Millennials, often blamed for killing products, expected to boost key drink market: Study
China, India, and Brazil are key countries in the instant coffee market
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The popularity of pumpkin spice has exploded in recent years, especially as an ingredient in coffee. And now, it's in foods like donuts, muffins and goldfish crackers.
The global instant coffee market is expected to surge thanks to millennial consumers, a market research firm says.
Research and Markets predicts the market will grow at a compound annual growth rate (CAGR) of 5.11% in terms of value and 2.88% in terms of volume. The firm projects that the market will reach a total value of $35.97 billion and a volume of 1.91 million tonnes by the end of FY 2023.
Instant coffee, which is brewed coffee with water taken out, is usually less expensive than Arabica coffee beans, which is a very popular coffee variety.
Asia Pacific, North America, Europe, Latin America, the Middle East and Africa are the market's six main regions, the study says. Asia Pacific has the largest market share due to the fast-growing economies of China and India.
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Maxwell House instant coffee sits on display in a supermarket in New York, U.S., on Monday, Aug. 3, 2009 (Daniel Acker/Bloomberg via Getty Images / Getty Images)
The study cites rising Internet usage and an increase in popularity among millennials as main reasons for the projected growth. Increase in disposable incomes in China, India, and Brazil was also cited as beneficial to the market.
However, the study lists fluctuations in raw material pricing and the threat of substitutes as challenges to the market.
Colombia, Cartagena: La Matuna, Exito Mercado, Nescafe instant coffee brands. (Jeffrey Greenberg/Universal Images Group via Getty Images / Getty Images)
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"The coffee industry faces competition from various substitutes, including tea, which poses a significant threat," the study reasoned. "Tea is preferred over coffee in many regions worldwide."
"Additionally, other beverages like soft drinks, energy drinks, green tea, and iced tea are gaining popularity, challenging the global instant coffee market," the research firm added.
Nescafe Gold instant coffee seen at a store in Germany. (Igor Golovniov/SOPA Images/LightRocket via Getty Images / Getty Images)
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The key companies that were studied included Starbucks Corporation, Unilever Plc, and Nestle S.A.