Caffeinated Convenience: The Rise of Ready-to-Drink Coffee in the Asia Pacific

The Asia-Pacific region has emerged as a powerhouse in the global coffee market, with consumers embracing coffee culture like never before. In 2023, the region's coffee consumption reached an impressive 35 million 60-kilogram bags, driven by countries such as Japan, China, South Korea, and Australia. Japan leads with an annual consumption of about 7.5 million bags, reflecting its long-standing love for coffee.

Meanwhile, China's coffee scene is booming, with over 125,000 coffee shops operating across the country, signaling a shift in preferences among its youthful population. The surge in coffee consumption is fueled by rapid urbanization, a growing middle class with increased disposable income, and the Westernization of lifestyles that value the social and aspirational aspects of coffee drinking.

The economic structure of the Asia Pacific ready to drink coffee ecosystem is still evolving, and a report by Astute Analytica projects that the?Asia Pacific ready to drink coffee market is anticipated to reach a market size of US$ 40.02 billion by 2032, with a compound annual growth rate (CAGR) of nearly 8.54% during the forecast period from 2024 to 2032.

A brief about the market: -

The ready to drink (RTD) coffee market is at the fore of this caffeinated surge, catching the hearts of busy urban dwellers seeking convenience without offering quality. In 2023, the Asia-Pacific RTD coffee market was valued at more than US$ 15 billion, showcasing remarkable growth. Japan remains the largest market for RTD coffee, with consumers buying more than 5 billion cans and bottles annually. China is catching up swiftly; sales of RTD coffee products surpassed 2 billion units this year, underscoring a substantial change from conventional tea consumption.

Australia contributed notably as well, with Australians consuming around 50 million liters of RTD coffee in the past year. Key brands making waves include Suntory's BOSS Coffee, which sold more than 100 million cases in Japan alone, and Starbucks, whose RTD products generated global revenues exceeding US$ 2 billion, a substantial portion coming from Asia-Pacific markets. Domestic brands like China's Luckin Coffee have also established RTD lines, selling more than 10 million bottles within months of release. Looking ahead, the growth potential of the ready to drink (RTD) coffee market in Asia-Pacific is strong and exhilarating. Projections estimate the market will soar to US$ 25 billion by 2025. E-commerce platforms are playing a key role, with online sales of RTD coffee products exceeding US$ 5 billion in 2023.

Innovations are driving the market forward; for instance, the introduction of plant-based RTD coffees has added US$ 500 million in revenue this year. Technological advancements in packaging, like recyclable and insulated containers, are meeting consumer demands for convenience and sustainability. This dynamic market is leading to increased investments, with more than US$ 1 billion funneled into RTD coffee startups and developments in the region during 2023. The Asia-Pacific RTD coffee terrain is vibrant and rapidly evolving, promising exciting opportunities for brands and an ever-expanding display of choices for consumers eager to fuel their lifestyles with ready-to-drink coffee delights.

Unveiling the Convenience: Busy Lifestyles Fuel Ready-to-Drink Coffee Surge

The Asia Pacific ready to drink (RTD) coffee market is noticing a significant surge in the demand for ready-to-drink coffee, propelled by the increasingly busy lifestyles of its urban populations. With urbanization accelerating, cities like Shanghai and Tokyo are now home to more than 38 million and 25 million people, respectively, underscoring the rapid urban growth. In India, the number of people migrating to urban areas each year has gained 10 million, adding to the bustling city life. The average commute time in cities like Manila and Jakarta now exceeds 90 minutes daily, further highlighting the requirement for convenient consumption alternatives.

In South Korea, the workforce participation rate stands at 74 million individuals, many of whom seek easy and quick beverage solutions. Moreover, the rising number of dual-income households, with 2 in 5 families now having both partners working, has augmented the demand for on-the-go coffee solutions. As work-life balance becomes increasingly elusive, the consumption of ready-to-drink coffee is becoming a staple for those on the move. The ready to drink (RTD) coffee market is now valued at US$ 19 billion, reflecting its widespread popularity. In Japan alone, more than 2 billion cans of ready-to-drink coffee are consumed annually.

