Instant Coffee Manufacturing Plant Setup Cost

Report Overview:

IMARC Group’s report titled “Instant Coffee Manufacturing Plant Project Report 2025: Industry Trends, Plant Setup, Machinery, Raw Materials, Investment Opportunities, Cost and Revenue” provides a complete roadmap for setting up an instant coffee manufacturing plant. It covers a comprehensive market overview to micro-level information such as unit operations involved, raw material requirements, utility requirements, infrastructure requirements, machinery and technology requirements, manpower requirements, packaging requirements, transportation requirements, etc. The instant coffee project report provides detailed insights into project economics, including capital investments, project funding, operating expenses, income and expenditure projections, fixed costs vs. variable costs, direct and indirect costs, expected ROI and net present value (NPV), profit and loss account, financial analysis, etc.

What is Instant Coffee?

Instant coffee is a coffee made from brewed coffee that has been processed and dried into a powder or granules. It enables consumers to prepare a cup of coffee quickly by adding hot water rather than going through the brewing process. Instant coffee is popular because it is very convenient, has a long shelf life and is easy to store. It is produced using either spray-drying or freeze-drying to help maintain flavors and aromas. Instant coffee serves a large portion of the world's population and has extended to suit a wide range of consumer market segments, namely coffee drinkers who are busy or travelers.

Instant Coffee Manufacturing Plant: Key Highlights

• Process Used: Spray drying process
• End-use Industries: Food & beverage, retail, HoReCa (hotels, restaurants, and cafés), institutional sectors, and vending machine operations
• Applications: Used in hot beverages, iced coffee drinks, ready-to-drink (RTD) products, baking and desserts, flavouring in food recipes, and use in vending machines and institutional catering

An instant coffee manufacturing plant is a facility where soluble coffee is produced from roasted coffee beans, using an industrial scale of processes. The plant will generally have sections for roasting, grinding, extraction, concentration, and drying, usually with spray or freeze drying. Important equipment will include extractors, evaporators, spray and freeze dryers, as well as aroma recovery systems. In order to preserve the flavor and aroma of the coffee, the plants operate in an environment where temperature and pressure are controlled and there are hygienic transport and handling systems. Instant coffee plants will provide different end-use segments from retail to foodservice to ready-to-drink coffee beverages to vending operation coffee drinks.

Instant Coffee Industry Outlook 2025:

The rate of growth in the market for instant coffee is moving forward rapidly, due to a number of reasons. First and foremost, is convenience; given busy lifestyles and the need for quick and easy to prepare food and beverages, many consumers around the world embrace instant coffee. Secondly, there is increased demand for instant coffee, due to urbanization and growing middle class in emerging markets, which are driving demand for coffee products that are affordable. Moreover, product innovations, including newly launched flavors and premium versions, have expanded the marketplace for instant coffee. Expanding e-commerce options have widened product accessibility for the consumer so they can learn more and explore various brands and product choices from the comfort of their homes. All the above-mentioned factors, along with several others, are fueling the growth in the market and its diversification. Supporting this point, the National Coffee Association of U.S.A., Inc. published research in April 2024 and indicated that, within the US, daily coffee consumption has increased by 37% since 2004.

Instant Coffee Market Trends and Growth Drivers:

Rising demand for premium and sustainable instant coffee products

The instant coffee segment is growing rapidly because it is shifting towards premiumization and sustainability. More manufacturers are launching premium instant coffee brands with unique and higher-end taste experiences to accommodate discerning consumers. An example of this phenomenon is the recent launch of a new product, Little's Toffee Nut Instant Coffee in September 2023, which is made with premium beans that are roasted and freeze dried. There are innovative flavors like Christmas Spirit French Vanilla, Rich Hazelnut, and Spiced Cardamom Bun. Consumers want quality and variety in the premium space, enabling market growth by focusing on premium products.

