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Direct-To-Consumer (D2C) coffee market Size Worth $ 201,472 Million by 2027 | CAGR: 7.0%

The global direct-to-consumer (D2C) coffee market is broadly impacted by the rising demand for various coffee products including single-serve, organic and other forms which by far are healthier and easily accessible. Coffee is one of the most popular beverages in the world, the International Coffee Organization (ICO) predicted that global coffee consumption in 2019-2020 would be 169.34 million bags. Coffee that has been roasted and is ready to serve can be found in retail stores, coffee shops, and shopping malls. Anyone who wants to make an instant coffee drink can buy direct-to-consumer coffee. Pouches, jars, ready-to-drink coffee, and a variety of direct-to-consumer coffee variations are all available. In recent years, there has been an increase in demand for unusual and premium products, and a dozen or more coffee start-ups/direct-to-consumer (D2C) enterprises are catering to shifting client tastes and expectations. A rise in disposable income combined with a change in lifestyle has unmistakably moved the worldwide demography toward exquisite foods and beverages. Since the onset of the epidemic, sales of retail packaged coffee have surged, as café closures and lockdowns have prompted consumers to seek out superior at-home coffee experiences. Nestlé reported high consumer demand for its at-home coffee products around the world in its full-year results for 2020.

The global D2C coffee market generated a revenue of US$ 983.6 million in 2020 and is forecast to grow at a compound annual growth of 15.3% during the forecast period 2017 to 2027. Direct-to-consumer (D2C) enterprises manufacture and deliver their products to customers without the need for intermediaries. D2C businesses can experiment with distribution techniques such as shipping directly to clients, forming partnerships with physical places, and launching pop-up stores, unlike their traditional retail competitors.

Coffee is the world's second most traded commodity. In the years 2017–2018, the global production of coffee beans from around 60 nations was 9513 million tonnes, with a value of US$ 200 billion. Coffee beans were consumed in excess of 165 million 60-kg containers in 2018–2019. Every day, 500 billion cups of coffee are consumed, according to estimates. Coffee pods and capsules, as well as RTD coffee, are becoming increasingly popular among people, especially in North America and Western Europe, as a handy way to make delicious coffee at home in less time. Furthermore, a rising number of consumers are prepared to invest in coffee machines in order to replicate the coffee shop experience at home, and players are responding by introducing coffee pods that are compatible with different machines. Although traditional players such as Nestlé, Tata Coffee, and others offer instant coffee and currently dominate the market, new-age D2C players such as Pact Coffee, The Grind Roaster, Blue Bottle, and others have entered the market, aiming to improve the consumer experience through new flavors, blends, and aromas, as well as new modes of cultivation and processing and selling their products directly to the consumers. Customers' perceptions of major coffee brands must be understood, as well as the crucial stimuli that drive purchasing decisions, in order to catalyze growth in the D2C coffee category. The direct-to-consumer brand manufactures and sells different and innovative coffee products through its online and offline channels. 

The influence of some of the important market drivers, such as the increased demand for certified and organic products, is examined in the research study. In recent years, consumers have become more aware of the manufacturing of the products they buy, as well as the sources of their purchases. This is particularly true in the food and beverage supply chain, which includes coffee. The demand for single-serve coffee systems is also propelling market expansion. According to the National Coffee Drinking Trends Survey, single-cup makers are present in 41% of homes and 28% of offices in the United States. Single-cup brewers were utilized by 26% of past-day coffee users in 2013, up from 19% in 2012. Those between the ages of 25 and 39 who have children at home are the most likely to possess a single-cup maker. However, A growing number of health-conscious consumers, as well as the negative health impacts associated with excessive caffeine consumption, are likely to hinder coffee's growth and sales. Excessive, long-term caffeine usage (more than 500–600 mg per day) can lead to addiction and a slew of undesirable side effects in the body, as well as a risk factor for a variety of diseases when consumed in excess of five cups per day.

COVID-19 could have a positive impact on the direct-to-consumer (D2C) sector. Manufacturers foresee a customer shift toward RTD coffee as an alternative to freshly brewed coffee as a result of the pandemic, which might enhance the D2C market's sales performance even more. Due to increasing customer demand for non-perishables, especially coffee, during the quarter as a result of the COVID-19 pandemic, JM Smucker Co. stated in June 2020 that its fourth-quarter results for fiscal 2020 beat Wall Street's projections.

