In the context where consumers simultaneously pursue quality, convenience and personalisation, on-the-go coffee brands need to balance premium experiences with diverse scenarios to promote comprehensive category penetration.
Jean Lu, Associate Research Analyst, China
Market Definitions
This Report covers packaged coffee, including instant, drip bag and pod coffee:
- Pod coffee refers to coffee products that require a pod coffee machine
- The Report excludes packaged ground coffee, coffee beans and ready-to-drink (RTD) liquid formats
- The Report collectively refers to instant coffee, drip bag, pod coffee and coffee concentrate as ‘on-the-go coffee’.
The Report discusses the market size and forecast covering instant, drip bag and pod coffee (excluding pod coffee machines):
- Market size is based on sales through all retail channels (off-trade), including direct to consumer.
- Although liquid coffee/coffee concentrate is not covered in the market size, it is included in the consumer research and discussed in the consumer sections.
Subgroup definitions (by consumption frequency):
- ‘Heavy drinkers’ refers to people who consume a certain type of coffee once a day or more.
- ‘Moderate drinkers’ refers to people who consume a certain type of coffee once a week or more.
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EXECUTIVE SUMMARY
- Key issues in this Report
- Definitions
- What you need to know
- Market factors
- New product trends
- Consumer trends and future opportunities
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The market
- Market size and forecast
- Instant coffee tops the on-the-go category, but intensified competition slows growth
- Graph 1: retail value sales* of instant coffee (best- and worst-case forecast), 2020-30
- Graph 2: retail volume sales* of instant coffee (best- and worst-case forecast), 2020-30
- The drip bag coffee market has hit a wall
- Graph 3: retail value sales* of drip bag coffee (best- and worst-case forecast), 2020-30
- Graph 4: retail volume sales* of drip bag coffee (best- and worst-case forecast), 2020-30
- Pod coffee maintains high-speed single-digit growth
- Graph 5: retail value sales* of pod coffee (best- and worst-case forecast), 2020-30
- Graph 6: retail volume sales* of pod coffee (best- and worst-case forecast), 2020-30
- Market factors
- Food and drink consumption is becoming more reserved, but the willingness to trade up in coffee remains high
- Graph 7: categories consumers plan to spend more on in the next three months, 2025
- Graph 8: trading up and down in non-alcoholic drinks – buying the more expensive product, 2023-24
- Delivery subsidies intensify competition within the coffee category, with freshly-made coffee squeezing the on-the-go category market
- Online channels are becoming an important growth avenue for on-the-go coffee
- Yunnan’s coffee industry continuously optimises in structure, driving technology and quality upgrades in various coffee products
- Brand highlights
- Nestlé firmly holds the first position on Taobao-family ecommerce platforms, with Moccona leading in growth rate
- Graph 9: value sales and growth rate on Tmall and Taobao, by top 10 on-the-go coffee brands, 2024-25
- Content ecommerce fosters the explosive growth of functional coffee
- Graph 10: value sales and growth rate on Douyin, by top 10 on-the-go coffee brands, 2024-25
- Leading brands are investing in Yunnan, promoting sustainability and quality upgrades from the source
- Local speciality coffee shops have introduced premium instant products, breaking location boundaries
- New product trends
- Share of drip bag products continues to drop, while coffee concentrate blooms in new product share
- New example of coffee concentrates
- Niche fruit flavours are emerging, while Chinese tea flavours show strong growth momentum
- Graph 11: flavour landscape for coffee
- Fruit flavour innovation is diversifying
- Tea flavours are becoming more refined
- On-the-go coffee replicates flavours and textures from coffee shops
- Attention to minus, functional and plus claims continues to rise
- Graph 12: top ten claim categories in new coffee launches, 2020-25
- Graph 13: top five minus-type claims in new coffee launches, 2020-25
- Vitamin/mineral fortified claims achieve high growth
- Graph 14: plus claims in new coffee launches, 2020-25
- The proportion of products with slimming function continues to rise
- Graph 15: top five functional claims in new coffee launches, 2020-25
- Multiple paths to meet slimming needs
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The consumer
- Overview of consumer trends
- Penetration rates: instant coffee remains stable, and those of drip bags and concentrates increase
- Graph 16: coffee segments, by penetration rate, 2023-25
- Graph 17: penetration rates in select coffee segments, by age, 2025
- Niche coffee categories still have significant potential for penetration in lower-tier cities
- Graph 18: penetration rates in select coffee segments, by city tier, 2025
- Graph 19: coffee sub-category penetration rate – drip bag coffee, by city tier, 2023-25
- Category penetration advantage in the higher monthly household income group is evident
