Coffee in Mexico

Coffee in Mexico
Euromonitor International
November 2022
COFFEE IN MEXICO Passport i
LIST OF CONTENTS AND TABLES

KEY DATA FINDINGS.................................................................................................................. 1
2022 DEVELOPMENTS ............................................................................................................... 1
High prices impact company and consumer behaviours ........................................................... 1
Packaging developments offer consumers purchasing options ................................................ 1
Premiumisation remains A key trend in coffee despite price concerns ..................................... 1
PROSPECTS AND OPPORTUNITIES......................................................................................... 2
Instant coffee continues its expansion while premiumisation offers A more dynamic growth
avenue ...................................................................................................................................... 2
Growing focus on digital sales and marketing .......................................................................... 3
New price increases on the horizon .......................................................................................... 3
CATEGORY DATA ....................................................................................................................... 3
Table 1 Retail Sales of Coffee by Category: Volume 2017-2022 .............................. 3
Table 2 Retail Sales of Coffee by Category: Value 2017-2022 ................................. 4
Table 3 Retail Sales of Coffee by Category: % Volume Growth 2017-2022 ............. 4
Table 4 Retail Sales of Coffee by Category: % Value Growth 2017-2022 ................ 4
Table 5 Retail Sales of Fresh Ground Coffee Pods by Hard vs Soft: % Volume
2017-2022 .................................................................................................... 5
Table 6 NBO Company Shares of Coffee: % Retail Value 2018-2022 ...................... 5
Table 7 LBN Brand Shares of Coffee: % Retail Value 2019-2022 ............................ 5
Table 8 Forecast Retail Sales of Coffee by Category: Volume 2022-2027 ............... 6
Table 9 Forecast Retail Sales of Coffee by Category: Value 2022-2027 .................. 7
Table 10 Forecast Retail Sales of Coffee by Category: % Volume Growth 2022-
2027 ............................................................................................................. 7
Table 11 Forecast Retail Sales of Coffee by Category: % Value Growth 2022-
2027 ............................................................................................................. 7
© Euromonitor International
COFFEE IN MEXICO Passport 1
COFFEE IN MEXICO
KEY DATA FINDINGS
▪ Retail value sales rise by 14% in current terms in 2022 to MXN44.0 billion
▪ Fresh coffee beans is the best performing category in 2022, with retail value sales increasing
by 31% in current terms to MXN567 million
▪ Nestlé México SA de CV is the leading player in 2022, with a retail value share of 55%
▪ Retail sales are set to rise at a current value CAGR of 6% (2022 constant value CAGR of 2%)
over the forecast period to MXN59.9 billion
2022 DEVELOPMENTS
High prices impact company and consumer behaviours

Coffee in Mexico experienced a difficult year in 2022. Spot prices for green coffee increased
exponentially over the year, compared with 2021. This price development benefited many
Mexican coffee growers, but significantly increased the costs for coffee companies and the
prices of their brands. Companies had to raise prices significantly during 2022 to keep pace with
their higher production and operating costs.
In response, players tried to introduce price increases in stages, in order to absorb some of
the impact of the rises and minimise the negative impact on retail and foodservice volume sales
in the category. This was an important strategy as consumers have shown significant elastic
behaviours and deprioritised coffee consumption as prices become more expensive. Moreover,
prices increased across the board, so no particular company or brand benefited. The household
penetration of coffee remained high, supported by a deep-rooted and strong coffee consumption
culture in the country, but the intensity and frequency of purchases tended to decline.
Packaging developments offer consumers purchasing options

