Coffee pods remain the fastest growing category in the coffee sector, but market maturity, high prices, intellectual property battles and sustainability concerns have started to cause the category to lose its lustre.
Growth will continue in coffee pods’ core markets, says Matthew Barry*, an analyst at Euromonitor International, but at a more subdued rate than in the recent past, as the gatekeepers to the major pod systems try to fend off a wave of new entrants to the category.
According to Mr Barry, the pods category grew at an average annual rate of 18 per cent in real value terms over 2011-2016. This astounding growth rate was unsustainable, and slowed to single digits in 2016, which is predicted to continue for the foreseeable future.
Consumers in Canada and the US fell in love with the Keurig system and its compatible K-cups during the early years of the review period, but a botched follow-up machine led to both the company and the category in general falling out of favour with consumers.
Market maturity also played a major role in slowing North American growth. Because of this, Western Europe will resume being the central region for global growth, as was the case prior to 2010.■ C&CI Read more
This article first appeared in the November ’17 issue of C&CI, click on subscribe now if you wish to read the full story and other informative articles in the November and future issues of C&CI or log in here if you are already a subscriber.