Coffee Pods and Capsules Market Growth Analysis | 2023-2028

Market Insights

The coffee pods and capsules market was estimated at USD 25.1 billion in 2022 and is likely to grow at a CAGR of 6.89% during 2023-2028 to reach USD 37.54 billion in 2028.

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What are coffee pods and capsules?

Coffee pods and capsules are tiny cups, with or without filters. They are filled with pre-portioned ground coffee and are sealed with food-grade coverings. Being ready to brew in special machines makes them popular. A coffee pod is a type of coffee-making method that helps to prepare coffee. A wide range of coffee pods exist in the market such as paper coffee pods, K-cups, and T-discs to prepare coffee.

Key Players

Some of the major coffee pods and capsule manufacturers are-

• Nestle S.A.
• Starbucks Corporation
• JAB Holding Company
• The Kraft Heinz Company
• Dunkin' Brands Group, Inc.
• Luigi Lavazza S.p.A
• Gloria Jean's Coffees
• Strauss Group Ltd.
• Dualit Limited
• The J.M. Smucker Company

Market Dynamics

The coffee pods and capsules market has experienced significant growth due to several key factors. Below given are a few –

• Rise in demand for ready-to-drink coffee beverages – Consumers are looking for quick and easy-to-make refreshments nowadays. Several market players are investing in such coffee pods and capsules to serve this growing demand. For instance, in April 2023, Nespresso and Starbucks teamed up to launch a limited-edition double espresso coffee capsule - the Nespresso | Starbucks ReserveTM Remix Blend.
• Innovative coffee machines and brewing technologies – Innovations in coffee machines are juicing up the coffee pods and capsules market. For instance, LG Electronics announced its first-ever capsule coffee machine – Duobo by LG Labs- in July 2023, which possesses a special coffee brewing process that enhances its taste and it also offers personalized flavor, the group claims.
• Growing online retailing and coffee subscription services – Online retailing and coffee subscriptions are a great way to try different beans and blends. eCommerce is growing rapidly and coffee is one of the top sellers. Coffee is considered one of the most popular drinks in the world, with an estimated 2 billion cups being consumed every day. A report suggests, that rather than heading out for their espressos, people are using subscription coffee services to easily access and purchase coffee pods and capsules.

Segment Analysis

By Product Type

Based on the product type, the market is segmented as pods and capsules. The capsules segment held the larger share of the market in 2022, whereas the pod segment is expected to register faster growth during the forecast period. Increased demand for instant non-alcoholic drinks is the key factor behind the dominance of the coffee capsules segment in the market. Coffee producers majorly choose coffee capsules, owing to their suitability, comfort of use, and a wide diversity of coffee products and machinery.

By Coffee Type

Based on the coffee type, the coffee pods and capsules market is segmented as traditional and decaf. The traditional segment held the larger share of the market in 2022, owing to a high consumer preference for traditional coffee over decaf. Traditional coffee beans are high in caffeine content and provide better taste and flavor.

Regional Insights

In terms of regions, Europe is estimated to be the largest market for coffee pods and capsules during the forecast period, with Germany, the UK, France, and Russia being the countries with lucrative growth opportunities. The dominance of the region’s market is mainly due to the increasing demand for new products with technological upgrades, and rising demand for easy-to-use coffee capsules and pods, along with the adoption of automatic bean-to-cup machines. The rising number of coffee bars, small roasters, small local brands, and baristas in the region, along with the increasing interest of consumers in specialty coffee and K-Cups is likely to drive the region’s market during the forecast period.

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Market Segmentation

This report studies the market covering a period of 12 years of trend and forecast. The report provides detailed insights into the market dynamics to enable informed business decision-making and growth strategy formulation based on the opportunities present in the market.

The market is segmented into the following categories.

