HOT DRINKS IN ECUADOR - ANALYSIS

Country Report | Jan 2022

EXECUTIVE SUMMARY Market Sizes

Hot drinks in 2021: The big picture Sales of Hot Drinks
Retail Value RSP - USD million - Current - 2007-2026
During the pandemic, hot drinks category in general performed very well. Consumers’
increased time at home forced a shift from RTD drinks such as flavoured milk drinks and
soft drinks to products in this category. The closure of foodservice outlets at points over 190 Forecast
the last two years of the review period also encouraged a shift from foodservice to 200
retail consumption.
Some hot drinks are also used preventively or to soothe health symptoms, with this
further benefiting sales. At the slightest respiratory symptom, many consumers opt for 150
a hot drink and believe this to decrease the likelihood of getting sick. In addition, some
sought to ease respiratory symptoms through the consumption of hot drinks. Tea
particularly benefited from this trend, with fruit/herbal tea and green tea in particular
seeing strong retail volume sales in the last two years of the review period. 100

2021 key trends

Ecuador has had a new president since May 2021, with the presidential campaign 50
targeting the vaccination of nine million Ecuadorians in the first 100 days of
government. The plan started well, and the government has one of the highest
acceptance rates in several decades. By the end of 2021, over 70% of the population 0
were fully vaccinated. Increased immunity as a result of the vaccination campaign is 2007 2021 2026
expected to enable the economy to achieve a faster recovery.
This helped support economic confidence, even though many consumers faced
negative financial repercussions as a result of the COVID-19 pandemic. As a result, Sales Performance of Hot Drinks
many treated themselves to higher-quality hot drinks, particularly in fresh and instant % Y-O-Y Retail Value RSP Growth 2007-2026
coffee and fruit/herbal tea. This supported retail volume and current value growth and
also supported an increase in unit price. 3.4% Forecast
20%
Competitive landscape
One of the main companies in instant coffee, Solubles Instantáneos CA, has been 15%
acquired by BIA Coffee, which is part of the same conglomerate as CBC. This acquisition
will enable Solubles Instantáneos’ products to be marketed together with those of
PepsiCo. The company is also expected to benefit from seeing its distribution boosted 10%
as a result of its acquisition, with this giving it access to the complete distribution chain
that Tesalia CBC has in Ecuador.
The strike that took place during June in Colombia affected the logistic chain of the 5%
brands of this country distributed in Ecuador. This is the case of brands such as Café
Buendía, which was close to being out of stock in some categories of its product.
0%
Local players have significant value share in Ecuador, particularly in tea and coffee. The
Good Commercial Practices law has been instrumental in providing the environment
for smaller local players to compete. The law requires that at least 15% of retailers’ -5%
2007 2021 2026
suppliers are small and medium-sized players to encourage a fair, competitive
landscape and discourage monopolies. This means that an increasing number of local
players have entered hot drinks, increasing competition and broadening the range of
premium and locally sourced products, as well as organic offerings. Global player
Sales of Hot Drinks by Category
Nestlé however leads overall hot drinks due to the strength of its iconic brand,
Retail Value RSP - USD million - Current - 2021 Growth Performance
Nescafé.
Coffee
Retailing developments 143.6
Tea
Modern grocery retailers are very popular among consumers when buying hot drinks. 12.3
The relatively low price of these products allows consumers to make planned
Other Hot Drinks
purchases and keep hot drinks in stock at home. Some players are furthermore turning 33.7
their attention away from traditional grocery retailers, anticipating a future significant
-5% 0% 15%
increase in demand in modern grocery retailers. In 2021, modern grocery retailers
however lost share to traditional grocery retailers, due to many consumers preferring HOT DRINKS 189.6 CURRENT % CAGR % CAGR
to shop locally as a result of COVID-19 concerns. YEAR % 2016-2021 2021-2026
GROWTH
E-commerce saw dynamic growth during the pandemic in the last two years of the
review period. The main supermarkets in the country now offer e-commerce with
home delivery via platforms such as Rappi, DomiciliosYa or Tipti. This enables users to
access all the products that they offer. After the sales boom seen in 2020 during the
first months of the pandemic, the channel’s share stabilised in 2021, remaining at a
higher level than in 2019. This suggests that many first-time e-commerce shoppers

