Instant Coffee Dominates Home Consumption as Premium Products Gain Traction

According to Maria Kabalyk, head of category and shopper at JDE Peet’s, instant coffee is the driving force behind the substantial consumption of home-brewed coffee, representing 76% of all coffee cups prepared at home. The stronghold of instant coffee on the market underscores the emerging market for premium instant coffee options that marry rich flavor, indulgence, and affordability.

Consumers increasingly attempt to replicate coffee shop experiences within their homes, motivated by the desire to save money and recreate café atmospheres. This trend presents an opportunity for convenience stores to offer flavor-focused products, further emphasized by the visible growth within the specialties and mixes coffee segment, which is outpacing other formats in market penetration over the past three years.

Kabalyk advises retailers to stock options such as Kenco Iced/Hot and Kenco Millicano Tins to leverage this growth. The market for single-serve pod and capsule machines is also expanding, with Tassimo machines capturing 50% of the market share.

The relevance of right pricing remains critical for consumers who seek indulgent yet convenient coffee experiences at manageable prices. JDE Peet’s recommends independent retailers provide ample shelf space for coffee displays and offer a wide selection to meet changing consumer needs. A suggested retail strategy includes positioning more affordable products on lower shelves and higher-end instant and pod products at eye level, using striking signage to draw consumer interest.

While coffee remains the dominant beverage in the hot drinks sector, hot chocolate and malted drinks are noteworthy categories worth attention. Kerry Cavanaugh from Mars Drinks & Treats underscores the importance of positioning hot chocolate options alongside tea and coffee offerings, advocating for a selection that includes instant, add-milk, and malted variants. Lydia Stubbins of Divine Chocolate adds that factors like premiumization, flavor innovation, and ethical sourcing are becoming vital determinants in consumer choices for hot chocolate.