The soluble coffee market is dominated by two multinational firms:
Nestlé and Kraft Foods. One or the other or both have a presence in every main
consumer market and indeed probably in many producing country markets as well.
In addition there is often a third large supplier in each main market, for
example in the United States Procter & Gamble enjoys a reasonably large
share of the market while the Ueshima Coffee Company (UCC) is of some
significance in Japan. The larger companies manufacture soluble coffee in their
own plants and rarely obtain soluble coffee from outside suppliers.
Nestlé also operates a small number of soluble processing plants in producing
countries, primarily aimed at supplying the domestic market there, but also
nearby regional markets.
The scope for outside manufacturers lies in supplying product for:
Most supermarket chains prefer to buy from a specialist packer
rather than direct from origin, and usually insist that bulk supplies are
repacked in retail jars. For all practical purposes, an origin supplier seeking
to enter the own label market would be best advised to trade through a
specialist packer in a consuming country, especially as in most cases the
finished retail product is a blend of coffee from several sources.
There are several specialist packers of soluble coffee for own label product in
consuming countries. Some operate their own processing plants, but also often
purchase soluble coffee for blending from other sources to fulfil contracts
that are beyond their capacity, or when imported soluble is cheaper than their
own product. Other specialist packers have no processing capacity of their own
and merely blend and repack product from other sources.
The retail market for soluble coffee has three general segments:
The total market for soluble coffee is showing signs of strong
growth after being relatively flat throughout the decade of the 1990’s.
Estimated consumption in countries that do not produce coffee was
22.4 million bags GBE in 2009, of which 28%
was manufactured in producing countries.