By Product Type

• Pods
• Capsules

By Distribution Channel Type

• On Trade
• Off Trade

By Coffee Type

• Traditional
• Decaf

By Packaging Type

• Conventional Plastic
• Bioplastics
• Fabric

By Region

• North America (Country Analysis: the USA, Canada, and Mexico)
• Europe (Country Analysis: Germany, France, the UK, Russia, and the Rest of Europe)
• Asia-Pacific (Country Analysis: China, Japan, India, and the Rest of Asia-Pacific)
• Rest of the World (Sub-Region Analysis: Latin America, the Middle East, and Others)

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Recent News & Developments

NOV 2022: Nespresso, pioneer of premium single-serve coffee, unveils new range of home compostable coffee capsules- A groundbreaking, paper-based, home compostable coffee capsule provides an alternative means to savor sustainably sourced, premium-quality coffee without sacrificing the premium coffee experience. These innovative capsules, which are compatible with Nespresso Original machines, will debut in France and Switzerland starting in the spring of 2023.

NOV 2022: Nescafé Dolce Gusto launches Neo, its next-generation 'Coffee Shop at Home' experience- Nescafé Dolce Gusto introduces Neo, the next-generation coffee machines and pods from the brand. Neo brings together top-notch quality, advanced technology, and a strong commitment to sustainability, delivering the ultimate coffee shop experience right at home. In a pioneering move by Nestlé, Neo's innovative line of coffee pods is crafted from paper, making them home-compostable and reducing packaging waste by 70% (by weight) compared to current capsules.

OCT 2022: Nestle to Acquire Seattle’s Best Coffee- Nestlé is set to acquire Seattle’s Best Coffee from Starbucks Corp., headquartered in Seattle. The specific terms of the transaction have not been disclosed. As part of this acquisition, Nestlé made a payment of $7.15 billion to Starbucks. In 2021, the combined global sales of Starbucks products distributed by Nestlé amounted to 3.1 billion Swiss francs ($3.09 billion). Nestlé's products are available in 80 markets worldwide.

In September 2022, Swiss coffee company CoffeeB introduced an innovative coffee product it dubs "the next generation of single-serve coffee." These groundbreaking compressed coffee balls utilize seaweed-based wrappers instead of traditional aluminum or plastic, ensuring the capsule maintains its shape.

In August 2022, Tim Hortons® unveiled Espresso Capsules designed to be compatible with Nespresso® Original Line Coffee Machines. The lineup includes a variety of flavors and intensities to cater to Canadian coffee preferences. This range encompasses a rich and refined Classic Lungo, an intense and full-bodied Bold Espresso, a light and fruity Bright Espresso, and a balanced and smooth Decaf Espresso.

JULY 2021: JDE Peet’s to acquire Campos Coffee, a specialty coffee leader in Australia- JDE Peet’s (EURONEXT: JDEP) and Campos have jointly announced that JDE Peet’s is set to acquire Campos Coffee. The transaction, contingent upon a few specific pre-closing conditions, is anticipated to conclude in July 2021. The precise details of the agreement have not been disclosed.

Report Features

This report provides market intelligence in the most comprehensive way. The report structure has been kept such that it offers maximum business value. It provides critical insights into the market dynamics and will enable strategic decision-making for the existing market players as well as those willing to enter the market.

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Research Methodology

This report offers high-quality insights and is the outcome of a detailed research methodology comprising extensive secondary research, rigorous primary interviews with industry stakeholders, and validation and triangulation with Stratview Research’s internal database and statistical tools.

More than 1,000 authenticated secondary sources, such as company annual reports, fact books, press releases, journals, investor presentations, white papers, patents, and articles have been leveraged to gather the data.

We conducted more than 10 detailed primary interviews with the market players across the value chain in all four regions and with industry experts to obtain both qualitative and quantitative insights.

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Company Profiling

• Detailed profiling of additional market players (up to 3 players)
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Market Segmentation

• Current market segmentation of any one of the product types by distribution channel type.

Competitive Benchmarking

• Benchmarking of key players on the following parameters: Product portfolio, geographical reach, regional presence, and strategic alliances.

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