Drip Bag Coffee Market

Market Overview

The global drip bag coffee market size was valued at USD 2,199.41 million in 2021. It is predicted to reach an estimated value of USD 3889.74 million by 2030, registering a CAGR of 6.54% during the forecast period (2022-2030). 

Drip bag coffee has become one of the standard styles for coffee brewing. Its pour-over brewing method makes it super easy for instant coffee making without a coffee maker. The producers have come up with black, latte, and mocha segments in the market, which is expected to have immense potential, growing with a CAGR of 6.54% during the forecast period. 

In 2019, the black coffee segment accounted for more than half the revenue share of about 51.2%, while latte and mocha coffee segments held a revenue share of 35.4% and 13.4%, respectively. The drip bag coffee market is on the cusp of overtaking most of the instant coffee makers. Consumer awareness regarding the environment has given special impetus to sustainable packaging. Drip bag coffee producers have resorted to green packaging and plant-based plastic, a key factor in the rise in demand. Health and wellbeing is also a significant factor, which is now the buzz word for Millenials and Gen Z.

Market Dynamics

Changing Consumer Behavior and Improving Disposable Income

Consumer behavior is continuously changing in terms of taste and preferences. A large number of individuals are shifting from aerated drinks to coffee, and this change in consumer preference has a positive influence on the growth of the coffee industry. Additionally, rising awareness about the health benefits associated with the consumption of these drinks, especially black coffee, is further boosting its consumption among health-conscious consumers.

Economic growth also plays a crucial role in coffee consumption patterns. The rising consumer income has a significant impact on the coffee consumption patterns, especially across the Asia-Pacific and Eastern Europe, where coffee is often considered less important than tea and deemed as a non-essential product by consumers. Whereas, product premiumization is of utmost importance in economies with high per-capita disposable income where volumes are harder to grow, particularly in Western Europe and North America.

Rise in Coffee Consumption among the Working Class

Coffee consumption plays an integral role in the day-to-day life of a working individual. The purpose of coffee consumption varies from individual to individual, some of which include — to feel more alert, feel less tired, and socialize with colleagues in the workplace. In light of the fact, the consumption of coffee is further associated with improving productivity. Thus, today's working-class has turned dependent on coffee in order to perform at their best in multiple facets of their hectic lives. On the other hand, as the female workforce and the number of dual nuclear families are increasing, the demand for coffee across the commercial sector is further anticipated to increase

Changing Climatic Conditions Hamper the Yield and Result in Volatile Raw Material Prices

Changing weather conditions and worsening droughts on account of rising temperatures, minimum rainfall, and the lack of adequate irrigation systems have affected the coffee plantations across various regions, particularly Brazil, which is also one of the largest producers of coffee. This has led to the predicted degradation of the coffee plants, as the plants are yellow and damaged, and the beans are ruined.

Thus, a large number of farmers engaged in the coffee plantation business have lost the majority of their crops and suffered losses. Due to which, they are now willing to shift their crop focus from coffee to other crops as coffee plantation requires a significant amount of water. Prominent exporters of coffee are witnessing the fall in the production capacity; thereby, resulting in the disruption of the demand and the supply chain across the globe market. Hence, leading to volatile raw material prices.

Regional Analysis

Europe: Largest Consumer and Importer of Coffee 

Europe is the largest importer of coffee in the world due to the minimum coffee production and significantly high consumption in the regional market. This demand for coffee in the regional market has been partly driven by the continuous growth of out-of-home consumption. The increased variety of new products in the coffee market, such as ready-to-drink and instant coffee, are attracting the younger generation to coffee as a beverage. Additionally, the region has one of the highest per capita coffee consumption, which is attributed to the presence of inhabitants marked by higher income levels and consumer awareness, along with a more developed coffee culture than the rest of the world.

The U.S. to Spearhead North America's Drip Bag Coffee Market

North America's drip bag coffee market is projected to reach a value of USD 604.9 million by 2025, with a CAGR of 6.7%. In light of the rising concern regarding health and fitness and hectic work lifestyle, shifting consumer preference toward convenience and nutrition-enabled products has been witnessed. The populace is switching from aerated drinks to the consumption of coffee. This trend is primarily observed across the working class individuals that are consuming these beverages regularly in an effort to boost their metabolism, enhance brain function, and improve liver health.

The regional market is led by the U.S., which is also the second-largest importer of coffee, following the European Union. Although the conventional coffee market in the country is mostly stagnant, some progress in the U.S. coffee consumption patterns is predominantly driven by the growth of differentiated coffees, which are attracting new consumers. Additionally, the high consumer spending in the region further allows the individuals to spend more on premium coffee products, which is another factor that is expected to influence the growth of the drip bag coffee market. For instance, as per the National Coffee Association, around 51% of past day coffee drinkers in the U.S. consumed gourmet coffee.

Segmental Analysis

Plethora of Benefits of Black Coffee to Drive Its Consumption among the New-Age Consumers

The black coffee segment is projected to reach a value of USD 1389.9 million by 2025, with a CAGR of 5.77%. Shifting consumer trend towards lighter roast coffee and non-dairy milk variations over the last couple of years drives the segment growth. Black coffee has become one of the popular alternatives to normal dairy milk in terms of nutritional benefits. Additionally, consumption of black coffee has a plethora of benefits as it helps in boosting memory, improving performance during a workout, cleanses the stomach, decreases diabetes risk, and aids in reducing weight, owing to which it has become popular among the new-age consumers.

Mocha Coffee Segment to Grow Considerably during the Forecast Period

The mocha segment is projected to grow from 359 million units in 2019 to 492.2 million units by 2025 in terms of volume. Mocha, also known as Caffe Mocha or Mochaccino, is a delight for chocolate lovers. Mocha is a variant of the latte that combines espresso with hot milk and chocolate flavor. The espresso to milk ratio of a mocha is about the same as a latte, along with an addition of white, milk, or dark chocolate to the drink. Mocha is less caffeinated and is popular among teenagers and kids.