Philippines instant coffee market is projected to grow at a CAGR of 11.22% during the forecast period while 217,908.700 tons of instant coffee is estimated to be consumed in 2019. As per the study conducted by the Washington-based Duke Center for Global value Chains in 2017, the popularity of coffee increased among the younger generation of the Philippines who prefer to drink convenient instant coffee. The growing popularity is further attributed to the growth in the economy, further contributing to the growth in disposable income of the consumers. Hence, this is providing strong prospects for the market to proliferate during the forecast period.
In spite of the fact that coffee production and exports in the Philippines are low, the country is still an important coffee market. It was a pioneer as an instant coffee importer in 2011 and is predicted to become one of the largest consumers of instant coffee at the global level by the end of 2021. The strong demand for instant coffee has further raised the opportunity for many businesses in retail. The policymakers are engaged with stakeholders in order to help domestic producers to take advantage of both the local and international markets and facilitate the economic upgradation. Hence, to gain traction from abroad, it becomes necessary to improve the coffee quality of the Philippines through the process and product upgradation. Additionally, the strong local demand has further led to encourage the government to strengthen the coffee sector in the country.
Furthermore, the coffee retail brands like Starbucks, the Coffee Bean & Tea Leaf, and UCC have set their bases throughout the country, this is further providing an impetus for the market to thrive in the forecast period. Additionally, with the emergence of small and independent coffee shops in the Philippines, the market is poised to grow at a significant pace along with rising coffee demand over the next five years.
The present novel coronavirus pandemic scenario is predicted to decrease the market growth owing to the shut-down of coffee shops in addition to the other public gathering areas. Significant initiatives are made to avoid the transmission of viral infections, these include lockdown and work-from-home initiatives, further giving rise to cause a negative impact on the sales of instant coffee, particularly in hotels, restaurants, and coffee houses.
The presence of big companies like Nestle is contributing to surging the market growth offering a wide range of soluble coffee products in order to satiate the coffee needs of the Filipinos. Through its Nescafe brand the company is providing different product variants, these include, Nescafe Classic, Nescafe Classic Decaf, Nescafe Classic Strong, Nescafe Gold Blend, Nescafe Gold Cappuccino, NESCAFÉ® Blend & Brew™ Original, NESCAFÉ® Blend & Brew™ Strong, and many more. One of its products, Nescafe Classic is available in 2 grams, 25 grams, 50 grams, 100 grams, and 200 grams. It is made from Robusta coffee beans. The company works with local coffee producers in different coffee growing regions. In addition, it provides education to the farmers and helps in the establishment of sustainable farming practices in accordance with the Nescafe Plan. The company is the biggest buyer of Robusta beans in the Philippines.