Hot beverages seen to grow into a P122 billion industry in Philippines

MANILA, Philippines — The Philippines’ hot beverage sector may reach P122 billion over the next five years amid increasing consumption in the local market.

GlobalData, a leading data and analytics company in the UK, said the Philippines’ hot drinks sector may  likely increase at an annual rate of 9.2 percent to reach P121.8 billion ($2.4 billion) by 2025 from the P78.5 billion ($1.6 billion) last year.

This will be largely driven by the growth of the hot coffee category, seen registering the fastest rate at 11.6 percent over the next few years.

This will be followed by hot tea, which is expected to grow seven percent annually.

The per capita expenditure of hot drinks in the Philippines increased from $11.7 (P589) in 2015 to $14.4 (P725) in 2020.

However, this is lower than the regional average of $20.4 (P1,027) and the global level of $31.8 (P1,600).

But, per capita expenditure in the Philippines is seen growing to $19.9 (P1,001) by 2025.

“With growing concerns over the negative health effects of preservatives and additives in hot drinks, consumers in the Philippines are opting for products which are naturally healthy and also affordable,” GlobalData consumer analyst Jhinuk Roy said.

Roy said the presence of Swiss food and drink giant Nestlé as the leading company in the Philippines has created a high demand for hot drinks products.

“At the same time, increased consumer health awareness is supporting the growth of hot tea segments such as green tea and herbal tea,” Roy said.

Convenience stores were the leading distribution channel in the hot drinks market in the Philippines, followed by hypermarkets and supermarkets, and food and drinks specialists stores.

Nestle, Indonesian firm PT Mayora Group, and Gokongwei-led Universal Robina Corp. were the top three companies in the country by value in 2020 while Nescafe and Milo were the leading brands.