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RTD COFFEE IN THE

PHILIPPINES
Euromonitor International
May 2014

RTD COFFEE IN THE PHILIPPINES

LIST OF CONTENTS AND TABLES


Headlines ..................................................................................................................................... 1
Trends .......................................................................................................................................... 1
Competitive Landscape ................................................................................................................ 1
Prospects ..................................................................................................................................... 2
Category Data .............................................................................................................................. 2
Table 1
Table 2
Table 3
Table 4
Table 5
Table 6
Table 7
Table 8
Table 9
Table 10
Table 11
Table 12

Off-trade Sales of RTD Coffee: Volume 2008-2013 ..................................... 2


Off-trade Sales of RTD Coffee: Value 2008-2013 ........................................ 3
Off-trade Sales of RTD Coffee: % Volume Growth 2008-2013 .................... 3
Off-trade Sales of RTD Coffee: % Value Growth 2008-2013 ....................... 3
NBO Company Shares of Off-trade RTD Coffee: % Volume 20092013 ............................................................................................................. 3
LBN Brand Shares of Off-trade RTD Coffee: % Volume 2010-2013 ............ 3
NBO Company Shares of Off-trade RTD Coffee: % Value 2009-2013......... 4
LBN Brand Shares of Off-trade RTD Coffee: % Value 2010-2013 ............... 4
Forecast Off-trade Sales of RTD Coffee: Volume 2013-2018 ...................... 4
Forecast Off-trade Sales of RTD Coffee: Value 2013-2018 ......................... 4
Forecast Off-trade Sales of RTD Coffee: % Volume Growth 20132018 ............................................................................................................. 5
Forecast Off-trade Sales of RTD Coffee: % Value Growth 2013-2018......... 5

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RTD COFFEE IN THE PHILIPPINES

RTD COFFEE IN THE PHILIPPINES


HEADLINES
RTD coffees total volume sales grow by 2% in 2013, while value sales reach Ps327 million
The category continues to serve a niche audience
The average unit price increases by 3% in 2013
Nestl Philippines Inc leads the category with a value share of 75%
RTD coffee will see a total volume CAGR of 3% over the forecast period

TRENDS
The local RTD coffee category continues to cater to a niche of young urban consumers who
want alternative soft drinks products to stay awake and refreshed during the day. Total
volume sales of RTD coffee inched up by 2% in 2013, supported by the expansion of chained
convenience store networks in the Philippines. It should be noted that convenience stores are
among the biggest distributors of RTD coffee. Imported brands are making their way through
convenience stores, especially those that are located in business hubs. By the end of 2013,
the RTD coffee category in the Philippines was worth Ps327 million.
With a lack of innovation and promotional efforts in the category, RTD coffee remained the
smallest soft drinks category in 2013. Compared with other popular products like carbonates
and RTD tea, RTD coffee is priced at least twice as high, limiting the target base to higherincome consumers. Furthermore, the popularity of consumer foodservice stores serving iced
coffee and tea also hinders retail sales of RTD coffee.
RTD coffees major consumers are young professionals who are more adventurous and are
willing to try alternatives in the market. RTD coffee often serves as a wake-me-up beverage
because of its caffeine content. Taken cold, RTD coffee is refreshing and is suitable for the
warm weather in the Philippines. The rise of specialist coffee shops has been instrumental in
the acceptance of RTD coffee as an alternative beverage among young professionals. RTD
coffee is considered as a more convenient, cheaper alternative to speciality coffee.

COMPETITIVE LANDSCAPE
Nestl Philippines Inc maintained its category leadership in RTD coffee in 2013 with an
estimated value sales contribution of 75%. The companys brand Nescaf Iced Coffee
remains the most popular brand among consumers, benefiting from the strong foothold of
Nescaf in instant coffee. Compared with other brands, Nescaf has a mid-range price and
has a wide range of flavours.
Other popular RTD coffee brands in the local market include imported ones like Pokka and
Coffee House. In 2013, it is estimated that Pokkas value sales accounted for 20% of overall
sales, while Coffee Houses was 2%. The only local brand in the country is Universal Robina
Corps Great Taste White, which is trying to capitalise on its success in the instant coffee
mixes category. Multinationals dominate the RTD coffee.
In 2013, PepsiCo International Inc ventured into RTD coffee through the introduction of its
Korean brand Lets Be. This new product is retailed in convenience stores and appeals to
middle- and higher-income young adults. Lets Be is available in 175ml packs and is
positioned as coffee break on-the-go. The smaller packaging allows the brand to be more

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affordable, though the drink is still among the highest priced in the category. Lets Be targets
college students and young professionals and is geared as an ideal drink for busy days when
consumers need an extra boost of energy.
Metal beverage cans are the most popular packaging types in RTD coffee. Brands like
Nescaf, Pokka, Malee, OKF and Lets Be are all available in metal beverage cans. On the
other hand, imported brand Magic Time Cafe Coffee Lovers Drink is available in glass
bottles. Local brands Great Taste White and Coffee Twist are packed in brick liquid cartons
and PET bottles, respectively.

