Coffee Capsules Market Size, Share, and Industry Analysis, By Coffee Type (Arabica and Robusta), By Packaging (Aluminum, Plastic, and Compostable), By Distribution Channel (Hypermarkets/Supermarkets, Specialty Stores, E-commerce, and Others), and Regional Forecast, 2024-2032

The coffee capsules, available in the global market through distribution channels, including supermarkets, specialty stores, e-commerce, and others, are made from Arabica and Robusta. These coffee capsules are packaged with either aluminum or plastic and designed for specific machines, such as Nespresso and Keuring. These machines have disk holders rather than porta filters with operable coffee capsules. The coffee capsule holds around 7 grams of coffee, the average size of one espresso shot.

Global coffee consumption has shown rapid growth in recent years. North America and Europe are the leading coffee-consuming regions in the global market. For instance, as per the International Coffee Organization, in 2023, North America and Europe accounted for around 47% of global coffee consumption. However, in recent years, the Asia Pacific region has grown rapidly due to the increasing coffee consumption among individuals in countries, such as India, Japan, China, and others. For instance, as per the Chief Operating Officer of Tata Starbucks, Adrit Mishra, the Indian coffee industry landscape has significantly transformed in the past decade and is set to show rapid growth.

Furthermore, the millennial generation drives global coffee consumption, with consumers aged 30 and above being the most significant consumers. However, the younger generation has shown rapid consumption growth. In addition, rapid westernization has fueled specialty coffee consumption, and consumers have shown a significant increase in specialty coffee consumption. Consumers are more inclined to try new flavors.

The busy lifestyle and consumers looking for foodservice coffee taste at home have driven the demand for coffee capsules across the globe. The busy lifestyle and westernization have increased consumption of espresso-based beverages, resulting in consumers purchasing coffee brewing machines, such as single-serve brewing machines, to cater to their interest in high-quality coffee at home. For instance, in 2022, as per the National Coffee Association, the consumption of espresso-based beverages has surged by around 30% in the U.S. Thus, the busy lifestyle, westernization, high demand for specialty coffee, and inclination toward convenience are fueling the global coffee capsule market growth.

The COVID-19 pandemic significantly impacted the global coffee market production and overall supply chain. This negative impact on the coffee industry's global coffee production and supply chain restrained global coffee capsule production.

Furthermore, the aluminum and plastic manufacturing industry faced a significant impact on a global scale. As these are the packaging materials of coffee capsules, the sector encountered considerable challenges in maintaining the production rate to cater to the global demand. In addition, closing borders further imposed difficulties in the international coffee capsule trade. However, coffee consumption at home surged as more individuals stayed home; thus, the demand for coffee products saw a significant spike in retail channels. Further, with the new social media trends, individuals were trying to make food service-style coffee at home, surging the demand for coffee machines, pods, and capsules. However, the supply chain challenges led to the demand and supply gap during the pandemic.

Key Insights

• The report covers the following key insights:


• Overview of Parent/Related Market


• Supply Chain Analysis


• Industry SWOT Analysis


• Key Industry Developments (Product Launches, Mergers, Acquisitions, and Partnerships)


•  Impact of COVID-19 on the Coffee Capsules Market

Segmentation

Analysis by Coffee Type

The coffee type segment is divided into arabica and robusta. The arabica holds a significant share of the global market. Arabica coffee's higher share is due to its mild taste, significant aroma, lower acidity rate, and higher availability.

Analysis by Packaging

The packaging segment is segregated into aluminum, plastic, and compostable. The aluminum segment holds a significant global market share and is expected to register a dominant share over the forecast period. However, the use of compostable is expected to grow rapidly over the years owing to the rapidly increasing demand for sustainable products among individuals.

Analysis by Distribution Channel

The distribution channel segment includes hypermarkets/supermarkets, specialty stores, e-commerce, and others. The hypermarkets/supermarkets segment holds a significant share in the global market, where e-commerce is set to have the highest CAGR over the forecast period owing to the higher convenience, rapid technological advancements, new product launches, and expansion of market players into online sales platforms. For instance, in August 2019, Nestle and Starbucks announced their collaboration with the launch of its all-new coffee capsules in China. The launch is designed to start with an e-commerce channel and gradually launch in offline stores.

Regional Analysis

The global market is geographically segmented into North America, Europe, Asia Pacific, South America, and the Middle East and Africa. Europe holds the leading global coffee capsules market share. The region is said to have the dominant position over the forecast period. However, with the rising coffee consumption in countries, such as China, India, and others, the Asia Pacific region is said to show the highest CAGR in the coming years. In addition, the high coffee production in South America and the Asia Pacific region also supports the Asia Pacific market. For instance, in 2023, as per the International Coffee Organization, the South America and Asia Pacific region accounted for 78% of global coffee production share.

North America is one of the significant regions in the global market owing to its high coffee consumption rate and increasing prevalence of coffee machines in this region. Thus, the higher per capita consumption of North America and Europe and the increasing demand for specialty coffee in Asia Pacific fuel the growth of the global coffee capsules market.

Key Players Covered

JDE peets N.V., Nestle S.A., Lavazza Group, Keuring Dr Pepper Inc., Fresh Brew Co., The Kraft Heinz Company, The J. M. Smucker Company, Coffeeza, Coffee Planet, and Inspire Brands Inc. are a few significant players in the global coffee capsules market.

Key Industry Developments

• In April 2024, Starbucks and Nespresso launched their all-new campaign to provide the Starbucks coffee taste at home through all-new Arabica coffee capsules, which are compatible with the Nespresso machine. The new campaign is focused on portraying Starbucks quality coffee with a wide range of flavors.


• In February 2024, Nestle S.A., one of the leading coffee manufacturers, announced the launch of its new organic coffee range. The latest product launched under the organic range is the Nespresso Brazil Organic Coffee Capsule. This new product is made from a sustainably sourced pure Arabica blend.


• In May 2021, Coffee Planet, a UAE-based coffee manufacturer, announced the launch of their all-new biodegradable coffee capsules. The company claims the new coffee capsules are 100% biodegradable and compostable, made with vegetable-based material, and filled with specialty-grade arabica.


• In April 2021, Coffeeza announced the launch of its new coffee machine and capsules to prepare café style coffee at home. As per the company, the new machine and capsules will assist individuals in preparing espresso, cappuccino, and latte at home. The capsules launched by the company include the company’s first single-origin coffee in Ethiopia and two other flavors called cremoso and forte.