Market Scenario 

Europe ready to drink coffee market was valued at US$ 2.38 billion in 2023 and is projected to hit the market valuation of US$ 4.53 billion by 2032 at a CAGR of 7.41% during the forecast period 2024–2032.

Europe, a continent renowned for its deep-rooted coffee culture, is witnessing a dynamic shift in consumption patterns as ready-to-drink (RTD) coffee gains unprecedented popularity. In 2023, Europe's coffee consumption reached a staggering 55 million 60-kilogram bags, with countries like Germany, Italy, France, and the United Kingdom leading the charge. Germany tops the list in the ready to drink (RTD) coffee market, consuming over 9 million bags annually, reflecting its long-standing tradition of coffee appreciation. The rise in coffee consumption is propelled by the millennial and Gen Z demographics, who are seeking convenience and novel coffee experiences. Urbanization and busy lifestyles have amplified the demand for on-the-go caffeine fixes, steering consumers toward RTD coffee options that offer both quality and accessibility.

The potential of the ready to drink (RTD) coffee market in Europe is soaring, fueled by a confluence of factors such as innovation in flavors, health-conscious formulations, and sustainable packaging. In 2023, the European RTD coffee market was valued at approximately $2.38 billion, marking a significant surge in consumer interest. The United Kingdom has emerged as a key player, with RTD coffee sales exceeding 300 million units this year, highlighting a shift from traditional hot brews to chilled, convenient alternatives. Germany follows closely, with consumers purchasing over 250 million liters of RTD coffee, a testament to the market's robust growth. Brands making substantial waves include Nestlé's Nescafé, which sold over 500 million RTD coffee units across Europe, and Starbucks, whose RTD products generated revenues surpassing $1 billion in the European market alone. Local brands like Illycaffè from Italy have also capitalized on this trend, selling over 50 million cans of RTD espresso and cold brew varieties.

Looking forward, the growth potential of the ready to drink (RTD) coffee market in Europe is both robust and exhilarating. Projections estimate the market will ascend to $9 billion by 2025. The surge is driven by innovations such as plant-based RTD coffees, which added an impressive $400 million in revenue this year, catering to the growing vegan and lactose-intolerant consumer base. E-commerce platforms are significantly boosting sales, with online RTD coffee transactions exceeding $1.2 billion in 2023. Sustainable and recyclable packaging solutions have resonated with environmentally conscious consumers, leading to an uptick of 150 million units sold in eco-friendly formats. This vibrant market is attracting considerable investments, with over $800 million channeled into RTD coffee startups and expansions in the region during 2023. Europe's RTD coffee landscape is rapidly evolving, heralding exciting opportunities for brands and providing consumers with an expanding array of choices to fuel their lifestyles with convenient and innovative coffee delights.

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Market Dynamics 

Driver: Convenience Revolution: The Rising Demand for Ready-to-Drink Coffee in Europe

The demand for ready to drink (RTD) coffee market in Europe has been significantly driven by the increasing consumer preference for convenient and on-the-go beverage options. In Europe, the RTD coffee market witnessed sales worth over 2 billion euros in 2023. This trend is largely fueled by the fast-paced lifestyle of urban dwellers, where over 70 million people are living in major European cities. With a reported 9 out of 10 Europeans consuming coffee daily, the shift towards grab-and-go options is notable. In 2022, 50 million RTD coffee units were sold in Germany alone, reflecting the growing consumer inclination towards these beverages. Furthermore, the working population, which consists of 200 million people across Europe, demands convenient options to fit their hectic schedules, which contributes to the rise in RTD coffee consumption.

Additionally, the growing presence of retail outlets in the regional ready to drink (RTD) coffee market is bolstering the accessibility of RTD coffee. In 2023, there were over 300,000 convenience stores across Europe stocking RTD coffee products. Supermarkets recorded the highest sales, with 120 million RTD coffee units sold in just one year. Online platforms have also played a key role, with e-commerce channels witnessing a 30% increase in RTD coffee orders in 2023, equating to 15 million units sold online. The market is further driven by the millennial and Gen Z population, accounting for 150 million potential consumers who prioritize convenience. As a result, the RTD coffee market in Europe is expected to continue its upward trajectory, with experts predicting sales to reach 3 billion euros by 2025.