PROSPECTS
RTD coffee will remain a niche in soft drinks in the forecast period. By the end of 2018, total
constant value sales are projected at Ps388 million, and the total volume CAGR will be 3%.
The consumption of RTD coffee will be limited to urban consumers, especially teens and
young adults who buy these products to try out something new. The expansion of major
convenience store chains Ministop and 7-Eleven can help in making these products more
available in key cities. However, the lack of advertising campaigns and promotional efforts
from manufacturers to push these products in the local market will contribute to the sluggish
growth.
The presence of more imported products in the category will give more alternatives to local
buyers in 2013-2018. Imported products are perceived to be of better quality, and
adventurous buyers are often encouraged to try out new brands and new flavours. Through
their strategic partnerships with foreign manufacturers, convenience store chains are
expected to bring more imported RTD coffee brands to the Philippines. However, among the
major challenges for retailers will be to ensure repeat purchases and to keep demand steady.
It has been noted that while consumers are quick to try out new brands, making consumption
frequent and regular is difficult.
Business process outsourcing will remain a sunshine industry in the Philippines, with doubledigit growth expected in the forecast period. RTD coffee can capitalise on this expected
growth by launching campaigns specifically targeted at this consumer base. Business process
outsourcing employees often have higher- than-average incomes and are able to afford RTD
coffee products. With convenience stores locating within business hubs, RTD coffee has good
potential to be the preferred caffeine drink of call centre employees.
RTD coffee will be threatened by the vibrant performance of RTD tea in the forecast period.
Compared with coffee, which capitalises on its flavours, RTD tea appeals to local consumers
increasing preference for healthier beverages. RTD tea caters to the same consumer base as
RTD tea and has been more aggressive in product launches and advertising. RTD coffee is
also more expensive and the availability of its products is limited to a few distribution
channels, thereby thinning the potential consumer base.

CATEGORY DATA
Table 1

Off-trade Sales of RTD Coffee: Volume 2008-2013

'000 litres

RTD Coffee

Euromonitor International

2008

2009

2010

2011

2012

2013

2,096.3

2,305.9

2,502.0

2,712.1

2,798.9

2,854.9

RTD COFFEE IN THE PHILIPPINES

Source:

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Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 2

Off-trade Sales of RTD Coffee: Value 2008-2013

Ps million

RTD Coffee
Source:

2008

2009

2010

2011

2012

2013

186.9

220.5

251.4

289.9

312.5

326.6

Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 3

Off-trade Sales of RTD Coffee: % Volume Growth 2008-2013

% volume growth

RTD Coffee
Source:

2012/13

2008-13 CAGR

2008/13 Total

2.0

6.4

36.2

Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 4

Off-trade Sales of RTD Coffee: % Value Growth 2008-2013

% current value growth

RTD Coffee
Source:

Table 5

2012/13

2008-13 CAGR

2008/13 Total

4.5

11.8

74.7

Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

NBO Company Shares of Off-trade RTD Coffee: % Volume 2009-2013

% off-trade volume
Company

2009

2010

2011

2012

2013

Nestl Philippines Inc


Pokka Corp
Coffee House USA
Universal Robina Corp
Others
Total

61.0
13.5
7.3
15.0
3.2
100.0

74.7
16.6
5.5
3.2
100.0

76.5
15.8
4.5
3.2
100.0

76.3
16.0
4.2
3.4
100.0

77.5
16.0
2.1
4.4
100.0

Source:

Table 6

Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

LBN Brand Shares of Off-trade RTD Coffee: % Volume 2010-2013

% off-trade volume
Brand

Company

2010

2011

2012

2013

Nescaf Iced Coffee


Pokka
Coffee House

Nestl Philippines Inc


Pokka Corp
Coffee House USA

74.7
16.6
5.5

76.5
15.8
4.5

76.3
16.0
4.2

77.5
16.0
2.1

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RTD COFFEE IN THE PHILIPPINES

Great Taste
Others
Total
Source:

Passport

Universal Robina Corp

3.2
100.0

3.2
100.0

3.4
100.0

4.4
100.0

Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 7

NBO Company Shares of Off-trade RTD Coffee: % Value 2009-2013

% off-trade value rsp


Company

2009

2010

2011

2012

2013

Nestl Philippines Inc


Pokka Corp
Coffee House USA
Universal Robina Corp
Others
Total

63.9
16.2
7.4
9.5
3.0
100.0

73.1
19.0
5.2
2.7
100.0

74.1
18.9
4.7
2.2
100.0

73.6
19.7
4.6
2.1
100.0

75.0
20.0
2.3
2.7
100.0

Source:

Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 8

LBN Brand Shares of Off-trade RTD Coffee: % Value 2010-2013

% off-trade value rsp


Brand
Nescaf Iced Coffee
Pokka
Coffee House
Great Taste
Others
Total
Source:

Company

2010

2011

2012

2013

Nestl Philippines Inc


Pokka Corp
Coffee House USA
Universal Robina Corp

73.1
19.0
5.2
2.7
100.0

74.1
18.9
4.7
2.2
100.0

73.6
19.7
4.6
2.1
100.0

75.0
20.0
2.3
2.7
100.0

Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 9

Forecast Off-trade Sales of RTD Coffee: Volume 2013-2018

'000 litres

RTD Coffee
Source:

2013

2014

2015

2016

2017

2018

2,854.9

2,920.0

2,976.6

3,057.3

3,157.6

3,274.7

Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 10

Forecast Off-trade Sales of RTD Coffee: Value 2013-2018

Ps million

RTD Coffee
Source:

2013

2014

2015

2016

2017

2018

326.6

336.3

345.5

357.3

371.8

388.2

Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

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RTD COFFEE IN THE PHILIPPINES

Table 11

Passport

Forecast Off-trade Sales of RTD Coffee: % Volume Growth 2013-2018

% volume growth

RTD Coffee
Source:

2017/18

2013-18 CAGR

2013/18 Total

3.7

2.8

14.7

Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 12

Forecast Off-trade Sales of RTD Coffee: % Value Growth 2013-2018

% constant value growth

RTD Coffee
Source:

2013-18 CAGR

2013/18 TOTAL

3.5

18.9

Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

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