The hot coffee sector will drive the country's hot drinks sector.
The growing tourism industry in the Philippines is going to boost the country's specialty coffee sector, on the back of a rising inclination from tourists to try out and experiment with different local flavors, according to GlobalData.
The country's hot drinks sector is projected to grow from $1.7b (PHP90.4b) in 2019 to $2.5b (₱134.8b) by 2024, at a compound annual growth rate (CAGR) of 8.3%. This will be driven by growth in the hot coffee category, with the fastest projected CAGR of 10.1%.
Hot coffee also registered the highest volume sales of 149.2 million kg in 2019. Also, the category led the sector in value terms with sales of $1.2b (₱60.5b) in the same year.
Also contributing to the sector growth is the growing urbanisation. "The hot coffee category will benefit from the emerging demand for premium coffees, and low current per capita expenditure which leaves room for further growth," GlobalData's consumer analyst Anchal Bisht commented.
Meanwhile, the hot tea and other drinks categories were projected to record CAGRs of 5.5% and 4.2% over the same period. "Hot tea, which lags due to lack of a strong consumption tradition, continues to gain on the back of strong growth in health-oriented variants such as herbal, fruit and green teas,” Bisht said.
Responding to this rising local demand, the country's coffee producers have been improving production, Bisht added.
Convenience stores take up the highest share of 44.9% in the country's hot drinks distribution channel in 2019. Trailing behind are hypermarkets and supermarkets and food and drinks specialists, which held shares of 33.4% and 13.1%, respectively.
Photo from Unsplash.
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