The Vietnam Instant Coffee market is projected to witness a compound annual growth rate of 11.91% to grow to US$646.252 million by 2026, from US$293.939 million in 2019. Vietnam is the second-largest producer of coffee in the world market, thereby making it an important point of trade in the market. The growing population of the country with a population nearing 98 million in 2020 (Source: World Bank) along with the influence of French colonialism is a key driver behind the growth of the instant coffee market in Vietnam. It also imports small quantities of coffee beans, both green and roasted, and instant coffee from Laos, Indonesia, Brazil, and the United States to serve its growing high-end coffee retail chains. Moreover, the presence of international food chains and retail stores like Starbucks are furthering the instant coffee market in the country.
Changing the lifestyle of the population in the country is driving demand for Vietnam Instant Coffee.
The country depends largely on its agricultural sector with recent shifts to the secondary and tertiary factors of the economy. Rapid digitization has also furthered the development of the country. Cumulatively, these factors have led to an adoption of a fast pace of life in the country and these changing lifestyle has expanded the instant coffee market in recent times.
The coffee culture of Vietnam is steeped in history when the French brought coffee to Vietnam in the 19th century, and after the Vietnam War, the government instituted a massive coffee production program. As people are advancing, there has been a shift to instant coffee powders like Nestle, Trung Nguyen, etc.
The establishment of local and international coffee chains in the urban areas of the country is thronged by busy workers, students, and tourists. This increasing demand is fueling the market ahead.
However, in July, retail sales fell by 19.8 percent year-over-year (y/y), the largest drop since April 2020, while the Purchasing Managers’ Index also declined significantly in Vietnam due to the onfall of the Covid-19 pandemic (Source: World Bank). The instant coffee market witnessed marginal effects from these contractions. The consumption level saw a rise during the pandemic but the production sector observed a downfall.
The local coffee chains plying in the country like Highland Coffee, The Coffee House, Phuc Long Coffee, and Tea to name a few have further accentuated the demand for instant coffee in the market. They are in stiff competition with the international players but in many instances have outnumbered their presence. The growth of the café culture is another propeller of the market. Overall, the instant coffee market has exuberant opportunities in the country with strong growth factors furthering the market.
The Vietnam instant coffee market had been growing at a healthy pace before the outbreak of the COVID-19 pandemic. However, the pandemic led to supply chain restrictions due to lockdowns and strict COVID-19 guidelines in the country. The pandemic made the production and harvesting activities difficult while the prolonged shortage of empty containers and rising freight prices reduced the production and harvest. Furthermore, the instant coffee market in Vietnam witnessed a decreased demand from consumers. As the work-from-home policy was implemented by most of the companies, the large amounts of instant coffee consumed by corporate employees witnessed a drop. Also, as the gathering of people was restricted to curb the spread of coronavirus, instant coffee consumption declined with a halt in social gatherings.
|Market size value in 2019||US$293.939 million|
|Market size value in 2026||US$646.252 million|
|Growth Rate||CAGR of 11.91% from 2019 to 2026|
|Forecast Unit (Value)||USD Million|
|Segments covered||Type, Distribution Channel, And Province|
|Companies covered||Nestle, Tata Coffee Vietnam Company Limited, Trung Nguyen, Vinacafé Bien Hoa JSC|
|Customization scope||Free report customization with purchase|
Key Market Segments
Tata Coffee Vietnam Company Limited
Vinacafé Bien Hoa JSC
All our studies come with 2 months of analyst support.
We are in compliance with the global privacy laws.