption preferences.
Moreover, coffee pods offer customization in caffeine concentration, catering to various consumer needs. As a natural stimulant, caffeine consumption in coffee is a popular choice for many, with caffeinated options available in various flavors. Maxicoffee, for instance, offers a wide range of coffee pods, ensuring a diverse selection for coffee lovers. Coffee preparation with pods is quick and easy, making it a convenient choice for busy lifestyles.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.
The soft pods segment is estimated to witness significant growth during the forecast period. The market, which includes soft and hard pods, experienced significant growth in developed economies in 2022, with soft pods being the largest segment. Soft coffee pods, which are loose, un-pressed coffee portions, are primarily used in long cup brewing machines and offer better extraction due to their flexibility. Soft coffee pods are environmentally friendly as they generate less waste compared to hard pods and are relatively lower in production costs. Compatible brewing machines for soft coffee pods include models from Black and Decker, Hamilton Beach, and Better Chef.
Moreover, these pods are also easily accessible in physical stores such as supermarkets and are priced lower than hard coffee pods, making them a popular choice among consumers. Despite the profits generated in this market, ecological and environmental aspects are becoming increasingly important, leading to collaborations between companies and initiatives to improve sustainability in coffee pod production and disposal. Key players in the industry are focusing on enhancing the flavor profile of their products, with some offering varieties infused with flavors such as caramel and caramel macchiato.
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The soft pods segment was valued at USD 19.38 billion in 2018 and showed a gradual increase during the forecast period.
Europe is estimated to contribute 37% to the growth of the global market during the forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
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The market experienced significant growth in developed economies, particularly in Europe, due to increasing consumer preference for convenience and ease of use. Fear and anxiety related to the pandemic have driven more individuals to work from home, leading to an increase in coffee consumption. The European market was valued at a substantial revenue in 2022 and is projected to expand further during the forecast period. This region's market is moderately fragmented, with numerous regional and a few global companies, including Caffe Borbone, contributing to its growth. Countries such as the Netherlands, France, Switzerland, Italy, the UK, Germany, Belgium, Spain, Russia, South Africa, Sweden, Finland, and Denmark hold immense potential for coffee pods in terms of both volume consumption and revenue generation.
Additionally, the rising household expenditure on food and beverage in Europe, coupled with product collaborations and innovations, is expected to propel the growth of the market. However, ecological and environmental aspects, such as waste disposal and sustainability, are becoming increasingly important considerations for consumers. Companies are addressing these concerns by focusing on the use of biodegradable and compostable coffee pods, which is a trend expected to gain traction in the market. The international markets for coffee pods are also evolving, with emerging economies in Asia Pacific and Latin America presenting significant opportunities for growth. Flavor profiles, such as caramel, continue to be popular among consumers, driving demand for various coffee pod offerings.
Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The convenience in using coffee pods is the key driver of the market. The market has witnessed significant growth since the late 2000s, with major players such as Illycaffe and Caffe Motta spearheading this trend. This expansion can be attributed to the increasing urbanization and rising working population in developing economies, leading to an increase in demand for convenient-to-use food and beverage products. Coffee pods, as a single-serving coffee solution, have gained popularity, particularly in regions like North America and Western Europe.
Furthermore, these pods eliminate the need for manual coffee preparation processes, such as grinding beans, dosing, and tamping, making them an ideal choice for urban consumers seeking premium quality coffee with minimal effort. Coffee pods offer customization in terms of flavors and caffeine content, making them an excellent natural stimulant for consumers seeking to boost their metabolism, alertness, and cognitive function.
The growing demand for organic and fairtrade products is the upcoming trend in the market. The organic market has witnessed significant growth in recent years due to the increasing consumer awareness towards healthier and naturally sourced products in the food and beverage sector. companies have responded to this trend by providing organic coffee pods for the past five years. The demand for organic coffee pods is anticipated to continue rising during the forecast period, as the popularity of organic products increases. Fairtrade practices have gained prominence in the coffee pods industry due to several reasons, including the lack of education for coffee farmers, adverse climatic changes, insufficient technical support, inadequate infrastructure in coffee-growing communities, and rising farm costs.