One way both companies and consumers dealt with higher prices was to experiment with
different packaging options. On the offer side, companies prioritised smaller packages that
allowed a lower out of pocket expense for consumers, while maintaining the high unit price of
the product. Smaller presentations are becoming the norm in coffee in Mexico, as consumers
look for more affordable options. More premium brands were also offered in smaller
presentations to allow consumers the opportunity to purchase an affordable luxury.
Meanwhile, consumers that could afford it looked to take advantage of the price situation by
purchasing the largest-sized package available. This was usually offered at a better unit price,
while enabling consumers to reduce the frequency of their purchases. This behaviour made it
difficult for smaller brands as consumers tended to look for established, well-known or higher-
end brands to maximise their price advantages and minimise potential regrets over missed
opportunities in a volatile price environment. On the other hand, it also benefited more
affordable brands that offered the lowest unit prices available, including private label options
perceived to be of the same or similar high quality as brands.
Premiumisation remains A key trend in coffee despite price concerns

Despite price concerns, premiumisation remained a key trend in coffee in Mexico in 2022.
Owners of instant and fresh coffee brands looked constantly for ways to improve their
positioning and gain price advantages. The premiumisation trend was supported by Costa
Coffee’s recent entry in the market, and the ongoing strategies for Nespresso and Nescafé and
other competitors in the space. These brands were to the fore of the efforts to develop more
sophisticated product offerings, including, but not limited to the introduction on new flavours,
new coffee origins, speciality coffees and more. This trend is expected to continue to support
retail value sales growth, despite the tough economic situation and declining volumes.
In line with the robust premiumisation trend in coffee in Mexico, flavour innovations continued
to help drive sales in the category. Consumers in Mexico are generally willing to try new flavours
in food and drinks, with this tendency also extending to coffee. With this in mind, coffees with
new and different flavours are very popular among both men and women. It has become a good
strategy for attracting younger consumers, in particular. Fresh ground coffee pods is proving to
be a particularly innovative area in terms of new flavours, but towards the end of the review
period the ranges of a growing number of brands of regular instant coffee and coffee mixes
were extended with new flavours.
The most popular flavours were vanilla and caramel, but the latest launches have also
included Irish cream, chocolate, amaretto and hazelnut, among others. There is also a popular
traditional coffee in Mexico known as café de olla (pot coffee, made in a crock pot). This fresh
ground coffee is made with cinnamon and sweetened with piloncillo instead of sugar. Nestlé
México SA de CV and Café Tostado de Exportación SA de CV launched their own versions of
this flavour in a regular instant coffee version towards the end of the review period under their
Nescafé and Los Portales brands, respectively. New product development alongside strong
distribution and competitive pricing are expected to help Nestlé extend its already strong lead in
coffee in retail volume terms and maintain its dominance in retail value terms over 2022.
PROSPECTS AND OPPORTUNITIES
Instant coffee continues its expansion while premiumisation offers A

more dynamic growth avenue
Despite Mexico’s strong coffee culture, most of the consumption still comes from instant
coffee. During 2022, Nestlé, the biggest instant coffee producer in Mexico, expanded its
production capabilities in the country, with the dual aim of covering the domestic market, but
also generating and serving increasing demand in Central America. This provided a clear signal
of the expansion plans for instant coffee in the short to medium term. The challenge for instant
coffee players is that its penetration is already high, with this type of coffee present in almost all
Mexican households. Different, less mature growth avenues could spring from an increase in
the per capita consumption of premium coffee, luring consumers away from soft drinks and
other beverages and consumption occasions and/or by tapping into higher consumer health
awareness.
Organic and decaffeinated coffee could, therefore, offer new areas of development. New
product development is required across coffee as players look to re-energise the category and
attract new consumers to the country’s strong, but still developing coffee culture. Building on the
health and wellness trend, players are likely to look to explore new avenues and new
opportunities. For example, it will be important for all companies to try to educate consumers
about the benefits and advantages of decaffeinated coffee, in order to increase awareness of
the category and help attract consumers who may be looking to reduce their caffeine intake for
health reasons.
Organic coffee is a growing trend in other markets, such as the US, but it is also expected to
see rising consumption in Mexico over the forecast period. There are already several local
producers offering organic coffee, although they will need to improve their communications with
consumers, if they are to develop a stronger foothold in the market.
The recovery of the foodservice channel is also predicted to bring new innovations into the
category. For example, independent and chained specialist coffee shops are likely to launch
new and innovative coffee flavours and combinations, such as coffee with lavender, taro or
peanuts. The more successful flavours in foodservice are likely to inspire new product
development through the retail channel. Having entered fresh ground coffee pods at the end of
the review period, the Starbucks brand is also well placed to benefit from the recovery of the
foodservice channel. With a large chain of specialist coffee shops across Mexico, Starbucks
should help drive demand for fresh ground coffee pods among consumers looking to recreate
the Starbucks experience at home.
Growing focus on digital sales and marketing

