Out-of-home Coffee Market Size, Share & Trends Growth [2032]

Report Description

Out-of-home Coffee Market

The global out-of-home coffee market size was USD 38 Billion in 2023 and is projected to reach USD 49.4 Billion by 2032, expanding at a CAGR of 3.6% during 2024–2032. The market growth is attributed to factors such as consumer preferences, lifestyle trends, economic conditions, and the availability of coffee outlets in various locations.

The term out-of-home coffee relates to the global sales of coffee by the hotels, restaurants, and institutions (HRI) sector. The surge in online coffee orders by numerous customers has augmented home coffee consumption. Conversely, the availability of ready-to-drink coffee has notably reduced coffee consumption outside the home. Consumers are increasingly opting for out-of-home coffee experiences in their daily routine. Market players are enhancing their competitive positions by incorporating innovations such as new coffee pod varieties, easily accessible coffee options, premiumization strategies, and robust marketing campaigns for essential coffee brands into their business models.

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The third-wave coffee movement emphasizes craftsmanship, sustainability, and appreciation for coffee as an artisanal product. This trend has elevated the status of coffee as a culinary experience and fostered a culture of coffee connoisseurship. Coffee retailers are focusing on creating immersive and engaging experiences for customers, such as coffee tastings, brewing workshops, and themed pop-up events. These experiences help build brand loyalty and differentiate coffee establishments in a competitive market.

• In February 2022, Nestle SA, the largest packaged-food company globally, reported that its coffee division was the primary driver of organic sales growth in the previous year. This growth was fueled by the increased demand from consumers who were still working from home.

Impact of AI on the Out-of-home Coffee Market

AI-powered software solutions optimize various aspects of coffee shop operations, such as staff scheduling, supply chain management, and equipment maintenance. AI helps businesses reduce costs, increase productivity, and maintain consistent service quality by automating repetitive tasks and streamlining workflows. AI tools analyze customer data to segment audiences, identify high-value customers, and personalize marketing campaigns. This enables coffee retailers to target promotions, discounts, and loyalty rewards effectively, fostering customer engagement and brand loyalty.

Out-of-home Coffee Market Dynamics

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Major Drivers

Increasing working-age population has a significant impact on the presence and popularity of coffee houses, consequently driving growth in the global out-of-home coffee market. The demand for spaces that cater to the needs of this demographic, including places where individuals work, socialize, or simply relax during their leisure time, is increasing with the growing working-age population . Coffee houses provide a suitable environment for such activities, offering a comfortable setting with amenities such as free Wi-Fi, cozy seating areas, and a range of beverage options to suit different tastes and preferences.

Existing Restraints

Increasing trend towards home brewing presents a challenge to the out-of-home coffee market, as some consumers choose to make coffee at home rather than visit coffee shops, especially during periods of remote work or social distancing. Availability of high-quality coffee beans, brewing equipment, and instructional resources for home brewing has increased in recent years. Shifts in consumer preferences and lifestyle trends, such as a preference for alternative beverages or a growing interest in non-coffee options, pose challenges for traditional coffee establishments. Coffee retailers are required to adapt to evolving consumer tastes and preferences to remain competitive in the market.

Emerging Opportunities

Growing popularity of premium coffee among affluent and motivated consumer presents opportunities for the market expansion and diversification. Coffee businesses target upscale demographics, such as urban professionals, millennials, and health-conscious consumers, by curating premium coffee menus tailored to their preferences and lifestyle needs. Consumer preference for premium coffee encourages innovation and creativity within the industry. Coffee shops experiment with innovative flavor profiles, signature blends, and experiential brewing methods to differentiate their offerings and capture the attention of discerning consumers seeking novel and exciting coffee roaster experiences.

Scope of the Out-of-home Coffee Market Report

 The market report includes an assessment of the market trends, segments, and regional markets. Overview and dynamics are included in the report. 

Regional Outlook

In terms of region, out-of-home coffee market is classified as Asia Pacific, North America, Latin America, Europe, and the Middle East & Africa. Europe dominated the global out-of-home coffee market share in 2023, due to immense cultural significance, where cafe culture has deep historical roots. Cities in Europe are known for their bustling coffee scenes, with iconic cafes serving as social hubs where people gather to socialize, work, or simply enjoy a cup of coffee.

