Colombia instant coffee market is estimated to grow at a CAGR of 8.77% during the forecast period. Colombia is the third-largest producer and exporter of coffee globally, behind Brazil and Vietnam. As per the USDA statistics, the coffee production in Colombia accounted for 14.3 million 60 kg bags GBE, i.e. green bean equivalent in MY 2019/2020. It is expected that the production will recover to more than 14 million bags GBE due to the low intensity El Nino weather phenomena that have increased the flowering period in the major producing regions of Colombia. This is because of the fact that good flowering helps in the determination of the harvest size. The country’s domestic consumption is accounted to attain a market size of 1.8 million 60 kg bags GBE in MY 2019/2020. This achieved a growth of 5.8% in comparison to the previous year.
Additionally, in order to support the rising domestic demand coupled with a decrease in production in MY 2017/2018, the country imported around 770,000 60 kg bags GBE. The imports were mainly from the regions of Peru, Honduras, Ecuador, and Brazil. In order to satiate the local demand, the imports are projected to rise to more than 400,000 60 kg bags GBE in MY 2019/2020. This is because of the decline in inventories, and export recovery.
The market for instant coffee is projected to surge in the forecast period owing to the prevalent coffee culture of the country, where coffee is the most common beverage consumed. Also, coffee consumption is evolving at a fast pace due to several factors influencing the consumption in the country. This includes socio-economic changes, concerns regarding health and sustainability, and the need for more sophisticated commodities. Coffee consumers demand high-quality soluble coffee, also, coffee providing significant health benefits like containing high-level of antioxidants is gaining traction and is further contributing to the rising popularity of coffee in the form of a regular beverage in Colombia. Furthermore, consumers nowadays prefer environment-friendly and sustainable products, hence, it is expected that Colombian coffee brands follow good manufacturing practices that are in line with the eco-friendly manufacturing practices.
Furthermore, the coffee consumption in Colombia is rising at a fast pace due to the growing number of coffee shops and development of new coffee products in order to satiate the accelerating demand of the young professionals and international visitors, further creating strong prospects for the market to thrive in the forecast period. Juan Valdez and OMA are the major coffee stores located in the region. Other coffee stores include McCafe, Illy, Segafredo, and Starbucks. However, in the current novel coronavirus scenario, the market is projected to experience a decline with the shutting down of coffee shops, hotels, and restaurants, thus, impacting market growth negatively in 2020 owing to lockdown measures. Post-lockdown, the market is set to grow at a sustainable pace following the new norms which include taking care of workplace safety and practicing social distancing.
Significant strategies adopted by the coffee stores offering coffee and bakery products at a lower price than their competitors will continue to thrive the market demand due to the fact that this will allow the increase in customer footprint demanding for coffee at cheap rates. For example, Café Tostao has grown in the last years with the establishment of more than 400 small coffee shops in Bogota, Cali, and Medellin providing coffee and pastries at a lower price, this strategy helped the store to become the second largest regarding coffee sales in Colombia after Juan Valdez.