Global Coffee Pods and Capsules Market size poised to Grow at a CAGR of 7.3% by 2030

Introduction

High demand for coffee, as it is the most popular beverage, is the key factor driving the growth of the pods and capsules industry. Coffee pods' one-time use and disposability significantly contribute to their growing popularity among consumers. The market for coffee pods is expanding primarily in developed regions, such as North America, due to the convenience aspect of coffee pods. Due to market maturity and the dominance of the Keurig system in the region, it is anticipated that the capsules category will expand slowly over the projection period. Although Keurig Green Mountain (KGM) has significantly benefited from its near-total dominance of the American and Canadian pod industries, it has harmed the category by keeping prices high and restricting consumer options.

Market Dynamics

Increasing Usage of Single-Serve Coffee in Households to Drive the Global Coffee Pods and Capsules Market

Convenient types of coffee, such as coffee pods and capsules, are gaining favor among the general public to produce high-quality coffee at home in less time. Additionally, many people are willing to purchase coffee machines to duplicate the coffee shop experience at home. Coffee pods compatible with popular machines, such as Nespresso, are being introduced to capitalize on this trend.

The household penetration rates of single-serve brewers in the main cities of the United States and Western Europe range from 23 to 75 percent. According to the National Coffee Drinking Trends survey, single-cup brewers are present in 41% of homes and 28% of offices in the United States. In 2016, 26% of past-day coffee consumers used single-cup brewers, up from 19% in 2012. Those between the ages of 25 and 39 and with children at home are the most likely to own a single-cup brewer, while families with a combined income of more than $100,000 own the most units. The trend of brewing better coffee at home is growing.

Enhanced and Convenient Packaging Gains Consumer Attraction to Provide Opportunities for the global Coffee Pods and Capsules Market

Packaging is increasingly vital in associating a particular brand or product with a sensory experience. The appearance and texture of a package contribute to the consumer experience and can encourage brand loyalty. The styling and embellishments provide an opulent vibe and increase shelf presence.

Additionally, many consumers, particularly millennials, seek items with more apparent benefits and functions that might improve the user experience. The introduction of unconventional package formats using flexible packaging can be used to provide user-friendly choices that expand consumption potential. Convenience is essential to busy customers, as evidenced by the enormous rise of the coffee pods and capsules business. In addition, consumers are willing to pay more for enhanced convenience. Simple elements, such as measured-portion packs and foolproof methods for preparing coffee, produce the best beverage ever. 

Private label brands are also gaining popularity among Americans, as several companies, such as Joe's Garage, a private label brand, offer one-cup round filter coffee pods that are 60 mm in diameter and coated in a high oxygen barrier film to keep the coffee fresh and fragrant. These coffee filter pods' packaging is lightweight, soft, and flexible. All of these factors contribute to the expansion of the market.

Regional Insights

By region, the global coffee pods and capsules market is segmented into North America, Europe, Asia Pacific, and the Rest of the World. Europe dominated the global coffee pods and capsules market and is estimated to grow at a CAGR of 6.8% during the forecast period. The leading importer of green coffee beans in Europe is Germany. The vast coffee roasting sector enables the nation to serve its local market, the largest in Europe, and its export markets. In 2016, approximately 13% of the German population consumed coffee from a single-cup brewer daily. This demonstrated Germany's increased demand for specialty coffees and single-cup brewing methods. Due to a rise in the average retail price of coffee, coffee pod machines are becoming increasingly popular in the United Kingdom, fueling the expansion of the coffee pod industry in the country. According to the British Coffee Association, 95 million cups of coffee are consumed daily in the United Kingdom, which provides enough opportunity for category leaders to innovate. Lavazza, one of the country's leading coffee manufacturers, debuted a line of compostable single-cup pods in 2019. Its compostable coffee pods decompose in six months with no price difference, allowing users to dispose of their capsules quickly. These elements are driving the country's market expansion.

North America is the second largest region. It is estimated to reach an expected value of USD 50 billion by 2030, registering a CAGR of 7.3%. The increased demand for coffee pods in the country might be attributed to the convenience of coffee pods. As the market for pods and capsules in the United States has reached maturity, the growth rate will likely stagnate throughout the projection period. National Coffee Roasters (NCR) developed the Peoples Organic Coffee® brand (Compostable Pod), which comprises Café ClassicsTM and Donut Shop Classics TM, in the United States to attract consumers. In the United States, the installation of coffee machines and the proliferation of coffee shops have increased demand for coffee capsules and coffee pods. Due to the rapidly expanding coffee shop culture, the volume and value of fresh-ground coffee pods are projected to increase substantially over the projection period.

The Asia Pacific is the third largest region. China presents a significant opportunity for large coffee sellers, as the country's preferences have shifted due to the consumption habits of millennials. The increase in product prices and concerns surrounding the use of plastics in coffee pods and capsules present chances for innovation among category participants. In China, Nespresso began a recycling scheme for its coffee capsules at consumers' doorsteps. Due to the country's increasing demand for ready-to-drink coffee products, In terms of market revenue, China is expected to gain importance throughout the forecast period.

Key Highlights

• The global coffee pods and capsules market was valued at USD 27 billion in 2021, and it is anticipated to reach an expected value of USD 50 billion by 2030, registering a CAGR of 7.3% during the period (2022-2030) 

• By type, the global coffee pods and capsules market is segmented into pods and capsules. The capsule segment dominated the global coffee pods and capsules market and is estimated to grow at a CAGR of 7.1% during the forecast period. 

• By distribution channel, the global coffee pods and capsules market is segmented into on-trade and off-trade. The off-trade segment is further bifurcated into supermarkets/hypermarkets, specialty stores, online retailing, and other distribution channels. The supermarkets/hypermarkets segment dominated the global coffee pods and capsules market and is estimated to grow at a CAGR of 6.9% during the forecast period. 

Competitive Players

1. Nestle SA
2. The Kraft Heinz Company
3. inspire brands inc. (DUNKIN BRANDS)
4. Luigi Lavazza SpA
5. JAB Holding Company
6. Starbucks Corporation
7. Gloria Jeans Coffees
8. Strauss Group

Recent Developments

• April 2024 - Nespresso—the industry leader and go-to for premium portioned coffee—announced that its at-home curbside recycling service would accept aluminum coffee capsules from residents of Jersey City, New Jersey's low-rise residential buildings, just like metal, glass, and plastic.
• April 2024 - Nespresso introduced coffee capsules that are entirely biodegradable. Paper pulp and other entirely biodegradable ingredients are used in their creation. After three years of development, I'm so happy that they've finally dropped.

 

Segmentation

1. By Type
   1. Pods
   2. Capsules
2. By Distribution Channel
   1. On-trade
   2. Off-trade
   3. Supermarkets/Hypermarkets
   4. Specialty Stores
   5. Online Retailing
   6. Other Distribution Channels