Europe boasts a diverse coffee culture, with each country having its own unique traditions, brewing methods and preferences. While espresso-based drinks such as cappuccinos and lattes are popular across the region, there is also growing interest in ready-to-drink coffee, artisanal roasts, and alternative brewing methods.

The out-of-home coffee market in North America is growing, due to the vibrant coffee shop culture across the region, with a wide variety of establishments ranging from independent cafes to multinational chains. Coffee shops serve as social hubs where people gather to socialize, work, study, or simply enjoy a cup of coffee, contributing to the vibrancy of the out-of-home coffee market. Coffee consumers enjoy a diverse range of coffee beverages, from classic drip coffee and espresso drinks to specialty concoctions such as cold brew, nitro coffee, and flavored lattes. Coffee shops cater to a wide range of tastes and preferences, offering customized options and seasonal variations to attract customers

• In January 2022, data from the National Coffee Association (NCAUSA) showed a rise in coffee intake among individuals aged 18-24. Moreover, approximately 66% of adults in the US regularly enjoy coffee, with out-of-home consumption accounting for 28% of coffee consumption across the globe.

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Out-of-home Coffee Market Segment Analysis

Product Analysis

On the basis of product, the out-of-home market is classified as instant coffee, portioned coffee, and roasted coffee. The instant coffee segment is projected to hold a large market share during the projected period. Instant coffee is a convenient and popular option in the out-of-home coffee market. It is made from brewed coffee that has been freeze-dried or spray-dried to create a soluble powder or granules. Instant coffee offers quick preparation and a long shelf life, making it suitable for on-the-go consumption in settings such as offices, hotels, and vending machines.

The portioned coffee segment is expected to register a considerable CAGR in the coming years. Portioned coffee refers to single-serving coffee products, typically in the form of coffee pods or capsules. These pre-portioned servings contain ground coffee sealed within individual pods, which are compatible with various coffee machines, including espresso machines and single-serve brewers. Portioned coffee offers convenience, consistency, and a variety of flavor options, making it popular in both residential and commercial settings.

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End-use Analysis

Based on end-use, the out-of-home market is divided into HoReCa and commercial. The HoReCa segment held a large share of the market in 2023. HoReCa stands for hotels, restaurants, and cafes. This segment includes establishments where coffee is served to customers as part of their dining or hospitality experience. HoReCa outlets encompass a wide range of establishments, including hotels, fine dining restaurants, casual dining restaurants, cafes, bistros, and other foodservice establishments. Coffee served in HoReCa outlets is typically prepared by trained baristas or service staff and include a variety of specialty coffee beverages, brewed coffee, and espresso-based drinks. HoReCa establishments often prioritize quality, presentation, and customer experience to enhance the overall dining or hospitality experience.

The commercial segment is expected to expand in the coming years. The segment includes where coffee is served or consumed outside of the home. This category encompasses a diverse range of settings such as offices, workplaces, corporate campuses, educational institutions, healthcare facilities, transportation hubs, and recreational venues. Coffee consumption in commercial settings occurs through various channels, including office coffee services, vending machines, self-service stations, and catering services. Commercial coffee offerings often focus on convenience, efficiency, and meeting the needs of large groups or busy environments.

Distribution Channel Analysis

Based on distribution channel, the out-of-home coffee market is segregated into direct and indirect. The direct segment held a large share of the market in 2023. In direct distribution channels, coffee products are supplied directly from the producer or manufacturer to the end-user or consumer. This distribution model involves direct sales channels such as company-owned retail outlets, coffee shops, online sales platforms, or direct-to-consumer subscriptions. Direct distribution allows producers to have high control over the marketing, pricing, and branding of their coffee products as well as direct interaction with customers to gather feedback and build relationships.

The indirect segment is expected to register a considerable CAGR in the coming years. In indirect distribution channels, coffee products are distributed through intermediaries or third-party distributors before reaching the end-user or consumer. This distribution model involves wholesalers, distributors, brokers, or retail partners who purchase coffee products from producers and then distribute them to various out-of-home establishments such as cafes, restaurants, hotels, offices, and other commercial outlets. Indirect distribution allows producers to reach a wide audience and access different market segments through established distribution networks, while also benefiting from the expertise and logistical support of intermediaries.