South Korea 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 2022 To 2027

South Korea’s instant coffee market is estimated to be valued at US$895.889 million in 2020 and is anticipated to experience a slight decline in market growth during the forecast period.

The affordability of coffee among middle- and lower-income individuals, as well as the significance of South Korean coffee culture. Different types of coffee, such as cold-brewed coffee, and pod coffee have taken their place as an important part of the South Korean coffee culture these days and have led to a rise in popularity among a large number of individuals. This has led to rising demand from the consumers for a good cup of coffee that has a unique aroma, has a better taste and flavor profile, and is easily available in the market. Thus, this is one of the major factors contributing to a small decline in the consumption of instant coffee over the forecast period.

However, the demand for instant coffee exists, due to its consumption, by the lower-income individuals in the population as many brands such as Nestle offer affordable products under their brand Nescafe, among others.  This has led to the further development of the South Korean coffee culture and has caused an increase in the number of speciality and unique café openings. In addition, speciality and unique coffees are proving to be beneficial as they are attracting younger consumers and encouraging them to try different blends and flavours.

Product Offerings by the market players in the South Korean Instant Coffee Market

The offering of better and more advanced varieties of instant coffee with enhanced flavour, and aromas, among others, by existing and new players in the market.

Some of the product offerings have been mentioned below-

• Dongsuh Companies Inc., which is considered among the most famous companies that are involved in different business verticals, offers different types of coffees under its product portfolio, including ready-to-drink and instant coffee variants. It offers its products under the brand Maxim. The products are called the “Maxim Mocha Gold Mild Coffee Mix” and the “Maxim White Gold Coffee Mix”. The former product is a stick-type instant coffee and has a sweet flavour and aroma with a mild taste and the latter product has a deeper and smokier flavour as it is made using the Specialized Profile Roasting Method with only select beans.
• NAMYANG DAIRY PRODUCTS CO., LTD., which is considered one of the influential players in the dairy products business, also offers instant coffee and coffee as a ready–to–drink beverage under its brand Namyang French Cafe. Some of the ready-to-drink products it offers are “Cafe au Lait”, “Cappuccino”, “Hazlenut”, “Mocha Choco” and “Caramel Macchiato”, whereas the instant variant is a powdered variety and is made using nonfat milk as a creamer and is able to deliver a rich aroma with a balanced taste to the consumers.

Key Developments in the Market

• In April 2019, Nestlé Korea debuted its new 'Starbucks at Home' product in Korea, which replicates Starbucks' signature coffee flavor. They first introduced capsule coffee products, which are compatible with Nespresso machines and nescafé Dolce Gusto. 
• In July 2021, Starbucks Coffee Company announced its intentions to sell its whole 50% ownership in its South Korean joint venture to Singapore sovereign wealth fund GIC and local partner E-Mart.

COVID-19 Insights:

COVID-19 had a negative impact on the South Korean instant coffee market. The enforcement of lockdown led to the closure of multiple, institutions, corporations, food outlets, and coffee houses, leading to the decline in the sales in these segments due to lesser foot traffic.

Segmentation

• By Type
  • Freeze-Dried Instant Coffee
  • Spray-Dried Instant Coffee
  • Others
• By Distribution Channel
  • Offline
    • Foodservices
    • Retail
      • Supermarket/Hypermarket
      • Convenience Stores
      • Others
  • Online
•  By Province
  • Seoul
  • Busan
  • Incheon
  • Others