Global Out-of-Home Coffee Market Worth USD 2.26 Billion By 2031 | CAGR of 3.14%

Introduction

The "out-of-home coffee market" refers to sales of coffee made by the HRI (Hotels, Restaurants, and Institutions) industry on a global scale. Numerous customers' online coffee orders have increased the amount of coffee consumed at home. The consumption of coffee outside the home has significantly decreased due to the availability of ready-to-drink coffee. Consumers are embracing out-of-home coffee more frequently now that things are every day. To strengthen their market positions, market participants are integrating new coffee pods, readily available coffee, premiumization, and marketing essential coffee brands into their business operations.

Market Dynamics

Increasing Working Age Population Uplifting the Presence of Coffee Houses Drives the Global Market

Coffee shops have expanded dramatically in recent years as people increasingly use them as gathering places for friends, family, employees, and business partners. The emergence of high-end stores from companies like Coffee Day Enterprises Ltd, Starbucks Corporation, and Barista Coffee Co Ltd, among others, have contributed to the market's expansion. These establishments have added a new experiential component to coffee consumption by cultivating a pleasant and relaxing environment. The demand for these coffee shops and cafes is also rising due to corporate leaders' changing work habits and the services these establishments offer, such as free Wi-Fi and entertainment areas. Coffee consumption is also growing in the European region, especially among urban people. This supports the average growth rate of cafés and bars regarding value sales and transactions.

On the other hand, the US has a mature coffee market, and the nation's expanding working-age population supports market growth. According to statistics, the country's habit of drinking coffee outside the home is increasing, which suggests potential market growth throughout the forecast period. Coffee shops have consequently come to represent urban areas. Thanks to their high consumer traffic and substantial profit margins, they produce a lot of pedestrian activity and lively streetscapes.

Consumer Preference for Premium Coffee Creates Opportunities 

The market for premium coffees has grown significantly as consumption outside the home continues to rise. The pace of offering complex, high-value variety to customers is set by cities in Europe and North America, significantly stimulating market growth. Along with the rising demand for premium coffee, there is also a growing consumer interest in how coffee is brewed and how the crop is grown. It is now essential for producers of specialty coffee to give a brief history of their products, including where they came from and other environmental and social concerns. In recent years, the US has placed an increased emphasis on the premiumization of coffee. Over the past ten years, consumers have become more aware of value-added coffee services at coffee shops as incomes have increased. They brought their newly acquired appreciation for fine coffee into other contexts in the food service and retail industries. Developing compostable coffee capsules using a bio-compostable polymer (PLA) is a reasonable response to the escalating environmental issues. Thus, these innovative, organic, and specialty coffees will help to increase sales of premium coffee and coffee pods within the projected period.

Regional Analysis 

Europe is the most significant revenue contributor and is expected to grow at a CAGR of 2.98% during the forecast period. In Spain, over 50% of customers drink coffee and its variants. According to the Centre for Sociological Investigation (CIS), people like to congregate in parks, markets, pubs, and dining establishments. Spain, which ranks third in the world for the number of cafés and bars after Brazil and Japan, has one of the world's most vibrant café cultures, which increases demand for coffee consumed outside the home. As a result, there are more participants in the market. For instance, Tim Hortons only has 15 high-end coffee shops after entering Spain in late 2017. The business also intends to expand into new markets by launching other cafés.

Furthermore, according to the British Coffee Association, 95 million cups of coffee are consumed daily in the country. 32% of those cups are consumed outside the home, and in 2018, fresh coffee accounted for 77.88% of that consumption, according to the Ministry of Foreign Affairs. In addition, outside-the-home consumption accounts for the majority of UK coffee sales, which is a big reason why specialty coffees are becoming more and more popular. 15% of the coffee eaten outside the home in the UK is specialty-rated. This, together with increasingly prevalent trends toward "on trade" artisan experiences, is encouraging the expansion of independent specialized enterprises.

North America is expected to grow at a CAGR of 2.74% during the forecast period. Despite being the world's largest consumer of coffee and one of the most popular beverages consumed globally, the United States produces very little of the bean. For example, about equal amounts of coffee are produced in Vietnam and Peru and imported into the U.S. Imports of coffee have increased due to rising national consumption. As a result, the US is today the world's second-largest importer of coffee beans. Due to Americans' increasingly busy lifestyles and prolonged working hours, many coffee chains are growing more popular with clients who prefer their coffee on the go. Starbucks was the market leader for single-serve coffee in the US. With 31,256 outlets globally as of 2019, Starbucks has nearly doubled in size over the preceding ten years, dominating the market.

In addition, according to the Coffee Association of Canada (CAC), most Canadians prefer coffee to tea and are more interested in high-quality coffee. The main force behind the country's coffee market is this. As a result, companies are taking the risk to expand strategically by opening cafes in the desired areas. Canadians strongly prefer preparing their coffee over buying it from a store. Most individuals drink coffee at home, but a cup with breakfast is necessary for Canadians every morning. Additionally, the present pandemic significantly impacts coffee sales bought and drunk outside the house, which can temporarily impede market expansion.

Key Highlights

• The global out-of-home coffee market was valued at USD 1.71 billion in 2022. It is projected to reach USD 2.26 billion by 2031, growing at a CAGR of 3.14% during the forecast period (2023-2031). 
• Based on type, the global out-of-home coffee market is bifurcated into roasted coffee, instant/soluble coffee, and portioned coffee. The roasted coffee segment is the highest contributor to the market and is estimated to grow at a CAGR of 3.34% during the forecast period.
• Europe is the most significant revenue contributor and is expected to grow at a CAGR of 2.98% during the forecast period.

Competitive Players

Competitive Players

The global out-of-home coffee market’s major key players are Nestlé SA, JAB Holding Company Sàrl, The JM Smucker Company, Luigi Lavazza SpA, The Kraft Heinz Company, Starbucks Corporation, Keurig Dr. Pepper Inc., Tchibo GmbH, Baronet Coffee, and Blue Tokai Coffee Roasters.

Recent Developments

Market News

• In February 2022, Nestlé SA, the world’s largest packaged-food maker, said its coffee business was the most significant contributor to organic sales growth last year, boosted by demand from consumers continuing to work from home.
• In August 2022, J.M. Smucker Co. used science and technology to push the coffee industry forward. Leveraging analytical capabilities to create new formulations for consumers is a key area of focus for the company’s USD 2.5 billion coffee business.

Segmentation

Global Out-of-Home Coffee Market: Segmentation

By Type

• Roasted Coffee
• Instant/Soluble Coffee
• Portioned Coffee

By Regions

• North America
• Europe
• Asia-Pacific
• LAMEA