Coffee and tea shops in SG set for 1% CAGR through 2025

In 2023, such shops recorded a sales value above US$200m.

Sales of coffee and tea shops in Singapore will grow 1% between 2023 and 2025, data from Euromonitor showed.

In 2023, specialist coffee and tea shops in Singapore recorded a sales value above US$200m.

Euromonitor underscored that coffee and tea shops boomed “as several global coffee chains entered Asia Pacific countries expanding rapidly, particularly in Southeast  Asia.

In Singapore, China’s Luckin Coffee has expanded by more than 20 outlets in less than a year.  Kopi Kenangan also made its debut in Singapore.

Nathanael Lim, Beverage Insight Manager in Asia at Euromonitor International, however, warned that the “inevitable exit of some chains will be seen especially in a small market like Singapore.”

“Local consumers in the [SEA] region are sophisticated, open to trying new flavours and are willing to spend well for their daily caffeine fix.  With similar pricing strategies, flavour offerings and store formats, it remains to be seen whether they can all thrive in the long term. 
 
To thrive in the long term, Lim advised that regional coffee shops have “strong investor funding and launch innovations, whilst constantly  ensuring taste acceptability with affordable pricing to appeal to local consumers.”
“They will need to expand further into new channels such as vending, drive-thru and subscription services,” Lim added.