Market Research Reports - Ken Research Costa Rica Hot Drinks Market Research Report

Polarized Hot Drinks Market Costa Rica: Flavour-Innovation & Globalisation lead growth: Ken
Research
Costa Rica is a famous paradise in Central America, mainly among scenery and escapade lovers.
It has vast magnitude of national parks and private reserves that cover around 25% of its
territory. It is located in a privileged region of the world that allows it to have a large
concentration of animal species native to other countries in northern Central America and some
from South America.
According to "Hot Drinks in Costa Rica", the demand for hot drinks reflects a polarised
environment, where high-end indulgent products gained additional momentum among
economically advantaged consumers, while value for money set the pace with many others who
looked for lower-end alternatives. Within such a context specific brand loyalty lost relevance to
more innovative proposals, capable of offering better unit prices or higher quality to buyers
according to their budgets.
At maturity levels for these hot beverages, the main manufacturers continue to opt for
increasing the differentiation of their products, using different types of quality certificates (in
the case of fresh coffee varieties), and using flavour innovation and preparation convenience to
promote more incipient categories such as instant coffee mixes and coffee pods. Same is the
case for tea and other hot drinks, which tend to focus on the promotion of the functional
properties of their ingredients to promote additional consumption amongst a broader range of
local buyers from all socioeconomic groups.
In a globalised commercial context where international brands benefit from free trade
agreement incentives to compete in Costa Rica, the emergence of imported products grew
across most hot drinks including other hot drinks, tea, coffee pods and instant coffee, where
their point-of-sale presence and pricing levels gained relevance. The only exception was fresh
coffee, which remained dominated by local brands that continued to benefit from historic
consumer preferences due to the strong coffee culture that prevails in Costa Rica. However,
more local roasters and domestic coffee players continued to import cheaper coffee from
neighbouring countries to decrease manufacturing costs and become more price-orientated.
While manufacturers in more mature categories such as fresh coffee focused on increasing the
availability of value for money proposals, product specialisation influenced less developed
categories, particularly in the case of instant coffee and tea. A premiumisation inclination
developed among upper-income buyers (such as in the case of speciality teas and herbal
infusion mixes), while flavour innovation and indulgence claims opened up new opportunities
for incipient categories such as instant coffee mixes and higher-end powder cocoa drinks.