The market comprises different product types including RTD, Soluble or Instant Coffee, whole Beans, and Coffee Pod, and Capsules. However, the soluble or instant type under-product segment is projected to grow at the highest CAGR of 17.1% in the forecast period and also holds a maximum share of more than 40% in 2020. The convenience aspect is boosting the instant coffee category, as it is quick and easy to prepare. The convenience food sector is aided by most consumers' fast-paced lifestyles. The rising popularity of healthy beverages is driving inexperienced coffee users to instant coffee. Among packaging, the jars among all the packaging types dominated the market with about 37 percent share in 2020 while pouches and sachets are projected to grow at the fastest CAGR of 16.1% during the forecast period. 

North America, Europe, Asia Pacific, the Middle East and Africa (MEA), and South America are among the regions that make up the global market. Due to rising coffee consumption in the region's wealthier countries, Europe dominates the D2C industry with about 45.3% of the market share in 2020, according to the report analysis. However, the Asia Pacific region of the global D2C market is expected to grow at the fastest rate of 19.7% over the forecast period. Coffee is as much a part of the culture in Taiwan as it is in mainland China. Coffee has become a fashionable, western luxury among Chinese customers, with coffee shops lining the busy streets of cities like Beijing and Shanghai.

In June 2021, Sonnets by Tata Coffee, a new offering in the premium Roast and Ground coffee market, has been launched by Tata Consumer Products, the consumer products firm that brings together the Tata Group's major food and beverage activities under one roof. Tata Consumer's product portfolio is bolstered by this introduction, which marks the company's foray into the luxury coffee market. Another competitor, Blue Bottle Coffee will open its first shop in Central, Hong Kong, in April 2020. During COVID-19, the cafe was only open for takeout from 8 a.m. to 5 p.m. daily. The market also depends on mergers and collaborations. For instance, Starbucks Corporation and Nestlé announced a new collaboration in July 2021 that would deliver Starbucks Ready-to-Drink (RTD) coffee beverages to select countries in Southeast Asia, Oceania, and Latin America. By 2022, the firms plan to have these coffee beverages available to customers.

Other key players doing well in the market are JAB Holding, FinLav, The JM Smucker, and Kraft Heinz, Tata among others. The global Direct-to-consumer (D2C) coffee market is segmented as:

By Product Type

  • Ready to Drink
  • Soluble or Instant Coffee
  • Whole Beans
  • Coffee Pod and Capsules

By Packaging 

  • Jars
  • Pouches/Sachets
  • Capsules/Pods
  • Ready to Drink (RTD)

By Distribution Channel 

  • Online
  • Offline 

By Subscription Model 

  • Replenish
  • Access
  • Curation

By End-User 

  • Residential
  • Commercial
    • Coffee Shops and Restaurants
    • Offices
    • Education Institutes
    • Aviation & Transportation
    • Other Commercial Places

By Geography

  • North America
    • The U.S.
    • Canada
    • Mexico
  • Europe
    • The UK
    • Germany
    • France
    • Italy
    • Spain
    • Russia
    • Poland
    • Rest of Europe
  • Asia Pacific 
    • China
    • India
    • Japan
    • Australia & New Zealand
    • ASEAN
    • Rest of Asia Pacific
  • Middle East & Africa (MEA)
    • UAE
    • Saudi Arabia
    • South Africa
    • Rest of MEA
  • South America
    • Argentina
    • Brazil
    • Rest of South America

Developing economies offer lucrative opportunities for companies to expand their businesses. Several key players contributing to the market are: 

  • Bean Box
  • Blue Bottle
  • Craft Coffee
  • Gevalia
  • La Colombe Torrefaction, Inc.
  • Nestle
  • Pact Coffee
  • Peet’s Coffee
  • Spinn Inc.
  • Sudden Coffee
  • Tata Consumer Products Limited
  • Tandem Coffee
  • Vega Coffee
  • Other prominent players

For queries and customization requirements, discuss with our Research Analyst. 

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