Malaysia Instant Coffee Market Size, Share, COVID-19 Impact, Opportunities, And Trends By Type (Freeze-Dried Instant Coffee, Spray-Dried Instant Coffee, Others), By Distribution Channel (Offline (Foodservice, Retail (Supermarket/Hypermarket, Convenience Stores, Others)), Online), And By Province - Forecasts From 2024 To 2029

Malaysia instant coffee market is estimated to grow at a CAGR of 6.97% to reach US$835.854 million in 2029 from US$521.649 million in 2022.

The demand for instant coffee is increasing owing to the rising working-class population in Malaysia coupled with the increasing disposable income of younger professionals. Seeing the time crunch, various companies are launching products that can be prepared in less time. Additionally, instant coffee is used for various purposes such as improving energy levels, increasing microbiome diversity, and providing essential nutrients. Additionally, the benefits of the ease of making this coffee at home, in the office, or on the go among millennials and Generation Z are aiding the market growth of instant coffee in the country.

Increasing demand among young professionals

The variety of coffee options available to people on the go and the presence of a wide range of distribution channels for coffee in the country is supporting market growth. Additionally, people who are working or studying sometimes tend to get addicted to coffee and require coffee to stay awake while working. Due to the hectic work culture, the penetration of instant coffee products is expected to increase in offices, hospitals, and colleges. Moreover, the production of robusta coffee is increasing in the country. For instance, according to the United States Department of Agriculture (USDA), the production of robusta coffee was 1,900 thousand 60-kilogram bags in 2019/20 which increased to 2,000 thousand 60-kilogram bags in 2021/22. Such increasing production is expected to support the market for instant coffee in the projected period.

As per the data by the World Bank, people engaged in the labor force in Malaysia has increased year by year. The growth registered in the working class was 4% from the year 2020 to 2022, and this number is anticipated to increase in the coming year. In 2020 the number of people engaged in the labour force was 1,66,26,593 which increased to 1,69,15,825, and in 2022 the total number was 1,73,09,921. The ease of making coffee instantly in the office and carrying one’s preferred coffee to any place is one of the main reasons for this market growth. Not only at offices but also at home people prefer instant coffee as only hot water is needed to prepare this coffee. Moreover, the increasing culture of cafes and fast-food chains in Malaysia is also anticipated to propel its rising demand.

The Malaysia instant coffee market through online channels is projected to grow steadily.

 The market has experienced a notable surge in growth, particularly within the online segment, driven by the evolution of distribution channels in response to changing consumer behaviours and technological advancements. The catalyst for this growth can be traced to the increasing prevalence of internet access and the widespread adoption of digital platforms among Malaysian consumers. As more individuals gain connectivity through smartphones and other devices, the online channel becomes a convenient and accessible avenue for purchasing instant coffee products.

E-commerce platforms have emerged as pivotal players in shaping the online distribution landscape for instant coffee in Malaysia. Notable platforms such as Lazada, Shopee, and Zalora have become popular hubs for consumers seeking a diverse range of instant coffee brands and variants. These platforms provide a user-friendly interface, secure payment options, and efficient delivery services, enhancing the overall online shopping experience for consumers. The ability to peruse a wide array of products, compare prices, and access reviews contributes significantly to the appeal of online channels. Furthermore, according to the International Trade Administration, Malaysia stands out as a compelling market for eCommerce in Southeast Asia, thanks to its vibrant economy and well-established digital infrastructure. In the year 2021, a substantial 80 percent of Malaysia's population, equivalent to 27.4 million individuals, actively engaged with the Internet. Additionally, the country boasted a high mobile phone penetration rate of 84.2 per cent. The digital landscape was further enriched by the presence of 28 million social media users and a significant 39.99 million mobile connections as of January 2021. These statistics underscore Malaysia's robust online presence and its potential for continued growth in the eCommerce sector.

In addition to traditional e-commerce platforms, subscription models have gained prominence in the online distribution of instant coffee. Subscription services offer consumers the convenience of regular deliveries, often at discounted rates, fostering customer loyalty and encouraging repeat purchases. This innovative approach aligns with changing consumer expectations, providing a seamless and personalized experience for instant coffee enthusiasts.

Market Key Developments

• In February 2020, Nestle announced the global launch of Starbucks' premium instant (soluble) coffee. This new range consists of medium roast and dark roast coffees, as well as a variety of tea latte and coffee beverage ranges. This range is available in various countries including Malaysia.
• In December 2021, WONDA Coffee introduced its inaugural Instant Coffee series in Malaysia, marking a strategic move to diversify its product offerings for the Malaysian consumer base. Encouraged by the positive reception of WONDA Coffee's Ready-to-Drink (RTD) range in the market, the company is emboldened to extend its brand presence into the hot coffee segment.

Malaysia Instant Coffee Market Scope:

Segmentation:

• By Type
  • Freeze-Dried Instant Coffee
  • Spray-Dried Instant Coffee
  • Others
• By Distribution Channel
  • Offline
    • Foodservices
    • Retail
      • Supermarket/Hypermarket
      • Convenice Stores
      • Others
  • Online
• By Province
  • Kuala Lumpur
  • Penang
  • Ipoh
  • Others