The U.S. hot drinks market size was estimated at USD 17,356.6 million in 2017. The increasing usage of the products as gourmet beverages with attributes such as specially crafted as per the non-commercial consumer segment requirements, is anticipated to drive growth. Changing consumer preferences towards the consumption of nutritious hot beverages over carbonated drinks is likely to drive the growth.

The industry is likely to grow on account of increasing awareness among the emerging young population regarding the health benefits of tea and coffee to reduction of lifestyle related diseases such as obesity, blood pressure, diabetes and others.

U.S. is a developed economy with high amount of investment noted in research & development for processing and manufacturing of the raw materials used for the production of beverages. The established industry players are engaged in establishing a roastery along with the distribution center for attracting a larger pool of customers.

Factors such as growing awareness about the sustainable sourcing of products and creating shared value for the industry players are expected to drive the production. Producers are adopting various regulations and certifications namely FSSC 22000, GRAS, USDA Organic, Fairtrade, Kosher, HACCP, GMP, to ensure quality and selling ability of products in an attempt to lure large base of customers.

The industry is characterized by the presence of large number of substitutes, namely fruit juices, toddy and other beverages. However, with lesser advertisement of the substitute products and diminished propensity of the buyer towards the consumption of substitutes, the products are likely to lose share to hot beverages.

The rising number of commercial industry players and increased demand for the hot beverages among the population is expected to create an increased risk of labor exploitation in the plantations. The exploitations include lesser pay, unhygienic conditions, abuses and reduced resources along with non-existent work contract increasing the apathy of the workers which is presumed to hamper the U.S. hot drinks market growth over the forecast period.

The increasing market demand for hot beverages among the millennials populations is leveraged by the growing demand for artificial sweeteners. The market of artificial sweeteners is expected to be growing at a CAGR of 3.5%, in terms of revenue over the forecast period with consumer base shifting from naturally sourced sugar and corn syrup to artificial flavors for perceived health benefits.

The major industry players in the U.S. hot drinks market are engaged in extensive and robust supply chain operations with large number of distributors, namely grocery stores, mass merchandisers, supermarkets, dollar shops, retail stores, food brokers and online stores constituted in the country for the growing demand.

The companies present in the U.S. hot drinks market use innovative technologies for roasting of the beans to enhance the flavor and to reduce the holding times which is presumed to increase the customer base. These technologies process the ingredients at lower temperatures, avoiding the evaporation of volatile component and increasing the demand among the consumers in the country.

The coffee consumption in the U.S. is expected to step up the prices of coffee beans with massive changes registered in the demand supply balance of the commodity. In addition, there is a setback in the coffee plantations, restricting the supply and elevating the price pressure on the industry players. The tightening of the coffee market is presumed to hamper the market growth over the forecast period.

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Further key findings from the report suggest:

• U.S. brewed tea industry segment is expected to be the fastest-growing segment, in terms of revenue, registering a CAGR of 4.1% from 2018 to 2025 owing to the superior health benefits offered by the product as compared to other cold brewed and carbonated beverages.

• The brewed coffee segment is expected to be the largest in the economy with a value of USD 14,241.1 million in 2017, on account of the presence of a large number of industries offering varieties of coffee products available in the country

• The fastest growing tea segment is anticipated to be fruit/herbal tea with a CAGR of 6.1%, in terms of revenue from 2018 to 2025, on account of growing awareness among the consumers regarding the ill effects of other beverages as compared to herbal tea

• Key companies in the industry are involved in the production in accordance with the requirements listed by the commercial and non-commercial consumers. The companies involved in the product manufacture operate across the country through extensive distribution networks

About Grand View Research

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