Strategic collaborations and investments

The instant coffee market is currently witnessing heightened growth due to increased partnerships and acquisition of the major players in the market. Companies are actively investing in fast-growing instant coffee brands to augment their portfolio of products and strengthen their presence in the market alike. In August 2024, for example, GRM Overseas Ltd invested in Rage Coffee, a well-known instant coffee maker, as part of its strategy to invest in consumer brands. The partnerships and investments are also enhancing innovation, distribution, and visibility of the brand and consequently the market's growth.

Latest Industry Developments:

• March 2024: Louis Dreyfus Company, based in the Netherlands, acquired Cacique Company Instant Coffee from Brazil as part of its strategy to diversify revenue by adding value-added product lines.
• February 2024: Bank of America partnered with Starbucks Coffee Company to offer customers up to 2% cashback on eligible purchases through the Starbucks Rewards program.
• December 2023: Hindustan Unilever Limited (HUL) broadened its Bru Gold range by launching flavored coffee variants in vanilla, caramel, and hazelnut.
• July 2023: Kraft Heinz has launched its Maxwell House brand back into North America with innovation introducing cold instant coffee beverages, which includes Maxwell House Iced Latte available in vanilla, hazelnut, and caramel flavours to create a café-style experience at home in a convenient way.
• June 2023: Continental Coffee (CCL Products) acquired 6 coffee brands from the Food Brands Group, a subsidiary of Sweden's Löfbergs Group, to strengthen its manufacturing and international distribution ability in the FMCG market.

Leading Instant Coffee Manufacturers:

Leading manufacturers in the global instant coffee industry include several multinational companies with extensive production capacities and a wide range of product offerings. Key players include:

• Nestlé S.A.
• Bevzilla
• Starbucks Coffee Company
• Sleepy Owl Coffee
• Tata Consumer Products Limited
• The Good Life Company (TGL Co.)

all of which operate large-scale facilities and serve end-use sectors such as food & beverage, retail, HoReCa (hotels, restaurants, and cafés), institutional sectors, and vending machine operations.

Instant Coffee Plant Setup Requirements

Detailed Process Flow:

The manufacturing process is a multi-step operation that involves several unit operations, material handling, and quality checks. Below are the main stages involved in the instant coffee manufacturing process flow:

• Unit Operations Involved
• Mass Balance and Raw Material Requirements
• Quality Assurance Criteria
• Technical Tests

Key Considerations for Establishing an Instant Coffee Manufacturing Plant:

Setting up an instant coffee manufacturing plant requires evaluating several key factors, including technological requirements and quality assurance. Some of the critical considerations include:

• Site Selection: The location must offer easy access to key raw materials such as high-quality coffee beans, typically Arabica or Robusta varieties. Proximity to target markets will help minimize distribution costs. The site must have robust infrastructure, including reliable transportation, utilities, and waste management systems. Compliance with local zoning laws and environmental regulations must also be ensured.​
• Plant Layout Optimization:The layout should be optimized to enhance workflow efficiency, safety, and minimize material handling. Separate areas for raw material storage, quality control, production, and finished goods storage must be designated. Space for future expansion should be incorporated to accommodate business growth.​
• Equipment Selection: High-quality, corrosion-resistant machinery tailored for instant coffee production must be selected. Essential equipment includes roasting machines, grinding mills, extraction tanks, spray dryers or freeze dryers, and packaging machines. All machinery must comply with industry standards for safety, efficiency, and reliability.​
• Raw Material Sourcing: Reliable suppliers must be secured for raw materials like high-quality coffee beans, typically Arabica or Robusta varieties, to ensure consistent production quality. Minimizing transportation costs by selecting nearby suppliers is essential. Sustainability and supply chain risks must be assessed, and long-term contracts should be negotiated to stabilize pricing and ensure a steady supply.
• Safety and Environmental Compliance: Safety protocols must be implemented throughout the manufacturing process of instant coffee. Advanced monitoring systems should be installed to detect leaks or deviations in the process. Effluent treatment systems are necessary to minimize environmental impact and ensure compliance with emission standards.​
• Quality Assurance Systems: A comprehensive quality control system should be established throughout production. Analytical instruments must be used to monitor product concentration, purity, and stability. Documentation for traceability and regulatory compliance must be maintained.