Trend: Collaborative Ventures: Coffee Brands and Health-Focused Food Companies Unite

The trend of increased collaboration between coffee brands and health-oriented food companies is shaping the ready to drink (RTD) coffee market in Europe. In 2023, over 100 collaborations were formed between leading coffee brands and health-focused food companies. These partnerships are primarily focused on developing innovative products that cater to the growing demand for health-conscious beverages. For instance, a notable collaboration between a top coffee brand and a renowned health food company resulted in the launch of 10 new RTD coffee variants infused with superfoods. Moreover, the European RTD coffee market saw the introduction of 50 new product lines in 2022, emphasizing health benefits such as added vitamins and antioxidants.

These collaborations in the ready to drink (RTD) coffee market are also aimed at tapping into the 300 million strong health-conscious consumer base in Europe. Health-oriented coffee variants accounted for 40% of total RTD coffee sales in 2023, with 500 million euros generated in revenue from these products alone. Additionally, surveys conducted in 2023 revealed that 80% of consumers preferred RTD coffee with added health benefits. The collaboration trend is further supported by the growth of functional beverages, with the European market for functional foods and beverages valued at 50 billion euros in 2023. As these collaborations continue to thrive, they are expected to contribute significantly to the growth of the RTD coffee market by introducing products that align with evolving consumer preferences.

Challenge: Navigating Supply Chain Challenges: Ensuring Stability in RTD Coffee Production

Supply chain disruptions present a significant challenge to the ready to drink (RTD) coffee market in Europe, affecting ingredient availability and production cost stability. In 2023, the European coffee industry faced a shortage of 2 million tonnes of coffee beans due to climatic changes in major coffee-producing regions. This shortage led to an increase in raw material costs, with coffee bean prices rising by 300 euros per tonne. Additionally, labor strikes and transportation issues resulted in delivery delays, with 20% of shipments arriving late. The disruption affected 5,000 RTD coffee production facilities across Europe, causing a temporary halt in production lines and contributing to a 10% decrease in market supply.

These supply chain challenges have also impacted the pricing strategies of coffee brands in Europe’s ready to drink (RTD) coffee market. In 2023, the average retail price of RTD coffee increased by 0.50 euros per unit, leading to a decline in consumer purchases by 5 million units. Retailers recorded a loss of 100 million euros in sales revenue due to the increased product costs. Furthermore, logistical challenges in the supply chain resulted in a 15% increase in distribution expenses for manufacturers. To mitigate these challenges, companies are investing in alternative supply chain solutions, such as sourcing coffee beans from diverse regions and implementing advanced logistics technologies. As the market adapts to these challenges, the focus remains on maintaining product availability and price stability to sustain consumer demand.

Segmental Analysis 

By Product

Espresso's prominence in the European ready to drink (RTD) coffee market is driven by Europe's deep-rooted coffee culture, particularly in countries like Italy, plays a significant role. In 2023, the segment generated more than US$ 1.16 billion in revenue. Wherein, Italy, being the second-largest import market for green coffee in Europe, imported over 10 million bags of coffee in 2023. This cultural affinity for espresso is mirrored across Europe, where consumers increasingly seek the rich, robust flavors that espresso offers, contributing to over 1.8 billion espresso-based ready-to-drink units sold annually. Additionally, the convenience of ready-to-drink espresso products aligns with the fast-paced lifestyle of modern consumers, making it a popular choice. The market's growth is further fueled by innovations in packaging and flavor, with over 500 new product launches in the past year catering to diverse consumer preferences. The demand for premium and gourmet coffee experiences at home or on-the-go has led to a surge in high-end espresso machine sales, with Germany recording over 2.5 million units sold in 2023.

The growth of the espresso segment is also attributed to its appeal among a wide range of end users, from busy professionals to young adults seeking quick caffeine fixes. More than 60% of European coffee drinkers are under 45, a demographic that favors the convenience and variety of ready-to-drink options. Moreover, the rise of specialty coffee shops and the influence of global brands like Starbucks, which opened over 200 new stores in Europe last year, have popularized espresso-based drinks, further boosting demand. The segment is projected to witness strong growth due to the continuous innovation in product offerings, with the European ready to drink (RTD) coffee market reaching a valuation exceeding €20 billion in 2023. The expansion of distribution channels, with over 30,000 retail outlets stocking these products, has made them more accessible. The European market's focus on sustainability and quality also encourages the adoption of premium espresso products, which are perceived as offering superior taste and ethical sourcing, with 70% of products now bearing eco-friendly certifications. This combination of cultural, economic, and consumer trends positions espresso as a dominant force in the ready to drink (RTD) coffee market in Europe.

