The New Coffee Trends in Brazil are favoring the modern coffee pod industry. How will this affect the market in the next years? Read on.
Fresh ground Brazilian coffee pods continued to be the most dynamic category within coffee in 2015, with the international market registering a 35% increase in retail volume mass reaching over 7k tons in weight.
Despite the challenging economic environment and shrinking disposable incomes, consumers continued to be interested in purchasing these products that provide a perception of symbolic status.
As companies of coffee pod machines, such as 3 Corações with the Tres brand, and also Nestlé Brasil with Dolce Gusto and Nespresso, proceeded to invest in dynamic campaigns and discounts to market their machines, the perception of affordability around these options increased their sales.
Nestlé Brasil, for instance, launched a special Christmas campaign by which buyers could purchase a certain number of pod boxes and get a discount to the same value of one of their coffee makers.
With a 21% share of the market, 3 Corações remained leading the coffee scene in 2015. The group was capable of consolidating its position within freshly ground coffee pods, by competing with its label, Tres, against major brands such as Dolce Gusto and Nespresso.
By the middle of 2015, the company released its Versa coffee machine, and by the end of the year a new model named Mimo.
The expanding portfolio of brands occupying different price bands made consumers more capable of purchasing these modern coffee machines. Furthermore, these same buyers can also afford the compatible Java pods.
Increasing efforts in marketing communications, launching different promotional campaigns, also contributed to a growing brand and loyalty awareness, even within a challenging economic environment, with some consumers downgrading to less expensive labels.
Experts expected Brazilian coffee to follow a Compound Annual Rate Growth (CARG) of 6% over 2015’s average prices for the following periods, reaching over $6.8 billion in 2020.
In retail volume terms, sales are set to grow at a CAGR of 3% over the same period, reaching over 800k tons in the same year.
The retail volume increase is expected to be greater than was registered throughout the reviewed period, while in food service, volume growth is set to be lower due to an expected continuation of the challenging economic environment.