Euromonitor cited the two countries as part of the top five markets for coffee globally.
Indonesia and Japan are slated to be the Asian markets to have the best opportunity for coffee businesses, driven by the rising demand for more convenient solutions.
According to a study by Euromonitor, Indonesia’s total volume coffee sales reached 710 thousand tonnes last 2017 and is estimated to reach 735 thousand tonnes this year.
Japan, meanwhile, has reached 212 thousand tonnes last year. Coffee consumption is also expected to be twice as large as with their consumption of tea, their traditional beverage.
Indonesia’s and Japan’s coffee development
Euromonitor explained the four waves of coffee development in a country. The first wave represent the discovery of coffee; second wave is when specialty coffee shops entered the picture; the third wave is when coffee shops begins to expand their offerings; and the fourth wave is when premium coffee has become prominent.
Indonesia is still at its 1st wave. As standard fresh ground coffee still said to be the most relevant segment, instant coffee continues to grow.
This is said to be driven by consumers trying to reproduce the foodservice experience at home. Another factor of the instant coffee’s rising demand is the country’s growing urbanisation and more demanding lifestyles.
Meanwhile, Japan is currently at the fourth wave with a predominant demand for on-the-go and convenient products. Coffee beans has become their most prominent format, which represents 32% of the country’s total volume coffee sales in 2018.
They are also predicting that the sales of fresh ground coffee pods to slow down because of the limited space in the country’s households in urban areas.
Where the coffee markets stand internationally
Globally, Indonesia and Japan are third and fifth places in terms of potential for growth in coffee sales. Brazil bagged first place, followed by the United States, whilst Germany ranked fourth. Other growing Asia markets include the Philippines, South Korea and Thailand. China, however, is notably absent despite prominent activities from major coffee players.
(Also read: What's driving the brewing coffee war in China?)
The global coffee market is valued at US$83 billion in 2017. Regionally, the Asia Pacific ranked the highest with US$15 billion, followed by Australasia with US$1 billion.
“[C]ompanies sometimes wrongly believe that mature markets no longer offer opportunities for new players. However, coffee can present excellent opportunities for innovation in different channels, formats and claims, even in mature markets,” Angelica Salado, senior analyst at Euromonitor International, said.
Do you know more about this story? Contact us anonymously through this link.