By Flavor 

Based on flavor, the hazelnut segment is leading the market by contributing more than US$ 520 million to the Europe market. The dominance of hazelnut flavor in Europe's ready to drink (RTD) coffee market can be attributed to multiple factors intertwined with consumer preferences and cultural associations. First, the European palate has long favored nutty flavors, with hazelnut being a culinary staple across various traditional dishes and confections, notably in regions like Italy and France. In 2023, reports indicate that over 500 new hazelnut-flavored food and beverage products were launched in Europe, reflecting its ingrained popularity. Furthermore, the rise in health consciousness has driven consumers towards flavors perceived as natural or less artificial, and hazelnut fits this bill due to its wholesome and rich profile. The ready-to-drink coffee segment, valued at nearly 20 billion euros, has seen hazelnut-infused products accounting for a significant portion of sales, driven by its ability to offer a comforting, familiar taste that resonates well with local consumers.

Key demographics in the Europe ready to drink (RTD) coffee market driving the demand for hazelnut-flavored coffee include millennials and Gen Z, who collectively make up around 60% of the market's consumer base. These groups are known for their adventurous taste preferences but also show a strong inclination towards nostalgic and comforting flavors. Additionally, premiumization trends have seen brands associating hazelnut with high-end, artisanal coffee experiences, further enhancing its appeal among affluent consumers. The marketing strategies of leading brands have also played a pivotal role, with 300 million euros reportedly spent on advertising campaigns focused on hazelnut products in 2023 alone. This, coupled with innovations such as plant-based hazelnut creamers, which appeal to the growing vegan population, underscores the flavor's versatility and adaptability to market trends, solidifying its position as the top choice in Europe's ready-to-drink coffee sector.

By Price Range

The European ready to drink (RTD) coffee market is witnessing an exciting surge, with the regular price segment spearheading this dynamic trend by generating over US$ 1.53 billion in revenue in 2023 and also set to expand at a CAGR of 7.41%. This segment's dominance can be attributed to a perfect blend of affordability, accessibility, and evolving consumer preferences. In an era where convenience marries quality, consumers are drawn to products that offer a quick caffeine fix without compromising on taste or breaking the bank. The regular price range strikes a sweet spot, appealing to a broad demographic that includes busy professionals, students, and casual coffee enthusiasts. The average person in Europe drinks about 200 liters of coffee annually, and with 70% of consumers prioritizing convenience in their daily routines, the regular RTD coffee segment caters precisely to these needs. Furthermore, the European Union's coffee imports stand at over 3 million tons, highlighting a robust demand that the RTD market is tapping into effectively.

The mindset driving this trend in the ready to drink (RTD) coffee market is one of practicality and exploration. Today's consumers are adventurous, with 60% expressing a keen interest in trying new coffee flavors and variants, which the RTD market continually innovates upon. The regular segment provides a testing ground for these innovations, offering diverse flavors such as caramel, vanilla, and mocha, which add to its allure. Moreover, with over 30% of Europe's population residing in urban areas, the demand for quick, on-the-go solutions has skyrocketed. In cities like Berlin and Paris, where over 20 million units of RTD coffee are sold annually, the segment's presence is ubiquitous. The growth is further buoyed by sustainability trends, with eco-friendly packaging options gaining traction and 50% of consumers preferring brands that align with green values. These factors collectively propel the regular price segment to the forefront of the market, making it both an exciting and lucrative player in the European RTD coffee landscape.

By Packaging 

In the dynamic landscape of the European ready to drink (RTD) coffee market, PET bottles have emerged as the leading packaging choice, commanding significant attention and market share. In 2023, it accounted for over US$ 890 million in revenue as it offers unparalleled convenience and portability, essential attributes for modern consumers who prioritize on-the-go consumption. The light weight of PET bottles, combined with their shatterproof nature, makes them ideal for active lifestyles. Additionally, advancements in PET technology have enabled the creation of bottles that can preserve the freshness and flavor of coffee, a critical consideration for discerning consumers. The European market consumed over 14 billion units of ready-to-drink coffee in PET bottles last year, a testament to their widespread acceptance. Furthermore, PET bottles are highly recyclable, aligning with the growing consumer demand for sustainable packaging solutions. The recycling rate for PET bottles reached 1.8 million tons in Europe, reflecting both consumer participation and industry commitment to environmental responsibility.

