Coffee Wars Brewing: Instant Coffee Market Shrinks With Increased Competition | Be Korea-savvy

Coffee Wars Brewing: Instant Coffee Market Shrinks With Increased Competition


With consumers facing greater options for cheap and quick coffee, instant coffee brands like Maxim and Nestlé have scrambled in recent years to adapt to the increasingly competitive industry. (Image: Yonhap)

With consumers facing greater options for cheap and quick coffee, instant coffee brands like Maxim and Nestlé have scrambled in recent years to adapt to the increasingly competitive industry. (Image: Yonhap)

SEOUL, Aug. 31 (Korea Bizwire)With consumers facing greater options for cheap and quick coffee, instant coffee brands like Maxim and Nestlé have scrambled in recent years to adapt to the increasingly competitive industry.

A joint report by the Ministry of Agriculture, Food and Rural Affairs and the Korea Agro-Fisheries & Food Trade Corporation published on August 30 highlights the uphill battle that the instant coffee giants face. The research revealed that total revenue from instant coffee products dropped by 6.6 percent in 2016 compared to 2015 (from 1.11 billion won to 944 million won).

For the report, instant coffee was categorized as either being soluble or sold in “stick coffee” form.

The instant coffee market took a year-on leap from 2014 to 2015 (992 million won to 1.11 billion) before the drop in 2016.

Sale revenue continued its fall with 208 million won recorded in the first quarter, a 17.8 percent drop compared to the same period last year.

The decline in fortunes has not left any company untouched, with industry-leading brand Maxim also reporting declining sales.

The report suggests that a growing diversity of canned and “cup coffee” products, not to mention coffee stands providing drinks at 1,000 won per cup, have given consumers more choices and subsequently reduced the core advantages of speed and efficiency inherent to instant coffee products.

The major brands are not going down without a fight, however. Last summer, Maxim released a summer-time only instant coffee mix titled “Kanu Ice Blend Americano”. Created using a technique called “LTMS (Low Temperature Multi Stage) Extraction”, it marketed the product with the slogan “The World’s Coolest Coffee”.

Lotte-Nestlé Korea also put out a limited release of a coffee product called “Nescafe Crema” over the summer, bundling the product with a free coffee tumbler to better appeal to the more active summer crowd.

The market crunch has even coaxed non-coffee makers to push the boundaries of what might be considered stick coffee. Last May, the “Georgia Gotica Expresso Stick”, which contains coffee in liquid rather than powdered form, was launched as Coca-Cola Korea’s first foray into the domestic instant coffee market.

Last May, the "Georgia Gotica Expresso Stick", which contains coffee in liquid rather than powdered form, was launched as the company's first foray into the domestic instant coffee market. (Image: Yonhap)

Last May, the “Georgia Gotica Expresso Stick”, which contains coffee in liquid rather than powdered form, was launched as the company’s first foray into the domestic instant coffee market. (Image: Yonhap)

 S.B.W. (sbw266@koreabizwire.com)

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