Coffee Capsule Market- Industry Share and Forecast to 2027

[Research Report] The coffee capsule market was valued at US$ 8,327.19 million in 2019 and is projected to reach US$ 14,062.20 million by 2027; it is expected to grow at a CAGR of 7.0% during the forecast period 2020-2027.

Coffee capsule refers to coffee that is packed in a plastic or aluminum package instead of a paper filter. It is usually designed to be used for a single brand or system and is not interchangeable with other systems. Coffee capsule a single serve vacuum packed capsule that requires a machine which is compatible with it. Consumption of coffee products is rising among health-conscious consumers; thus, manufacturers plan to develop new and innovative formulations, such as coffee capsules, sugar-free coffee premix, and other products, in the market. Alzheimer's disease is the leading cause of dementia in the elderly, followed closely by Parkinson's disease. Studies have shown that drinking three to five cups of coffee per day can reduce the risk of contracting Alzheimer's, Parkinson's, and other forms of dementia by up to 65%. Antioxidants fight against the health-damaging free radicals ("oxidants") in the body and boost the immune system. Many fruits and vegetables also fight against the oxidants, but coffee is the most popular beverage among consumers as it is a rich source of antioxidants. Coffee helps reduce the chances of developing several types of cancer, including oral cancer, skin cancer, and liver cancer. Type II Diabetes is a potentially deadly disease that is reaching epidemic proportions in Australia. Numerous studies have shown that coffee can dramatically reduce the risk of developing diabetes. Caffeine works in two ways to improve athletic performance. It raises metabolism, increases the oxidation of fatty acids, and mobilizes fatty acids from the fat tissues. The consumption of coffee has increased among health-conscious consumers as it has anti-cancer properties. These benefits of consumption of coffee boost the demand for coffee capsules across the world.

Europe is expected to hold the largest share of the global coffee capsule market during the forecast period. This mainly attributed to the shift in the food eating habits and socio-economic conditions of consumers. Increasing disposable income of consumers and rising number of coffee consumers drive the market for coffee capsule. The growing expenditure on nutritional and healthy products, and rising awareness about the health benefits associated with coffee capsules also support the market in the region. The combination of convenience, brand experience, premium positioning, and the capacity of the manufacturers to innovate and provide new products are yet another factors favoring the market for coffee capsules in Europe. Also, the shift in the consumer preference from instant coffee to more premium options, such as fresh ground coffee, is expected to drive the market for coffee capsule in the region. In addition, the growing popularity of specialty cafes in countries across Europe is further boosting the consumption of coffee which further supports the market for coffee capsule.

COVID-19 outbreak started in Wuhan (China) in December 2019 and has rapidly spread around the world. The US, India, Brazil, Russia, Spain, Mexico, and Argentina are among the most-affected countries in terms of COVID-19 cases and pronounced deaths, as of September 2020. According to the report by WHO, as of September there were ~33,580,503 COVID-19 confirmed cases and ~1,006,975 death cases worldwide. The COVID-19 pandemic has affected economies and undertakings due to imposed lockdowns, travel bans, and business shutdowns. The global food & beverages industry is one of the major businesses witnessing supply chain breaks and manufacturing disruptions due to lockdown and office shutdowns. All these factors have greatly affected the global coffee capsule market growth.

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Coffee Capsule Market: Strategic Insights

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Market Insights

Convenience oriented customer style

Consumer inclination toward innovative machines for convenience has increased the adoption of capsule coffee machines across the world, which in turn, drives the growth of the market. Due to their rising population and increasing adoption of Western trends, China and India are potential markets for coffee pods and capsules. Nowadays, due to urbanization, consumers have a work-oriented lifestyle. They need everything quickly and conveniently. They look for products which can save and provide good quality; thus, coffee capsule comes into demand. The increase in demand for ready-to-drink coffee beverages majorly drives the market across Asia Pacific. There has been an increase in applying these products in the coffee shops due to rising demand for time-pressed consumers. Continuous advancements in the capsule machine technology upgraded with new features, innovative concepts, and applications evolve to provide enhanced quality and improved capacity, along with low energy consumption and minimum maintenance cost. Rapid urbanization in many developing economies, infrastructural development, and the increasing working population have increased the demand for convenient-to-use, packaged food and beverages. As a result, the adoption of coffee capsule is rising in most cafés and restaurants.