Coffee is set to continue to exist and expand in an increasingly digital world. Retailers and
branded players within coffee are likely to continue to focus on improving their e-commerce and
digital strategies and processes, building on the strong gains seen since the outbreak of COVID-
19. Coffee experienced challenging years in 2021 and 2022, with most players forced to make
changes and adjustments in order to remain competitive. This activity included investing in e-
commerce and digital marketing. This pattern is predicted to continue in the forecast period as
players look to identify the best ways to reach and engage with consumers. This is expected to
see more forays and investments in digital marketing, increased engagement on social media
platforms and, potentially, the use of social influencers to help connect with a younger audience
of coffee consumers. Through e-commerce, more small regional producers are set to be able to
increase their brand awareness and find it quicker and easier to reach more regions in Mexico
and even develop exports.
Despite the increased focus on digital sales and marketing, store-based retailers remain
crucial to sales of coffee. While convenience stores and vending are seeing improved sales as
foot traffic increases and consumers return fully to the workplace, channels like discounters and
hypermarkets should benefit from competitive pricing and a growing private label offer.
New price increases on the horizon

Unfortunately for coffee in Mexico, more price pressures are on the horizon. Beyond the
slowdown in rise of international prices of green coffee towards the end of 2022, a considerable
amount of economic uncertainty remains present in the category. In response, producers are
likely to try to maintain growth strategies to shield themselves from any surprises in the forecast
period. Brand owners will need to continue to try to balance prices and brand equity to be able
to grow value sales, while limiting the damage of declines or slowdowns in volume sales.
At the same time, owners of economy brands aim to capitalise on consumers trading down in
an attempt to boost volume sales. However, stronger competition in the category brings pricing
pressures. In a still very tough economic situation, private label coffee has a unique opportunity
to capture market share in the forecast period. This especially applies to private label ranges
that consumers already perceive to be high quality offerings. Therefore, private label enters the
forecast period well placed to gain retail volume and value shares in coffee in Mexico.
CATEGORY DATA
Table 1 Retail Sales of Coffee by Category: Volume 2017-2022
Tonnes
2017 2018 2019 2020 2021 2022
- Instant Coffee Mixes 7,442.6 7,575.2 7,752.3 7,314.1 7,628.1 7,424.0

- Instant Standard Coffee 35,941.1 36,285.8 37,209.6 38,777.6 39,792.8 38,075.8
Instant Coffee 43,383.8 43,861.1 44,962.0 46,091.7 47,420.9 45,499.8
-- Standard Fresh 14,972.9 15,265.4 15,571.9 16,249.3 14,690.2 12,993.0
Ground Coffee
-- Fresh Ground Coffee 668.1 673.2 732.0 802.8 1,215.0 1,425.7
Pods
- Fresh Ground Coffee 15,641.0 15,938.6 16,303.9 17,052.1 15,905.2 14,418.7
- Fresh Coffee Beans 1,014.5 1,033.0 1,062.8 1,110.6 1,142.8 1,139.3
Fresh Coffee 16,655.5 16,971.6 17,366.7 18,162.7 17,048.0 15,558.0
Coffee 60,039.3 60,832.7 62,328.6 64,254.4 64,468.9 61,057.8
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources
Table 2 Retail Sales of Coffee by Category: Value 2017-2022
MXN million
2017 2018 2019 2020 2021 2022