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attracted during the pandemic will continue to use the channel going forward. Competitive Landscape
Foodservice vs retail split Company Shares of Hot Drinks
Foodservice sales saw a negative impact due to the pandemic in the last two years of % Share (NBO) - Retail Value RSP - 2021
the review period, with a dramatic volume decline in 2020 followed by only partial
Nestlé Ecuador SA 19.8%
recovery in 2021. 2021 started with fewer restrictions on consumer foodservice
operators than in 2020. However, at the end of April new restrictions were imposed Solubles Instantáneos CA 12.7%
that imposed a curfew for all weeknights and during weekends in general, with only Pydaco Cia Ltda 10.7%
key workers able to leave their homes. These rules lasted one month and again limited
sales in cafés and restaurants, preventing full recovery for foodservice volume sales. Colcafé SA 6.9%
El Café CA 5.9%
In the first half of 2021, social distancing measures were also still in place in major
cities, resulting in reduced capacity in restaurants and cafés. These measures have Productos Minerva SA 5.6%
been progressively softened from July 2021 onwards but nonetheless also impacted Pusuquí Grande & Anexos ... 2.3%
foodservice demand in the year as a whole.
Corporación Favorita CA 2.2%
What next for hot drinks? Cía Nacional de Chocolat... 2.2%

Impressive advances in the vaccination process in 2021 are expected to result in 2022 Nutrexpa SL 2.2%
proving a much more positive year in terms of COVID-19, with a growing number having Universal Sweet Industri... 1.9%
immunity. This will enable foodservice volume sales to recover to a significant extent,
CETCA Cia Ecuatoriana de... 1.8%
with social distancing and capacity restrictions easing or being removed altogether.
Foodservice volume is thus set to see a strong double-digit CAGR in the forecast period, Markecsa SA 1.4%
following on from the decline seen during the review period, and by 2024 will exceed Terrafertil SA 0.9%
2019 foodservice volume sales.
Hierbas Naturales y Medi... 0.7%
However, with consumers spending less time at home, there will be a slight drop in
Agroinsolman SA 0.3%
retail volume sales in the forecast period. However, due to consumers increasingly
prioritising quality when buying hot drinks, current value sales are expected to see a Badía SPICEF, Inc 0.1%
slight growth in the forecast period. Ecuatoriana Industrial C... 0.1%
Economic factors will continue to be important during the forecast period. Ecuador Others 22.4%
entered the COVID-19 pandemic with a number of economic problems, with the
pandemic further complicating its recovery. Consequently, while there will be rising
interest in premium options among mid- and high-income consumers, many will
remain highly price-sensitive. Consumers are expected to become increasingly
informed and will compare prices and pack sizes as they make their purchasing Brand Shares of Hot Drinks
decisions and seek to save money. % Share (LBN) - Retail Value RSP - 2021

Nescafé 11.0%
DISCLAIMER
Café Buendía 10.7%
Forecast closing date: 15 November 2021 Doncafé 8.6%

Report closing date: 7 January 2022 Colcafé 6.9%

Minerva 5.6%
Analysis and data in this report give full consideration to consumer behaviour and
market performance in 2021 and beyond as of the dates above. For the very latest Café Oro 4.1%
insight on this industry and consumer behaviour, at both global and national level, Ricacao 3.6%
readers can access strategic analysis and updates on www.euromonitor.com and via the
Passport system, where new content is being added on a systematic basis. Nesquik 3.4%
Si Café 3.0%
SOURCES Pres 2 2.9%
Hornimans Manzanilla 2.3%
Sources used during the research included the following:
Chocolisto 2.2%
Summary 1 Research Sources
Juan Valdez 2.2%
Official Sources Banco Central de Ecuador Cola Cao 2.2%
Bols a de Va lores Gua ya quil
Cocoa La Universal 1.9%
Servicio de Renta s Interna s
Milo 1.6%
Superintendencia de Cia s
Sweet & Coffee 1.4%
Trade Associations As ocia ción Na ciona l de Exporta dores de Ca fé (ANECAFE)
As ocia ción Na ciona l de Fa brica ntes de Alimentos & Bebida s (ANFAB) Nature's Heart 0.9%
Cons ejo Ca feta lero Na ciona l (COFENAC) Hornimans 0.8%
Trade Press América Economía Others 24.8%
America Reta il
5-Year Trend
Club Da rwim Increasing share Decreasing share No change
Dia rio Expres o
El Comercio
El Dinero
El Fina nciero
El Telegra fo
El Tiempo
Explored
Info Ca fes
Ins ights
Primicia s

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 Official Sources Banco Central de Ecuador
Revis ta Líderes
Revis ta Vis ta zo
Other Sources Da ta s ur
ESPE

Source: Euromonitor Interna tiona l

© Euromonitor Interna onal 2022 Page 3 of 3