Prolongation of involvement of organic items to push growth in hot drinks market: Estonia


In 2016, the retail price of hot drinks rose as the market price of raw material like coffee, tea, cocoa had increased, which led to increase in cost of producing hot drinks. The spending habits of majority of Estonian are pragmatic and cautious. The sales generated by hot drinks company was done through discounting strategies in both off trade and on trade channel. The consumer urges to seek unique alternatives and booster curiosity in niche products because the market of hot drinks in Estonia is saturated with well established brands. The young population in Estonia, which is major population of country, is spending awareness by providing mainstream products and using brands they use on daily basis.

According to the market research report “Hot Drinks in Estonia “, in recent years, there is boost in Baltics as there is change in trend to healthy and active lifestyle. People are spending more time outside home by cycling or on foot as to commute a healthier way of lifestyle. Citizens are becoming more conscious about their dietary issues and about their ingredients and composition used in manufacturing of a product that they consume. The retailers are organizing frequent health-themed campaign so that to spread awareness of healthy eating and advertising their health related products.

In 2016, the leading portion is not changed and international companies again grabbed it. They continue to capture large scale of hot drinks in terms of sales in Estonia. Niche retailers, in order to attract shoppers’ attention in terms of originality, quality, healthy ingredients, and social responsibility were presenting their product in non-conventional ways. The company also tends to advertise online as there is good grip of Information Technology and wireless internet connection available throughout the company. They are also using social media to introduce new products.

Manufacturers are also focusing on the packaging style to attract consumers and involving natural ingredients, exotic flavors and domestic production, which is considered as a high quality product. The key factor of growth and success of hot drinks are the continuation of involvement of organic items.

Price is one of the key factors of amount of sales of a particular product. There is increase in price of hot drink categories in 2016. The global market is being estimated to remain volatile and in future, it is expected that price will increase which is a threat of international as well as domestic retailers because it can lead to slower growth, especially in the on-trade channel. On the other hand, the consumer and its preference is increasing rapidly and the highest index among the Baltic States in Estonia. The prices of hot drink are out of the step of the 80% population of Estonia. Despite the price limitation, it has been reported that there is growth in 2016 accounted by manufacturers, retailers, and this growth in future years as well.

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