Instant Coffee 22,397.2 23,802.5 24,866.8 27,942.0 29,347.1 32,817.1
-- Standard Fresh 5,463.6 5,841.2 6,173.3 6,736.5 6,929.0 7,582.0
Ground Coffee
-- Fresh Ground Coffee 635.6 663.4 742.4 871.6 1,764.3 3,002.8
Pods
- Fresh Coffee Beans 342.8 367.1 382.6 406.7 432.7 566.6
Fresh Coffee 6,442.0 6,871.7 7,298.4 8,014.8 9,126.1 11,151.4
Coffee 28,839.2 30,674.2 32,165.2 35,956.8 38,473.2 43,968.5
Table 3 Retail Sales of Coffee by Category: % Volume Growth 2017-2022
% volume growth
2021/22 2017-22 CAGR 2017/22 Total
- Instant Coffee Mixes -2.7 -0.1 -0.2

- Instant Standard Coffee -4.3 1.2 5.9
Instant Coffee -4.1 1.0 4.9
-- Standard Fresh Ground Coffee -11.6 -2.8 -13.2
-- Fresh Ground Coffee Pods 17.3 16.4 113.4
- Fresh Ground Coffee -9.3 -1.6 -7.8
- Fresh Coffee Beans -0.3 2.3 12.3
Fresh Coffee -8.7 -1.4 -6.6
Coffee -5.3 0.3 1.7
Table 4 Retail Sales of Coffee by Category: % Value Growth 2017-2022
% current value growth
2021/22 2017-22 CAGR 2017/22 Total
- Instant Coffee Mixes 13.8 8.2 48.6

- Instant Standard Coffee 11.5 7.9 46.2
Instant Coffee 11.8 7.9 46.5
-- Standard Fresh Ground Coffee 9.4 6.8 38.8
- Fresh Ground Coffee 21.8 11.7 73.5
- Fresh Coffee Beans 30.9 10.6 65.3
Fresh Coffee 22.2 11.6 73.1
Coffee 14.3 8.8 52.5
Table 5 Retail Sales of Fresh Ground Coffee Pods by Hard vs Soft: % Volume 2017-
2022
% retail volume
2017 2018 2019 2020 2021 2022
Hard Coffee Pods 97.7 97.5 97.6 97.5 98.0 98.0

Soft Coffee Pods 2.3 2.5 2.4 2.5 2.0 2.0
Total 100.0 100.0 100.0 100.0 100.0 100.0
Note: Totals may not sum to 100% due to data rounding
Table 6 NBO Company Shares of Coffee: % Retail Value 2018-2022
% retail value rsp

Company 2018 2019 2020 2021 2022
Nestlé México SA de CV 57.7 57.4 56.8 57.0 54.8

Bia Foods Investments Inc - - - 5.7 5.7
Sabormex SA de CV 5.0 5.1 5.0 4.9 4.8
Tostadores y Molinos de 1.8 1.8 1.7 1.6 2.6
Café Combate SA de CV
Café el Marino SA de CV 1.7 1.7 1.5 1.3 1.4
Intercafé SA de CV 0.7 0.7 0.7 0.7 0.7
Procafecol SA 0.1 0.1 0.1 0.2 0.6
Café Internacional de 0.7 0.7 0.3 0.2 0.1
Córdoba SA de CV
Café Tostado de 4.6 4.5 4.5 - -
Exportación SA de CV
Garcomex SA de CV 0.9 0.9 0.9 - -
XKMEX SA de CV 0.3 0.3 0.3 - -
Starbucks de México SA - - - - -
de CV
Private Label 2.4 2.4 2.7 2.8 2.7
Others 24.0 24.3 25.4 25.4 26.6
Total 100.0 100.0 100.0 100.0 100.0
Table 7 LBN Brand Shares of Coffee: % Retail Value 2019-2022
% retail value rsp

Brand (GBO) Company (NBO) 2019 2020 2021 2022
Nescafé (Nestlé SA) Nestlé México SA de CV 31.7 32.3 31.8 29.3

