Essay About Coffee Market And Hot Drinks Market Segment

The Coffee Market in Hong Kong
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The Coffee Market in Hong Kong
The Hot Drinks market segment, “Coffee” consists of caffeinated and decaffeinated coffee in the form
of ground coffee and whole beans. The segment also includes instant coffee products. The segment
does not include Ready to Drink coffee or other hot drinks. The market for hot drinks is structured
into off-trade sales (in stores) and on-trade sales (in coffee shops etc.). Statista values off-trade sales at
retail prices and on-trade sales at purchasing prices to the on-trade establishments. Additional
markups for hospitality services are therefore not taken into account.
While the tea culture is still dominant among the consumers in Hong Kong, the interest in coffee
consumption is continued to rise in the past decade, especially the appreciation of the high quality
coffee. The average coffee consumption per person in Hong Kong is relatively much less than that of
the western countries The leading player in instant coffee is Nestle that captures close to half of the
total market share. Tsit Wing is the leading coffee supplier to various fast food chains, Chinese cafes,
hotels, Chinese and Western restaurants. With over 2,000 coffee shops in Hong Kong, the two largest
coffee chains are Starbucks and Pacific Coffee, operating 145 and 122 outlets respectively.
McDonald’s occupies the third position by expanding its McCafe to 103 outlets in 2015. The coffee
sales are expected to grow in the next five years, although the growth rate is predicted to slow down
due to the maturity of the market. For example, the industry report by Euromonitor International
(2015) forecasted that there would only be a 3% growth of coffee sales in the next five years,
compared to 4% growth rate in the period 2010-2015.