Another key factor contributing to the growth of PET bottles in ready to drink (RTD) coffee market is their cost-effectiveness. The production costs associated with PET bottles are lower than those of glass or metal alternatives, allowing companies to offer competitive pricing. This has been particularly beneficial in the context of the European market, where price sensitivity is a significant consideration for consumers. The efficiency of PET bottle production is evidenced by the fact that over 60% of leading beverage companies in Europe have integrated PET packaging into their supply chain strategies. Additionally, the versatility of PET bottles allows for innovative branding opportunities, as companies can easily customize bottle shapes and labels to enhance product appeal. Market reports indicate that the ready-to-drink coffee segment in Europe experienced a growth of nearly 50 million units in the past year alone, with PET bottles accounting for the majority of this increase. As the industry continues to evolve, the prominence of PET bottles is expected to persist, driven by their adaptability to consumer preferences and market demands.

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Country Analysis 

Germany is the largest ready to drink (RTD) coffee market in Europe. In 2023, it contributed more than US$ 410 million to the regional market revenue, which can be attributed to a blend of cultural, economic, and strategic factors. The country's rich coffee culture, underscored by a history of coffee consumption and innovation, sets the stage for its leadership. With over 80 million coffee drinkers, Germany boasts one of the highest per capita coffee consumption rates in the world. This established audience provides a robust foundation for the RTD coffee market. Moreover, Germany is home to more than 3,000 coffee-related businesses and over 5,000 cafes, fostering a competitive and innovative environment that drives market growth. German manufacturers have been at the forefront of introducing new flavors and sustainable packaging solutions, responding to evolving consumer demands. Reforms such as reduced import tariffs and incentives for sustainable practices have further fueled industry expansion, making Germany a pivotal hub for RTD coffee in Europe.

Italy, renowned for its espresso culture, holds the second-largest share in the European ready to drink (RTD) coffee market. Italians consume about 6 billion cups of coffee annually, with a growing interest in convenient coffee options like RTD products. The Italian market thrives on its deep-rooted coffee traditions, which companies have cleverly adapted to modern consumer lifestyles by offering high-quality, authentic Italian coffee experiences in a ready-to-drink format. Italy's RTD coffee market growth is also bolstered by a burgeoning café culture, with over 150,000 coffee bars nationwide. Recent government initiatives to promote digitalization and innovation in the beverage sector have encouraged Italian companies to invest in cutting-edge production processes and diversify their product offerings. As a result, Italy not only remains a significant player but also a trendsetter in flavor and packaging innovations within the RTD coffee market.

The United Kingdom, ranking third in ready to drink (RTD) coffee market, presents a dynamic landscape driven by its fast-paced lifestyle and diverse consumer base. With approximately 95 million cups of coffee consumed daily, the UK market demonstrates a strong, consistent demand for coffee, making it ripe for RTD products. The nation's inclination towards convenience fuels the RTD coffee segment's growth, supported by a network of over 25,000 coffee shops and cafés that shape consumer preferences. The UK's emphasis on health and wellness has led to the introduction of low-sugar and dairy-free RTD coffee options, aligning with consumer trends towards healthier lifestyles. Government policies promoting sustainable business practices and the reduction of single-use plastics have encouraged companies to innovate in eco-friendly packaging solutions. The UK's strategic focus on sustainability and health, combined with its robust coffee culture, positions it as a formidable contender in the European ready to drink (RTD) coffee market, closely trailing behind Germany and Italy.

Top Players in Europe Ready to Drink Coffee Market

• Nestlé S.A.
• Arla Foods Group
• Emmi AG
• Luigi Lavazza S.p.A.
• Britvic PLC
• Crediton Dairy Ltd
• illycaffè S.p.A.
• Cargill, Incorporated
• Costa Limited
• PepsiCo, Inc.
• Asahi Group Holdings, Ltd.

Market Segmentation Overview:

By Product

• Ginseng
• Espressos
• Lattes
• Guarana
• Yerba Mate
• Acai Berry
• Others

By Flavor Type

• French Vanilla
• Peppermint
• Hazelnut
• Pumpkin Spice
• Mocha
• Butterscotch
• Caramel
• Others

By Packaging

• Glass Bottle
• Canned
• PET Bottle
• Others

Price Range

• Regular
• Premium
• Ultra Premium

By Serves

• Single Serve
  • 8 Oz
  • 10 Oz
  • 12 Oz
• Multi serve (More Than 12 Oz)

By Distribution Channel

• Off trade/Offline
  • Independent Retailers
  • Supermarkets/Hypermarkets
  • Convenience Stores
  • Food Retail Services
  • Automated Vending
  • Others
• Online trade
  • E Commerce platforms
  • Company Websites
  • Online Food Retail

By End Users

• Boomers
• Millennials
• Gen X
• Gen Y
• Gen Z
• Others

By Country

• UK
• Germany
• France
• Italy
• Spain
• Poland
• Russia
• Rest of Europe