Taster's Choice Nestlé México SA de CV 8.7 8.8 8.6 8.1
(Nestlé SA)
Dolca (Nestlé SA) Nestlé México SA de CV 7.1 6.6 6.3 5.6
Nespresso (Nestlé SA) Nestlé México SA de CV 0.1 0.5 2.8 4.9
Nescafé Decaf Nestlé México SA de CV 6.7 6.1 5.4 4.8
(Nestlé SA)
Los Portales (Café Bia Foods Investments Inc - - 4.6 4.5
Tostado de
Exportación SA de CV)
Café Combate Tostadores y Molinos de 1.8 1.7 1.6 2.6
Café Combate SA de CV
Café Legal Sabormex SA de CV 2.3 2.2 2.1 2.0
Nescafé Dolce Gusto Nestlé México SA de CV 2.1 1.8 1.6 1.7
(Nestlé SA)
El Marino Café el Marino SA de CV 1.7 1.5 1.3 1.4
Internacional Sabormex SA de CV 1.5 1.5 1.5 1.3
Garat Sabormex SA de CV 0.6 0.7 0.7 0.8
Blasón (Herdez SAB Intercafé SA de CV 0.7 0.7 0.7 0.7
de CV, Grupo)
Café de Olla Bia Foods Investments Inc - - 0.5 0.6
(Garcomex SA de CV)
Juan Valdez Procafecol SA 0.1 0.1 0.2 0.6
(Federación
Nacional de
Cafeteros de
Colombia)
Oro Sabormex SA de CV 0.5 0.5 0.6 0.5
Nescafé Cappuccino Nestlé México SA de CV 0.6 0.5 0.5 0.4
(Nestlé SA)
Cafe Punta del Cielo Bia Foods Investments Inc - - 0.3 0.3
Santa Fé Bia Foods Investments Inc - - 0.3 0.3
Tradición de Córdoba Café Internacional de 0.7 0.3 0.2 0.1
Córdoba SA de CV
Café Mexicano Sabormex SA de CV 0.1 0.1 0.1 0.1
Starbucks (Nestlé SA) Nestlé México SA de CV 0.4 0.1 0.1 0.1
Los Portales Café Tostado de 4.4 4.5 - -
Café de Olla Garcomex SA de CV 0.6 0.5 - -
Cafe Punta del Cielo XKMEX SA de CV 0.3 0.3 - -
Santa Fé Garcomex SA de CV 0.3 0.3 - -
Declase Café Tostado de 0.1 0.0 - -
Kasinka Café Tostado de - - - -
Diplomat (Nestlé SA) Nestlé México SA de CV - - - -
Starbucks Starbucks de México SA - - - -
(Starbucks Corp) de CV
Private label Private Label 2.4 2.7 2.8 2.7
Others Others 24.3 25.4 25.4 26.6
Total Total 100.0 100.0 100.0 100.0
Table 8 Forecast Retail Sales of Coffee by Category: Volume 2022-2027
Tonnes
2022 2023 2024 2025 2026 2027

Instant Coffee 45,499.8 44,977.9 45,127.7 45,583.1 46,250.5 47,157.2
-- Standard Fresh 12,993.0 11,756.3 11,016.2 10,663.8 10,703.4 11,088.1
Ground Coffee
-- Fresh Ground Coffee 1,425.7 1,504.6 1,552.9 1,568.6 1,574.2 1,601.6
Pods
- Fresh Coffee Beans 1,139.3 1,214.0 1,279.0 1,338.0 1,396.5 1,454.2
Fresh Coffee 15,558.0 14,474.8 13,848.1 13,570.4 13,674.1 14,143.9
Coffee 61,057.8 59,452.8 58,975.8 59,153.4 59,924.6 61,301.1
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
Table 9 Forecast Retail Sales of Coffee by Category: Value 2022-2027
MXN million
2022 2023 2024 2025 2026 2027