Project Economics:

​Establishing and operating a instant coffee manufacturing plant involves various cost components, including:​

• Capital Investment: The total capital investment depends on plant capacity, technology, and location. This investment covers land acquisition, site preparation, and necessary infrastructure.
• Equipment Costs: Equipment costs, such as those for roasting machines, grinding mills, extraction tanks, spray dryers or freeze dryers, and packaging machines, represent a significant portion of capital expenditure. The scale of production and automation level will determine the total cost of machinery.​
• Raw Material Expenses: Raw materials, including high-quality coffee beans, typically Arabica or Robusta varieties, are a major part of operating costs. Long-term contracts with reliable suppliers will help mitigate price volatility and ensure a consistent supply of materials.​
• Infrastructure and Utilities: Costs associated with land acquisition, construction, and utilities (electricity, water, steam) must be considered in the financial plan.
• Operational Costs: Ongoing expenses for labor, maintenance, quality control, and environmental compliance must be accounted for. Optimizing processes and providing staff training can help control these operational costs.​
• Financial Planning: A detailed financial analysis, including income projections, expenditures, and break-even points, must be conducted. This analysis aids in securing funding and formulating a clear financial strategy. 

Capital Expenditure (CapEx) and Operational Expenditure (OpEx) Analysis:

Capital Investment (CapEx): Machinery costs account for the largest portion of the total capital expenditure. The cost of land and site development, including charges for land registration, boundary development, and other related expenses, forms a substantial part of the overall investment. This allocation ensures a solid foundation for safe and efficient plant operations.

Operating Expenditure (OpEx): In the first year of operations, the operating cost for the instant coffee manufacturing plant is projected to be significant, covering raw materials, utilities, depreciation, taxes, packing, transportation, and repairs and maintenance. By the fifth year, the total operational cost is expected to increase substantially due to factors such as inflation, market fluctuations, and potential rises in the cost of key materials. Additional factors, including supply chain disruptions, rising consumer demand, and shifts in the global economy, are expected to contribute to this increase.

Capital Expenditure Breakdown:

Operational Expenditure Breakdown:

Profitability Analysis:

Report Coverage:

Report Customization

While we have aimed to create an all-encompassing report, we acknowledge that individual stakeholders may have unique demands. Thus, we offer customized report options that cater to your specific requirements. Our consultants are available to discuss your business requirements, and we can tailor the report's scope accordingly. Some of the common customizations that we are frequently requested to make by our clients include:

• The report can be customized based on the location (country/region) of your plant.
• The plant’s capacity can be customized based on your requirements.
• Plant machinery and costs can be customized based on your requirements.
• Any additions to the current scope can also be provided based on your requirements.

Why Buy IMARC Reports?

• The insights provided in our reports enable stakeholders to make informed business decisions by assessing the feasibility of a business venture.
• Our extensive network of consultants, raw material suppliers, machinery suppliers and subject matter experts spans over 100+ countries across North America, Europe, Asia Pacific, South America, Africa, and the Middle East.
• Our cost modeling team can assist you in understanding the most complex materials. With domain experts across numerous categories, we can assist you in determining how sensitive each component of the cost model is and how it can affect the final cost and prices.
• We keep a constant track of land costs, construction costs, utility costs, and labor costs across 100+ countries and update them regularly.
• Our client base consists of over 3000 organizations, including prominent corporations, governments, and institutions, who rely on us as their trusted business partners. Our clientele varies from small and start-up businesses to Fortune 500 companies.
• Our strong in-house team of engineers, statisticians, modeling experts, chartered accountants, architects, etc. have played a crucial role in constructing, expanding, and optimizing sustainable manufacturing plants worldwide.