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STORES | Staff Reporter, Australia

Coffee shops on the rise in Australia

Growing experimentation amongst cafes are expanding consumer palates.

Amidst the rising number of coffee shops in Australia, the country's hot drinks sector is tipped to grow from $2.4b (A$3.5b) in 2019 to $2.8b (A$4.1b) in 2024 at a compound annual growth rate (CAGR) of 3.5%, according to a GlobalData report.

Hot coffee was found to be the largest category in terms of both value and volume sales in 2019. The category is projected to record the fastest value growth at CAGR of 3.9% for 2019–2024. The category is followed by other hot drinks and hot tea categories with CAGRs of 3.8% and 0.8%, respectively.

“Hot coffee remains a favorite amongst the Australians. Rising number of coffee shops are promoting coffee culture in the country, thus increasing the popularity among Millennials as well as elderly consumers,” GlobalData's consumer analyst Anchal Bisht commented.

Bisht also noted that the growing number of cafes as well as the novelty, experimentation and education they bring to the mix, have further expanded consumer palates.

Meanwhile, hot tea is also widely consumed in the country, and health-conscious consumers of varying ages are gravitating towards novel tea varieties like specialty, match and herbal teas.

“Considerable opportunities are emerging from the foodservice sector, where these tea varieties are finding more space in their menus as consumer preferences evolve, aiding the overall category growth,” Bisht added.

Hypermarkets and supermarkets were the leading distribution channel in the sector, accounting for a value share of 44.1% in 2019. Sales through on-trade channels accounted for 40.1% in the same year.

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