- Graph 20: penetration rates in select coffee segments, by monthly household income, 2025
- Graph 21: changes in penetration of select coffee sub-categories, by monthly household income, 2025 vs 2024
- High user overlap between mainstream coffee categories, and freshly made coffee is further penetrating the on-the-go coffee consumer group
- Graph 22: penetration rates in select coffee sub-categories, by penetration rates in select coffee sub-categories, 2025
- Graph 23: proportion of instant coffee consumers who drink freshly made coffee, 2023-25
- Instant coffee still holds advantages in high-frequency consumption, while pod coffee has the potential to increase frequency
- Graph 24: consumption frequency in coffee sub-categories, 2025
- Instant coffee leads in brand loyalty, while there is a strong willingness to trade up in pod coffee
- Graph 25: trading up and down, by coffee sub-category, 2025
- Overview of consumer groups
- Instant coffee: revolutionise the category with all-aspect quality narratives and organic certification
- Penetration rate and the proportion of heavy drinkers vary among consumers with different monthly household incomes
- Graph 26: instant coffee category penetration rate, by monthly household income, 2023-25
- Graph 27: proportion of heavy instant coffee drinkers, by monthly household income, 2023-25
- Groups with relatively high monthly household income have a strong willingness to upgrade, and instant coffee has a chance for a premium breakthrough
- Graph 28: willingness to upgrade/downgrade instant coffee consumption – trading up, by monthly household income, 2025
- Over half of high monthly household income consumers focus on the degree of roast, brewing methods and tasting methods
- Graph 29: innovation features, 2025
- Comprehensive product communication aids personalised product selection
- Consumers with higher monthly household income value the quality of coffee beans
- Graph 30: factors to consider when buying on-the-go coffee, by monthly household income, 2025
- Enhancing the perception of product value through comprehensive information and communication of coffee bean quality
- Let high MHI users see the value: target the scarcity of organic certifications
- Examples of global organic instant coffee innovations
- Recommend milk coffee combinations to attract lower-income families
- Graph 31: product preference – milk coffee/black coffee, among instant coffee drinkers with a monthly household income of RMB9,999 or less, 2025
- Case: a guide to brewing methods for hot or cold milk coffee
- Drip bag coffee: scenario-oriented communication and low-caffeine innovation help convert female consumers
- The penetration rate of drip bag coffee is increasing yearly, with potential for increasing women’s consumption frequency
- Graph 32: drip bag coffee category penetration rate, by gender, 2023-25
- Graph 33: heavy drinkers of drip bag coffee, by gender, 2023-25
- Magnify drip bag coffee’s characteristics to create differentiated drinking scenarios
- Graph 34: drinking occasions, 2025
- Breakfast could be the key daypart to drive drip bag coffee adoption among female consumers
- Graph 35: drip bag coffee consumption scenario, by gender, 2025
- Case study of associating drip bag coffee with breakfast
- Tourism market recovers: travel and holidays are the most often-discussed scenarios for drip bag coffee
- Tap into drip bag coffee’s potential opportunities in travel scenarios
- New product development in low-caffeine drip bag coffee can appeal to female consumers
- Graph 36: product preference – caffeine content, by gender, 2025
- Pod coffee: diverse consumption combinations help with penetration into everyday scenarios, with localised coffee beans driving differentiated upgrades
- Pod coffee most readily evokes the impression of being high-end, but its everyday image has yet to be established
- Graph 37: coffee format perception – drip bag/pod/liquid coffee, 2025
- The intention to trade up in pod coffee consumption is the highest – the key is to integrate it into everyday life
- Graph 38: trading up*, by on-the-go coffee category, 2025
- Leverage diverse pairing options to expand consumption scenarios, aiding pod coffee in penetrating daily life
- Graph 39: drinks to pair coffee with, 2025
- Coffee milk upgrade: chilled fresh milk and plant-based milk lead beverage innovation
- Creative ways to drink black coffee: sparkling water and coconut water usher in healthiness and refreshment
- Coffee in dessert: ice cream and yogurt open up a variety of ways to blend coffee with food
- Besides flavour, pod coffee drinkers place greater emphasis on the quality of coffee beans and craftsmanship
- Graph 40: factors considered when purchasing on-the-go coffee – overall population, 2025
- Graph 41: factors considered when purchasing on-the-go coffee – pod coffee drinkers, 2025
- The quality upgrade of pod coffee can conform to the localisation trend of coffee beans
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Appendix – market size and forecast, research methodology and abbreviations
- Market size and forecast
- Methodology: consumer survey
- Methodology: TURF analysis
- Abbreviations
- Co-author
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