With more than 50,000 convenience stores across the region, access to these beverages has never been easier. The expansion of vending machines, with Japan boasting more than 5 million, further improves this accessibility. In Australia, 3 in 4 millennials now regularly consume ready-to-drink coffee, highlighting the shift in consumer preferences. Further, the growth of e-commerce platforms has reduced the distribution of these products, with online sales accounting for US$ 1 billion of the market's value. The convenience factor, associated with the fast-paced urban lifestyle, continues to drive the demand upwards.

Premiumization Propels Ready-to-Drink Coffee into New Flavorful Dimensions

The trend of premiumization in the ready to drink (RTD) coffee market is reshaping consumer choices in the Asia Pacific region, with a newfound emphasis on artisanal and gourmet offerings. The global coffee industry is valued at US$ 495 billion, with Asia Pacific accounting for a substantial portion. The demand for premium coffee experiences has led to the introduction of more than 200 new flavor variants in the past year alone. Specialty coffee shops in the region, numbering about 30,000, have set the stage for this premium shift. In China, the specialty coffee market is rising by US$ 8 billion annually, reflecting the consumer's willingness to pay more for quality. The launch of limited-edition flavors, with more than 100 such releases in 2023, is further pushing this trend. Further, collaborations with renowned coffee brands have resulted in 50 new co-branded products entering the market.

As consumers become more discerning, the focus on quality and taste is paramount. The average price of premium ready-to-drink coffee in cities like Hong Kong and Singapore now surpasses US$ 4, showcasing the market's willingness to spend for superior products in the ready to drink (RTD) coffee market. The growth of cold brew coffee, with sales surpassing US$ 1.6 billion in the region, emphasizes the shift towards more refined flavors. In Taiwan, the demand for nitro coffee has surged, with sales doubling in the past year. The introduction of organic and fair-trade certified alternatives, now numbering more than 500 products, caters to the ethically conscious consumer. Furthermore, the usage of single-origin beans, with 1 in 5 products now featuring this attribute, adds an element of exclusivity. As premiumization continues to impact the market, ready-to-drink coffee is growing into a niche segment that prioritizes flavor, quality, and consumer satisfaction.

Recent Launches: -

In 2024, already a market leader for 36 years now, global CPG giant Nestlé has revitalized its coffee portfolio in China to fulfill the rising demand for sustainable, plant-based bottled drinks. Part of the new scope is two vegan ready-to-drink offerings (Coconut Americano and Oatmeal Latte) and an upcycled coffee offering (Guoran Light Coffee) that is new to the Chinese market. The shake-up, which witnesses all sub-brands combined into the Nescafé lineup, comes as Nestlé desires to consolidate its position in the country’s growing coffee sector.

In 2019, Singapore-based Boncafe International, part of Massimo Zanetti Beverage Group concentrated on the Chinese and Middle-East markets and their growing trend and demand for products within the ready-to-drink coffee sector and is ready to establish a new RTD can coffee line. The new RTD products are available in three different flavors under the Italian brand?Segafredo Zanetti?and will be first presented in the United Arab Emirates market, with China to follow. Boncafe aims to stay ahead of the curve in this sector, which is also significantly rising in the Indo-China countries.“Fortune Business Insights (market research agency) has previously expected that the RTD coffee category may soon substitute the carbonated energy drinks sector” says Tammy Chua, Regional Marketing Manager of Boncafe.

Closing Note: -

As people conclude their exploration of "Caffeinated Convenience: The Rise of Ready-to-Drink Coffee in the Asia Pacific," it is evident that this vibrant market is not just thriving—it is changing the coffee terrain. Propelled by urbanization, a growing middle class, and developing consumer preferences, the Asia Pacific region is adopting ready-to-drink coffee with incredible enthusiasm. With consumption soaring to more than 35 million bags in 2023, and projections indicating a market size of US$ 40.02 billion by 2032, the growth potential is undeniable.

This surge is driven by busy lifestyles, where convenience reigns supreme, and access to RTD coffee has never been easier—thanks to the expansion of convenience stores and e-commerce platforms.

Moreover, the trend of premiumization is increasing in the market, with consumers increasingly seeking high-quality, artisanal flavors. As brands innovate and adjust, introducing plant-based alternatives and sustainable practices, the RTD coffee sector is poised for an exciting future. The Asia Pacific's ready-to-drink coffee journey is a testament to the region’s active consumer culture. As people sip their favorite brews, they celebrate not just the coffee itself, but the lifestyle it means—a blend of tradition and modernity that continues to inspire and energize.