Moreover, these factors have led to a greater emphasis on ethically sourced products and the need for obtaining certifications for a wide range of agricultural commodities and raw materials. Illycaffe and Caffe Motta, among other leading companies, have recognized this trend and are committed to providing premium quality coffee pods with a focus on organic and Fairtrade certifications. Coffee preparation using these pods offers consumers the convenience of flavors customization, while also providing the natural stimulant benefits of caffeine, which contributes to improved metabolism, alertness, and cognitive function.
The high price of coffee pods and availability of cheaper substitutes is a key challenge affecting the market growth. The market faces a significant challenge due to the higher price point of these products compared to traditional coffee preparations, such as whole-bean coffee. This price disparity is particularly noticeable in developing economies in Asia, Eastern Europe, and Latin America. For instance, a pack of Nescafe Dolce Gusto Organic Espresso Honduras 12 Capsules costs approximately USD5.64, whereas a 100-gram jar of Nescafe Coffee- Classic is priced around USD3.50. Consumers in densely populated countries like India, China, Indonesia, the Philippines, Japan, and Nigeria continue to favor traditional coffee products due to their cost-effectiveness and ability to prepare more cups of coffee than a single package of coffee pods.
Moreover, premium quality coffee pod brands like Illycaffe and Caffe Motta offer a range of flavors and customization options, appealing to consumers seeking a convenient and high-end coffee experience. Coffee pods provide a quick and easy way to consume caffeine, a natural stimulant that boosts metabolism, alertness, and cognitive function. However, the higher caffeine content may not be suitable for everyone, and consumers should consider their individual caffeine tolerance levels.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Alois Dallmayr KG - The company offers coffee pods such as Capsa Barista, Capsa Belluno, and Capsa Boost. Also, they offer coffee solutions, tea solutions, and vending solutions.
The market research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
Coffee pods, also known as coffee capsules or pre-measured doses, have revolutionized the way we consume coffee in developed economies. These convenient single-serve containers, which can be used in various coffee machines, including espresso machines and pod machines, offer premium quality coffee with just the press of a button. Coffee pods come in various flavors such as caramel, chocolate, hazelnut, and more, catering to diverse consumer preferences. Sustainability and environmental footprint are becoming increasingly important considerations in the coffee industry. Coffee pods are available in biodegradable packaging and compostable paper, reducing their ecological impact. Aluminum-based capsules, while not biodegradable, are being recycled more frequently.
In conclusion, the coffee pod market is driven by economic growth, travel, hospitality, restaurants, catering, and changing work habits, including hybrid work systems. Coffee consumption, a natural stimulant known to boost metabolism, alertness, and cognitive function, is a significant factor. However, concerns regarding caffeine consumption, including fear and anxiety, insomnia, restlessness, and elevated blood pressure, have led to the popularity of decaffeinated coffee. The market for coffee pods is expanding internationally, with collaborations and partnerships between major players like Illycaffe and Caffe Motta, and new entrants in the market. The coffee preparation process and flavor customization continue to be key differentiators, with caffeine concentration varying between caffeinated and decaffeinated options. Coffee pods are available in various retail channels, including hypermarkets/supermarkets, specialty stores, and cafes/bars.
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Market Scope |
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Report Coverage |
Details |
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Page number |
168 |
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Base year |
2023 |
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Historic period |
2018-2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 5.69% |
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Market growth 2024-2028 |
USD 11.56 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
5.3 |
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Regional analysis |
Europe, North America, APAC, South America, and Middle East and Africa |
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Performing market contribution |
Europe at 37% |
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Key countries |
US, Germany, Italy, France, and China |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Alois Dallmayr KG, Baronet Coffee Inc., Beantown Roasters Inc., Dualit Ltd., Illycaffe Spa, Inspire Brands Inc., Iris Group Pte. Ltd., JAB Holding Co., LUIGI LAVAZZA S.p.A., maxingvest AG, Nestle SA, Rogers Family Co., Starbucks Corp., Strauss Group Ltd., The J.M Smucker Co., The Kraft Heinz Co., Trilliant Food and Nutrition LLC, White Bear Coffee Co., WP Coffee, and Puro Gusto Ltd. |
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Market dynamics |
Parent market analysis, market growth inducers and obstacles, market forecast, fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, market condition analysis for the forecast period |
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Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Product Type
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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