Asia-Pacific Coffee Pod and Capsule Market Poised to Grow at a CAGR of 10.3% Over the Forecast Period of 2022-2027

Asia-Pacific Coffee Pod and Capsule Market
Rising Preference to Adopt Non-alcoholic Beverages Has Allowed the Growth of the Asia-pacific Coffee Pod and Capsule Market.

Asia-Pacific Coffee Pod and Capsule Market Overview

The Asia-Pacific Coffee Pod and Capsule Market size is estimated to reach $6.7 billion by 2027 and is poised to grow at a CAGR of 10.3% over the forecast period of 2022-2027. Coffee has been the most important beverage, now being excessively consumed across the globe, especially in the budding regions across Asia-Pacific. The coffee capsules are mostly plastic containers containing coffee powder. However, capsules are marketed in two forms, such as open or closed systems. The former system is generally compatible with the machine. And the latter, closed-based system are the available Nespresso Coffee capsules. The coffee pod on the other hand closely resembles the teabags; however, they are round in shape. The coffee pods use low pressure, and the brewed drink tastes better than other variants. Instant coffee which is now available in the market uses the following techniques to alter the taste and matches and catches the essence of coffee beans. The overall quality and efficiency in terms of tastes, along with the rising millennial preferences to try something new in terms of beverages, have acted as the key driver for the Asia-Pacific Coffee Pod and Capsule Industry in the projected period of 2022-2027.

Asia-Pacific Coffee Pod and Capsule Market Segmentation Analysis- By Material Type

The Asia-Pacific coffee pod and capsules market based on the material type can be further segmented into plastic, aluminum, and others. Plastic held a dominant market share in the year 2021. It is owing to the cost advantage it offers over the other forms. Moreover, plastic usage has not been able to be completely waned off from the following regions, even after repeated efforts. Lastly, the product costs can be severely bought down by using plastic cups instead of other probable ways.

However, the Aluminium segment is estimated to be the fastest-growing, with a CAGR of 10.9% over the forecast period of 2022-2027. It is owing to the recent commitments made for sustainable energy usage. Additionally, the giants are now adopting their strategies by blending their product portfolios to be more weighted towards sustainably occupied goods. For example, Nespressoโ€™s green initiative focuses on making cups with the use of aluminum by up to 80%. Additionally, companies offering such coffee variants are following sustainable packaging, which further improves their brand image.

Asia-Pacific Coffee Pod and Capsule Market Segmentation Analysis- By Distribution Channel

The Asia-Pacific coffee pod and capsules market based on distribution channels can be further segmented into online and offline. The offline segment held a dominant market share in the year 2021. It is owing to the requirement of machines which are used to extract and make coffee from the variant it is occupied from. Such machines are expensive, and hence people prefer to have them in various baristas and other coffee houses. Additionally, the likes of Starbucks have now allowed selling their merchandise and other products while serving in their location. The following strategies make the people aware of the raw material while also helping them adapt to such new variants.

However, the online segment is estimated to be the fastest-growing, with a CAGR of 11.2% over the forecast period of 2022-2027. It is owing to the rationality, which now dwells the Asians to follow the western lifestyle and habits. For example, around 50% of Americans own an espresso machine, while around 33% of Britishers own the said machine. The following trends will soon start to reflect in the Asian community, which in turn will allow for the sale via online channels. Additionally, consumers are able to encash the best deals as well. For example, Nespresso Starbucks Capsules is available for INR 3999 online; however, the same would be available in an offline store at an MRP of around INR 7000. Hence, the benefits of cost differentials can be reaped by using the online modes.

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Asia-Pacific Coffee Pod and Capsule Market Segmentation Analysis- By Country

The Asia-Pacific market based on the country can be further segmented into China, Japan, South Korea, India, Taiwan, Malaysia, Australia and New Zealand, and the Rest of Asia-Pacific. Japan held the largest market share in the year 2021. It is owing to the tailored made drinks, which are kept as per the occasion and wants of the consumer. Moreover, giants such as Starbucks follow a similar strategy which allows them to create a strong bond link with the consumers. Moreover, the region has a huge proportion of the working population, which further allows the sale of coffee, and especially through the variants of pods and capsules.

