Thailand’s instant coffee market is expected to grow by 5% this year as Nescafé Thailand plans to allocate 620 million baht for brand communication advertising.
Jojo Dela Cruz, business executive officer of Nestlé (Thai) Ltd’s coffee and creamer business unit, said that in this year’s first quarter the value of the country’s instant coffee market was 5.7 billion baht, up 5% when compared with the corresponding period last year, while the value of the ready-to-drink coffee market reached 3.8 billion baht, up 10% from the corresponding period last year.
Per-person consumption of coffee in Thailand is about 340 cups a year on average.
“Nescafé holds more than a 50% market share in Thailand’s instant coffee market,” Mr Dela Cruz said.
The company plans to invest 620 million baht in marketing activities this year, he said.
Even though the Thai instant coffee market continues to grow, driven by consumer lifestyle trends, coffee production globally is decreasing due to unprecedented challenges posed by climate change.
Mr Dela Cruz said climate change and the shift towards growing alternative economic crops are the reasons for reduced supply in Thailand.
“It is estimated that global coffee supply could be reduced by up to 50% by 2050,” he said.
However, Mr Dela Cruz did not disclose the extent to which costs will rise due to declining coffee bean production.
The company is driving a sustainable future for Thailand’s coffee sector through regenerative agriculture under the Nescafé Plan 2030.
The Nescafé Plan distributes high-yielding coffee plantlets together with training and technical assistance that the company claims will increase coffee yields and diversify farm production, leading to better incomes for farmers while mitigating risks from climate change.
Moreover, the company is committed to purchasing coffee beans from farmers based on global market prices.
In the second half of the year, the company will launch new products focusing on the iced coffee segment, as iced coffee accounts for 47% of overall coffee consumption in Thailand.
Mr Dela Cruz did not reveal the company’s target in terms of market value this year, but said the overall instant coffee market was worth 30 billion baht in 2023, expanding by 3-5% from the previous year.
