Instant coffee to boost South Korea’s hot drinks market

It is projected to be valued at $5b in 2026.

Instant coffee is expected to boost South Korea’s hot drinks market as it is seen to grow at a compound annual growth rate (CAGR) of 6.7%, GlobalData reported. 

Aside from coffee, hot tea is also gaining ground as the pandemic pushed consumers to become more health conscious. This was also driven by endorsements of celebrities. 

“With most COVID-19 restrictions being lifted, South Koreans are flocking to their favorite cafes and restaurants to savor made-to-order hot drinks. As consumers return to their pre-pandemic lifestyle, they are sipping instant coffee to power them through their daily grind,” Anush Shaw, Consumer Analyst at GlobalData, said.

“However, the heightened health consciousness amid COVID-19 is accelerating the shift from sugary coffee mixes to decaffeinated coffee. The growing inclination for immunity-boosting beverages is spurring the demand for green teas. However, young consumers are opting for herbal/fruit teas that are sweet on the palate.”

Read more: South Korea’s retail sales grow by 9.7% in July

According to its South Korea Hot drinks – Market Assessment and Forecast to 2026 report, GlobalData found the hot drinks market is expected to grow 4.7% to $5b in 2026 from $3.5b in 2021. 

In particular, the hot tea category is expected to grow at an average rate of 7.5% between 2021 and 2026; whilst other hot drinks have a projected CAGR of 5.5%. 

“Baristas are striving to deliver an authentic consumption experience that sets them apart from the plethora of coffeehouses that have mushroomed in top cities over the past decade. Multinational players are also adopting a premium play with diverse options for customization inspired by the local culture and preferences,” Shaw said.

“Similarly, manufacturers and retailers are rolling out specialty coffee and novelty tea blends to tap the premiumization wave. Functional teas that aid in weight loss, skin health, digestive wellness, detoxification will surge in demand and help the market players expand their consumer base.”