However, India is estimated to be the fastest growing with a CAGR of 11.1% and often lucrative growth opportunities to marketers. For example, majority of the giants are forming conglomerates, and more so the government of India is now readily allowing the FDI inflow which further allows the market to space proactively. Lastly, the working population and the millennial group consolidation has further allowed for the acceptance of

Asia-Pacific Coffee Pod and Capsule Market Drivers

The rising preference to adopt non-alcoholic beverages has allowed the growth of the market

Non-Alcoholic beverages, which can be made in an instant, have allowed for growth in the coffee segment, especially in the pods and capsules. Both the formats offer unique advantages, such as better infused taste and long-lasting freshness. Moreover, coffee has been readily associated and now substituted with tea in predominantly Asian countries as coffee offers various medicinal benefits, which reduces the rate of heart failures and also provides the millennials a fresh start to the day. Urbanization and trendsetting in various settings have allowed the market to grow. For example, as per an Industry Veteran, the adoption of coffee is based on digital literacy and high internet usage. The algorithms attached to such sites work their way forward and pop right in front of one. Moreover, it has been seen that AI is more active than any other tech, as a word said or typed in a phone would alter our screen advertisements. Hence, the active number of internet users will continue to aid the growth of the market. For example, around 900 million active internet users could be found in India by the year 2025.

The millennial preferences to adapt to new trends and flavors would allow the market to grow

Millennials have a knack for trying varied tastes when it comes to beverages. As per a survey conducted, it was found that nearly four in every five millennials or a Gen-Z person would opt to try for a new flavor when it comes to the beverage. Hence, marketers are introducing various blends within the coffee. For example, a brand like Country Beans tries to mend various flavors, which enhances its brand value. Certain notable examples across the offerings include, Hazelnut brewed coffee or chocolate mint. Certain taste addition alters the brand value and makes the customer associate themselves with the brand more. Hence, product innovations and brand associations with the upcoming youth will allow the market to grow multifold in the projected period.

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Asia-Pacific Coffee Pod and Capsule Market Challenges

The cost differentiation amongst the pod or capsule variant in comparison to the instant coffee has dampened the growth of market

In the Asia-Pacific regions, cost plays a pivotal role, especially when it comes to monthly purchases of staple goods. Hence, consumers in the following region are considered disloyal, as they have the tendency to shift to a different brand, which in turn provides them the same offering that too at a low cost. For example, a BRU instant coffee merely costs INR 350 for 250 grams. However, a Nespresso Capsule Festive Pack can cost as high as INR 9500. In countries such as India, in which 90% population earns around 15,000 a month, purchasing a coffee worth INR 9500 remains out of the equation. Hence, brands need to alter their product offerings and customize them as per the regionโ€™s income.

Asia-Pacific Coffee Pod and Capsule Market Competitive Landscape

Product launches, mergers and acquisitions, joint ventures, and geographical expansions are key strategies adopted by players in the Asia-Pacific Coffee Pod and Capsule Market. The top 10 Asia-Pacific Coffee Pod and Capsule Market companies include:

Nestle SA

JAB Holding Company

The Kraft Heinz Company

Inspire Brands

Luigi Lavazza

Starbucks Corporations

Gloria Jean Coffees

Strauss Group

Urban Brew

Fresh Brew

Recent Developments

In October 2021, Cometeer scored a funding round of around $35 million, which makes their total reach $100 million. Moreover, the companyโ€™s funding will now allow them to explore demographics outside the west, such as in Japan and Korea. The company focuses on the manufacture, sale, and cold-shipment of single-serve frozen specialty coffee capsules designed to match peak quality with user convenience.

In September 2021, KIMYA allowed the start-up known as CAPS-ME to undertake and print sustainably viable coffee capsules. The capsule features a six-part 3D printed mechanism which automatically refills the pouch once used. Moreover, the partnership will now allow the venture to scale up its production capacity without hindering the product quality. Moreover, manual loading can take a lot of time, and with using 3D printing technology, a capsule can be used up to 1000 times.

In May 2020, Nespresso launched new capsules made of aluminum which are 80% recycled. The company plans to adapt to the upcoming climate change accords in the best possible way. Additionally, it will reduce waste and maximize the reuse of product materials. By the end of 2021, Nespresso aims to have the full Original Line and Vertuo ranges of coffee capsules made using recycled aluminum.

Key Takeaways

The emancipation of consumers towards wanting and accepting freshly brewed coffee within the premises or outside the premises has acted as one of the key drivers for the market.

The high costs associated with the capsules and pods in comparison with instant coffee have dampened the market penetration.

A detailed analysis of the strengths, weaknesses, opportunities, and threats will be provided in the Asia-Pacific Coffee Pod and Capsule Industry Report.

Relevant Titles:

Commercial Coffee Brewer Market

https://www.industryarc.com/Report/19054/commercial-coffee-brewer-market

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