Dallas, TX -- (SBWIRE) -- 05/01/2012 -- In 2011 hot drinks achieved a good performance, with growth of 15% in off-trade value terms, which was faster than the CAGR of 12% experienced during the 2011-2016 review period. Coffee accounted for the majority of retail volume and value sales. Key factors such as marketing campaigns promoted by the ABIC trade association in conjunction with manufacturers; the increase in penetration amongst younger consumers (15-36 years); and rising disposable incomes amongst emergent socioeconomic classes contributed to the continuous growth in coffee consumption.
More consolidation is seen through acquisitions
Hot drinks is experiencing consolidation, with the large players acquiring small producers to gain a regional presence, mainly in coffee and tea. Sara Lee Cafés do Brasil acquired Café Damasco in 2010 and Café Palheta in 2011, whilst 3 Corações (Strauss Group) acquired Café Fino Grão in 2011. The Brazilian company Indústrias Alimentícias Maratá acquired the Castellari brand from Mars; this is a traditional brand in hot tea, and was a good way to increase its market share in the South and Southeast regions, and to boost the distribution network for its coffee products.
The leading players increase their shares
The hot drinks market is extremely fragmented, but the top five players were able to increase their combined retail value share from 49% in 2007 to 57% in 2011. The acquisition of local players, the launch of products and packaging according to regional preferences, and widening distribution to other states were key factors in strengthening the positions of the leading players.
Off-trade channel leads sales of hot drinks
Despite the fact that the off-trade channel led sales of hot drinks in 2011 with a share of 77% in volume terms, the on-trade channel increased its volume share from 20% in 2007 to 23% in 2011. As the purchasing power of the population increased, new habits, such as having a cup of coffee on-the-go, started to develop. With the rising number of coffee shops, manufacturers are investing in the foodservice channel as a means to increase volume sales and awareness of their brands.
A positive outlook is expected during the forecast period 2011-2016
Hot drinks is expected to see a positive performance over the 2011-2016 forecast period, reaching overall growth of 20% and 32% in off-trade volume and off-trade constant value terms respectively. Leading companies, in particular Sara Lee Cafés do Brasil, Nestlé Brasil, 3 Corações, Melitta do Brasil Indústria e Comércio and PepsiCo do Brasil, have already announced that Brazil is a strategic country within their global plans for the future, and they intend to increase their investments in the coming years in order to expand factories, to introduce new products and packaging and to improve their distribution networks.
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