Instant Coffee 32,817.1 33,370.3 34,259.6 35,287.5 36,198.4 37,013.5
-- Standard Fresh 7,582.0 7,219.1 6,984.5 6,873.7 7,014.2 7,387.4
Ground Coffee
-- Fresh Ground Coffee 3,002.8 3,398.5 3,586.6 3,690.0 3,760.0 3,834.9
Pods
- Fresh Coffee Beans 566.6 637.0 694.6 744.8 785.4 826.3
Fresh Coffee 11,151.4 11,254.6 11,265.7 11,308.5 11,559.6 12,048.6
Coffee 43,968.5 44,625.0 45,525.3 46,596.1 47,758.0 49,062.1
trade sources
Table 10 Forecast Retail Sales of Coffee by Category: % Volume Growth 2022-2027
% volume growth
2022/23 2022-27 CAGR 2022/27 Total
- Instant Coffee Mixes -3.9 -1.0 -4.7

- Instant Standard Coffee -0.6 1.0 5.3
Instant Coffee -1.1 0.7 3.6
- Fresh Ground Coffee -8.0 -2.5 -12.0
Fresh Coffee -7.0 -1.9 -9.1
Coffee -2.6 0.1 0.4
trade sources
Table 11 Forecast Retail Sales of Coffee by Category: % Value Growth 2022-2027
% constant value growth

2022/2023 2022-27 CAGR 2022/27 Total
- Instant Coffee Mixes -0.7 0.6 2.8

- Instant Standard Coffee 2.1 2.7 14.3
Instant Coffee 1.7 2.4 12.8
- Fresh Ground Coffee 0.3 1.2 6.0
Fresh Coffee 0.9 1.6 8.0
Coffee 1.5 2.2 11.6
trade sources

Coffee in Mexico

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Coffee in Mexico

LIST OF CONTENTS AND TABLES

High prices impact company and consumer behaviours

Packaging developments offer consumers purchasing options

Premiumisation remains A key trend in coffee despite price concerns

PROSPECTS AND OPPORTUNITIES

Instant coffee continues its expansion while premiumisation offers A

Growing focus on digital sales and marketing

New price increases on the horizon

2017 2018 2019 2020 2021 2022

- Instant Coffee Mixes 7,442.6 7,575.2 7,752.3 7,314.1 7,628.1 7,424.0

Table 2 Retail Sales of Coffee by Category: Value 2017-2022

- Instant Coffee Mixes 2,923.6 3,126.9 3,283.2 3,418.2 3,817.4 4,345.1

Table 3 Retail Sales of Coffee by Category: % Volume Growth 2017-2022

- Instant Coffee Mixes -2.7 -0.1 -0.2

Table 4 Retail Sales of Coffee by Category: % Value Growth 2017-2022

% current value growth

2021/22 2017-22 CAGR 2017/22 Total

- Instant Coffee Mixes 13.8 8.2 48.6

Hard Coffee Pods 97.7 97.5 97.6 97.5 98.0 98.0

Table 6 NBO Company Shares of Coffee: % Retail Value 2018-2022

% retail value rsp

Nestlé México SA de CV 57.7 57.4 56.8 57.0 54.8

Table 7 LBN Brand Shares of Coffee: % Retail Value 2019-2022

% retail value rsp

Nescafé (Nestlé SA) Nestlé México SA de CV 31.7 32.3 31.8 29.3

Table 8 Forecast Retail Sales of Coffee by Category: Volume 2022-2027

- Instant Coffee Mixes 7,424.0 7,137.5 6,925.3 6,868.9 6,906.8 7,076.4

Table 9 Forecast Retail Sales of Coffee by Category: Value 2022-2027

- Instant Coffee Mixes 4,345.1 4,313.1 4,235.0 4,252.2 4,329.3 4,466.3

Table 10 Forecast Retail Sales of Coffee by Category: % Volume Growth 2022-2027

- Instant Coffee Mixes -3.9 -1.0 -4.7

Table 11 Forecast Retail Sales of Coffee by Category: % Value Growth 2022-2027

% constant value growth

- Instant Coffee Mixes -0.7 0.6 2.8

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