Coffee pods contain seven grams of coffee, as opposed to only one or two grams in coffee capsules. Secondly, they are environmentally friendly. Coffee pods can be easily recycled and can even serve as natural fertilizer for plants. Additionally, coffee pods are cheaper than capsules. Unlike capsules, which contain a powdery material, coffee pods are reusable and work in any pod filter.
The global coffee pods and capsules market was valued at US$ 27.94 Bn in 2021 and is forecast to reach a value of US$ 45.4 Bn by 2030 at a CAGR of 7.11% between 2022 and 2030.
Europe held dominant position in the global coffee pods and capsules market in 2021, accounting for 53% share in terms of volume, followed by North America and Asia Pacific, respectively.
Figure 1. Global Coffee Pods and Capsules Market Value Share (%), By Region, 2021
|Base Year:||2021||Market Size in 2021:||US$ 27.94 Bn|
|Historical Data for:||2017 to 2020||Forecast Period:||2022 to 2030|
|Forecast Period 2021 to 2030 CAGR:||7.11%||2030 Value Projection:||US$ 45.4 Bn|
Nestlé SA, JAB Holding Company, The Kraft Heinz Company, Inspire Brands Inc. (DUNKIN’ BRANDS), Luigi Lavazza SpA, Starbucks Corporation, Gloria Jean's Coffees, and Strauss Group
|Restraints & Challenges:||
Growing consumption of single-serve coffee in household is driving growth of the global coffee pods and capsules market. An increasing number of consumers are willing to purchase coffee machines to recreate the coffee shop experience at home is playing significant role in overall development of the market. Key players are introducing coffee pods compatible with popular machines, such as Nespresso which is again fostering market growth. According to the Mordor Intelligence analysis, in 2018, Folgers had the highest household penetration, with 33.60% of households purchasing this brand of single-cup coffee in the United States.
The demand for organic food and beverage around the globe, particularly tea and coffee, is growing at a faster pace owing to changes in lifestyle pattern, as well as increased expenditure of food and beverage. This will favour the market growth. Moreover, growing awareness regarding healthy foods, changes in meal patterns and existing food habits, and the desire to taste new products is further boosting the demand for specialty and organic coffee pods and capsules.
Figure 2. Global Synthetic Rope Market Value Share (%), By Types, 2021
Environmental concern associated with the plastic capsules that end up in the landfills every year, contributing to the growing plastic pollution is expected to restrict market growth. The plastic in coffee pods takes more than 500 years to break down, releasing harmful amounts of methane gas as it does so.
The high cost of coffee pods is one of the biggest challenges adversely affecting the overall growth of the market, as using coffee pods is more expensive than using ground coffee or whole coffee beans. For instance, Nescafe Dolce Gusto PRELUDIO costs USD 4.85, while Nescafe Coffee-Classic (100-gram jar) costs USD3.52.
Growing demand for coffee pods and capsules across developing regions is expected to provide lucrative growth opportunities in the near future. For instance, over the past years, traditional drip has been on a decline, whereas automatic espresso and pod and capsule machines have displayed a steady growth and gained more market share in China, which is primarily a tea drinking country.
Advent of recycling plastic capsules is projected to offer significant growth opportunities for the market players over the forecast period. For instance, recently in 2021, Nespresso launched its first coffee capsules made using 80% recycled aluminum. These capsules were made from 95% recycled material earlier this year in March. Further, by the end of 2021, Nespresso targets to have all machines sold in this new packaging, which, in turn, will boost the market growth of pods and capsules.
Market Trends/Key Takeaways:
New product launch by key players is expected to be a key trend in the market. For instance, in April 2022, Bluestone Lane has launched a range of Nespresso-compatible coffee pods amid rising customer demand for the at-home coffee format.
Growing number of partnership and agreements among key players will favour the market growth. For instance, in November 2021, Nestlé and Jacobs Douwe Egberts UK partnered to create first of its kind recycling program for coffee pods.
Coffee Pods and capsules are a fast growing market. The popularity of these products is attributed to their convenience and affordability. The main difference between capsules and coffee pods lies in their durability. Unlike the paper surface of coffee pods, capsules can withstand prolonged storage. However, after the due date of the product, the coffee pods can begin to degrade, making them susceptible to microscopic agents. Coffee capsules are used in single-cup machines and percolators. They contain enough coffee for one serving. Usually, coffee capsules are placed inside a pod in a coffee machine. The machine then injects hot water inside the pod, spinning the coffee capsule and letting the water and coffee brew together. The water then flows out through special holes in the pod and travels to the cup as a foamy drink.
Growing demand for specialty and organic coffee pods and capsules coupled with the launch of fully recyclable coffee pods are major factor driving growth of the coffee pods and capsules market. Moreover, increasing online sale of pods and capsule is again fostering market growth. Furthermore, key players are focusing on enhancing packaging to attract consumers is also anticipated to augment market growth. Additionally, growing sale of single-serve coffee pods will further favor the market growth. For instance, JAB Holdings-controlled Keurig Dr. Pepper reported a 6% increase in the retail consumption of its single-serve coffee pods during the first quarter of 2020
On the other hand, high cost of the coffee pods is expected to limit the adoption of coffee pods and capsules
Key features of the study:
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