Whipped Dalgona Craze Is Perking Up Sales of Instant Coffee

(Bloomberg) -- A popular quarantine fad to whip up a foamy beverage at home is helping drive sales of instant coffee.

The Dalgona coffee sensation has flooded social media as people forced into isolation attempt to make the creamy and energizing concoction. The recipe is simple: whisk equal parts of instant coffee, sugar and hot water until they turn into a frothy whip, then spoon over iced milk. Google Trends show searches for Dalgona coffee accelerated sharply from early March onward.

Initial data point to a “massive rise” in demand for instant coffee, far higher than before the pandemic, said Jonny Forsyth, associate director for food and drink at market research company Mintel. Consumers in lockdown began stockpiling instant coffee to give them energy and psychological comfort, while the product's affordability makes it recession-resistant, he said.

Nestle SA, the world's largest food and beverage company, says sales of instant coffee increased in most markets as closures of restaurants and cafes boost home consumption and consumers are “rediscovering” the instant variety. The company, which recently launched a Starbucks premium instant coffee range, also produces the popular brand Nescafe, which, it says, makes up one out of every seven cups of coffee drunk in the world.

Home Recipes

“Consumers are spending more time at home and trying new recipes, reproducing for themselves the experience they enjoy in restaurants and cafes,” said Philipp Navratil, Global Head of Beverage Strategic Business Units at Nestle. “Dalgona coffee is just one example of the global trends we see in the coffee category.” That's as instant coffee is adapted for making recipes in a convenient way, which could lead to a sustained increase in demand, he said.

Instant coffee imports by South Korea, where Dalgona coffee was popularized, surged 65% in March to $8.5 million from a year ago, according to Fitch Solutions. Given South Korea eventually turned out to be one of the countries less severely affected by Covid-19, other nations could see a similar, or even larger increase in instant sales, said Consumer and Retail Analyst Taohai Lin. Korea has a sugar confection called Dalgona from which the name is derived.

Still, the instant coffee boom could fizzle as lockdowns ease across the world and consumers seek alternative ways to get their caffeine fix.

“Trends tend to move quite quickly, especially for food where novelty is key, so this demand, as seen in Korea, is likely to be short-lived,” Lin said. “Of course, if it ‘bucks the trend' and continues to generate interest, then the uptick in coffee demand will be more pronounced.”