Product Insights

Based on product, the coffee capsule market is further bifurcated into open source system and close source system. In 2019, the close source system segment dominated the market. In the capsule coffee system, the coffee is shrink-wrapped in a capsule instead of filter paper. There are variety of capsules and pods, with 7–10 grams of coffee content. Coffee capsule is used for an array of products, not just ground coffee. A closed-source system is a combination of a particular machine with a specific capsule. Closed-source systems were the first to be introduced in the market, and hence, the segment accounts for the larger share of the global capsule coffee machine market. Coffee capsule machines have many advantages. It simplifies coffee making process, cutting out the grinding, pressing, and storing the coffee. Coffee in the capsule is ground to perfection and sealed at optimum pressure. Therefore, all these factors drive demand for the coffee capsule. Moreover, the growing young population and rising number of coffee outlets are further expected to boost the demand for coffee capsules in the market.

Application Insights

Based on application, the coffee capsule market is further segmented into household and commercial. In 2019, the commercial segment dominated the market. Increasing coffee consumption is one of the significant factors that drive the demand for coffee capsules. The increasing popularity of socializing at coffee shops among millennials has contributed to specialty coffee shops' growing popularity. The preference for different fresh coffee types has further led to the emergence of coffee shops, specialty coffee shops, and quick-service restaurants. Besides, the consumption of coffee has been increasing significantly in both advanced and emerging economies. Coffee is the second-most preferred beverage after soft drinks in developed countries. This increasing demand for coffee creates lucrative opportunities for the vendors in the market, which in turn, drives the growth of the specialty coffee shops market during the forecast period. Due to the rapidly increasing coffee shop culture, fresh-ground coffee pods and coffee capsules are set to register substantial growth in both volume and value terms during the forecast period.

Distribution Channel Insights

Based on distribution channel, the coffee capsule market is further segmented into supermarkets and hypermarkets, specialty stores, online stores, and others. In 2019, the supermarkets & hypermarkets segment dominated the market. Supermarkets and hypermarkets offer wide variety of food, beverages and household products. Supermarkets and hypermarkets provide extensive merchandise mix along with different brands of coffee capsule, placed under the same roof. Coffee capsule have a dedicated section in the supermarkets and hypermarkets; thus, customers are provided with a wide variety of option to choose. Producers sell coffee capsule directly to the dealer or distributor, who further sells them to the distributor at supermarkets and hypermarkets. The distributor at supermarkets and hypermarkets keep the assortment of coffee capsule depending on the consumers demand. High footfall in hypermarkets and supermarket makes it easier for the coffee capsule producers to target their customer base.

A few key players operating in the global coffee capsule market are VERO Coffee, Vittoria Food and Beverage, Belmoca Belgium (Belmio), Coind group, Nestle Nespresso S.A., Jacobs Douwe Egberts BV, Gloria Jean’s Gourmet Coffee, Luigi Lavazza S.p.A, Dualit Limited and illycaffè S.p.A. These companies implement new product developments, and mergers and acquisitions strategies to enlarge their customer base and gain significant market share across the world, which in turn, permits players to maintain their brand name in the global market.

Coffee Capsule Market Regional Insights

The regional trends and factors influencing the Coffee Capsule Market throughout the forecast period have been thoroughly explained by the analysts at Insight Partners. This section also discusses Coffee Capsule Market segments and geography across North America, Europe, Asia Pacific, Middle East and Africa, and South and Central America.

Coffee Capsule Market Report Scope

Coffee Capsule Market Players Density: Understanding Its Impact on Business Dynamics

The Coffee Capsule Market market is growing rapidly, driven by increasing end-user demand due to factors such as evolving consumer preferences, technological advancements, and greater awareness of the product's benefits. As demand rises, businesses are expanding their offerings, innovating to meet consumer needs, and capitalizing on emerging trends, which further fuels market growth.

Market players density refers to the distribution of firms or companies operating within a particular market or industry. It indicates how many competitors (market players) are present in a given market space relative to its size or total market value.

Major Companies operating in the Coffee Capsule Market are:

1. Gloria Jean

Disclaimer: The companies listed above are not ranked in any particular order.

Coffee Capsule Market, by Product Type

• Open Source System
• Close Source System

Coffee Capsule Market, by Application

• Household
• Commercial

Coffee Capsule Market, by Distribution Channel

• Supermarkets and Hypermarkets
• Speciality Stores
• Online Stores
• Others

Company Profiles

• VERO Coffee
• Vittoria Food and Beverage
• Belmoca Belgium (Belmio)
• Coind group
• Nestle Nespresso S.A.
• Jacobs Douwe Egberts BV
• Gloria Jean’s Gourmet Coffee
• Luigi Lavazza S.p.A
• Dualit Limited
• illycaffè S.p.A.