The biggest influences on sales of hot drink in 2022 were high inflation and the devaluation of the dinar. While consumption in the most popular category of tea was not hugely affected as tea is still affordable for most, steep unit price rises undermined demand for coffee, especially in the on-trade.
While the socioeconomic situation in Iraq has improved in recent years since the cessation of armed conflict, it is safe to say that the country is still facing multiple challenges. 2022 saw adverse economic and political conditions pile the pressure on consumers, investors and all companies operating in the country, with high inflation and political stasis contributing to a very difficult scenario for the hot drinks industry.
Demand for coffee and tea continue to increase in Iraq during 2022, despite the impact of high inflation and this can be seen as a reflection of the essential status of coffee and, in particular, tea among the local population. Rising prices put significant pressure on on-trade sales of tea and coffee during the year, with foodservice volume declines register than each category.
Although the choice of coffee among Iraqi consumers is often quite heavily influenced by income level, this does not apply to tea. Tea is widely available at low prices and is affordable for consumers of all income levels.
High inflation led to significant changes been seen in the operations of the leading players in Iraq’s hot drinks industry during 2022. In particular, the devaluation of the Iraqi dinar against the US dollar and various other benchmark global currencies meant that imported products became far more expensive, with logistics and distribution costs increasing significantly.
The forecast period is expected to see robust growth in volume sales across all categories of hot drinks. However, it is clear that demand for tea is already saturated, with black tea set to remain the preferred hot drink of most of the Iraqi population.
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Hot Drinks
This report originates from Passport, our Hot Drinks research and analysis database.
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