STORES | Staff Reporter, Thailand

Local and multinational coffee chains take off in Thailand

More consumers are drawn towards an out-of-home coffee experience.

A rise in the number of local and multinational coffee chains is offering big growth opportunities for Thailand's hot drinks sector, which is projected to grow from $1.46b (฿46.2b) in 2019 to $2.17b (฿65.9b) by 2024, according to GlobalData. This translates to a compound annual growth rate (CAGR) of 7.3%.

In the industry, hot coffee was in the lead with value sales of $1.33b (฿42.1b) and volume sales of 78.1 million kg in 2019. The category is also expected to grow the fastest at a CAGR of 7.6% for 2019-2024. It is followed by other hot drinks and hot tea categories with CAGR of 5% and 4.1%, respectively.

As more consumers are drawn towards an out of home coffee experience, a demand for sophisticated taste profiles is gaining strength. This is expected to drive overall category value, according to GlobalData's consumer analyst Anchal Bisht.

“Growing sophistication of palates alongside increasing popularity of authentic taste of locally grown coffee and its brews in local shops and cafés are further fueling sales,” Bisht added.

A rising inclination towards consuming premium quality coffee is also expected to drive demand for freshly brewed coffee beans, expanding opportunities for the hot drinks sector further.

“Furthermore, big coffee brand names are offering various products at reasonable prices to increase their penetration among Thai consumers, another factor that will support future growth,” Bisht added.

Convenience store was the most popular channel for distribution of hot drinks in Thailand, followed by hypermarkets and supermarkets. These two leading channels accounted for a combined value share of 63.1% in 2019, whilst on-trade transactions accounted for 19.3% share in the same year.

Photo from Unsplash.

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