Global Tariffs Benefit Instant Coffee in Western Markets

The demand for instant coffee in Western markets is steadily growing as skyrocketing global coffee prices are forcing many consumers to change their coffee habits, resulting in some choosing instant coffee.

Despite the recent decision of the US President Donald Trump to ease the existed 50 percent tariffs on Brazil (40 percent plus the original 10 percent] and its coffee exports, global coffee prices still remain high, which put additional pressure on producers, roasters and consumers, particular those from the US.

Regarding the tariffs, according to most analysts, Trump’s decision to impose a 50 percent tariff on Brazilian products – especially coffee – initially seemed “strange,” as Brazil accounts for 40 percent of the global coffee market. Eliminating Brazil as a coffee supplier to the United States is virtually impossible as Vietnam, another major supplier, grows Robusta, and US consumers drink mostly Arabica, the main producer of which is Brazil. Therefore, analysts noted, imposing such prohibitive tariffs would lead to only higher prices and mainly in the US.

The tariff wars, which caused global coffee prices to increase, have led to some serious structural changes in most Western coffee markets, particularly those in the EU and North America. One such change is a significant growth in demand for instant coffee.

These trends have been confirmed by independent analysts.

“This is a very real trend, and our data clearly supports it. In the US, instant coffee sales are up 15 percent year over year, adding nearly USD $200 million to the category and outpacing total packaged-coffee growth, which is up more than eight percent,” said Chris Costagli, vice president and F&B insights lead, NielsenIQ (NIQ). “Importantly, this growth isn’t driven by inflation alone. Unit sales are up more than five percent and household penetration has increased by 0.8 points, showing that more shoppers are actually buying instant coffee.”

According to Costagli, consumers are adapting their habits rather than giving up coffee altogether. He also added that more consumers are finding ways to stretch their budgets, and instant coffee delivers both value and convenience.

“Even with price increases, instant coffee remains roughly 30-50 percent less expensive than ground, whole bean, or pod formats. As prices rise, more consumers are re-discovering instant coffee as a practical everyday option that still fits their routines,” Costagli explained.

NielsenIQ data shows measurable growth in instant coffee consumption in the US. For the 52 weeks ending 4 October 2025, instant coffee dollar sales rose 15 percent, with unit sales up 5.2 percent.

“We also saw buyers [consumers] up four percent, purchase trips up nearly two percent, and spending per buyer up more than eight percent. These numbers indicate genuine demand, not just price inflation,” said Costagli.

Instant coffee now accounts for roughly eight percent of total packaged coffee growth. It’s gaining both new and repeat buyers, with 41 percent of its growth coming from new households that are spending more per trip and buying more often. In today’s economic climate, where 88 percent of consumers say prices are higher than a year ago and 94 percent are concerned about food-cost inflation, instant coffee’s value and accessibility are resonating more than ever,” Costagli added.

EU Consumption Still Growing

In addition to the US, there is also a growing demand for instant coffee in some key EU markets, such as Germany, France, Italy and Spain.

“Soluble coffee remains stable to growing, driven by significantly improved quality and sensory profiles in recent years,” said Holger Preibisch, CEO of the German Coffee Association. He said that consumers increasingly appreciate the convenience and simplicity of preparation, however, “a specialty segment is now emerging in this category.”

A similar situation is observed in France, where the demand for instant coffee has substantially increased since 2022. This is also due to soaring raw material costs and the particular sensitivity of local customers to the ever-growing inflation rates in the country.

According to a recent report in the French LSA paper, citing industry’s sources, for the seven months of the current year the overall decline of the French coffee sector was 1.1 percent in volume terms year-on-year basis. At the same time, the biggest decline was in ground coffee (-6.7 percent) and in coffee pods (-5.5 percent). This applies even to private labels, which are as expensive as some national brands because they pass on the price increases of Robusta or Arabica three months in advance, while national brands have more flexibility over time.

At the same time the dynamics in the instant coffee segment were generally better. Pascal Leleu, sales and marketing director of Cafés Méo, the sixth-largest coffee player in France, discussed the importance of good value for money among French customers. “More than ever, consumers are looking for good value for money, economical formats and consistency between product promise and price,” he said. This has been contributing to the growth of sales of instant coffee in the country.

Many consumers in France decided to reduce ground coffee purchases because ‘ideological’ reasons. Some of them believe the price increases do not benefit the farmers who live directly from their production. These consumers “don’t want to participate in these speculative practices.”

There is also a growing demand for instant coffee in Italy where until now, it has always been a residual segment of the market. According to official data of local industry associations, in Italy, instant coffee accounts for only four percent in volume and six percent in value (with Nestlé’s Nescafé brand being the leader), however the ever-increasing global coffee prices force local customers to pay more attention to certain instant coffee varieties.

The same is true for Spain where instant coffee along with decaf coffee have always been positioned as unpopular niches (despite the status of Spain as one of the EU’s leading instant coffee manufacturers); however with coffee prices rising more local consumers (especially younger ones) turn to instant coffee as an alternative to ground coffee. Analysts believe there is big growth potential for the instant coffee segment because Spain has one of the lowest per capita coffee consumption rates, although it is not significantly different from neighbouring countries like France or Portugal.

However, European retailers do not see a major shift by their customers to instant coffee varieties. For example, in Germany, the overall situation in the local coffee market remains generally stable.

According to Ramona Aigner, an official spokeswoman for the Schwarz Group, a German multinational company that operates several retail brands, and is the largest European retailer, coffee sales within the chain and its major brands remain stable across all the categories. “Our retail divisions, Lidl and Kaufland, offer their customers a large selection of strong brands and attractive own brands at reasonable prices. This also includes coffee. We see that our customers continue to make purchases across the entire coffee range,” she said.

Euromonitor International analysts also confirm the increasing demand for instant coffee among consumers in Western Europe and North America, with the biggest demand being observed in the premium varieties.

Euromonitor analyst, Ilaria Abagnale, said the rising demand for instant coffee in Western Europe has been led more by premium launches and innovation in the segment compared to trading down to more affordable coffee options. “Consumer demand [for] high quality coffee and barista experiences at home has led to innovation and surging demand for premium instant coffee. Evolving consumer expectations generated innovation in instant coffee such as flavoured [options],” she said. “Additionally, brands like Nestlé are launching cold-soluble coffee to meet demand for iced and specialty drinks. This is leading a revival in the segment.”