Coffee Consumption Surging

One in four coffee drinkers are now choosing gourmet products daily as younger consumers embrace upscale brews.

By John Lofstock, Editor.

 Coffee consumption tracks strong and steady, according to the National Coffee Association’s (NCA) National Coffee Drinking Trends, with sales data suggesting a solid footing for future growth. Rebounding youth consumption, strong gourmet allegiance and expanding formats appear to bode well for the category.

“The trends data shows strong coffee relevancy across age, variety and format options,” said Robert Nelson, NCA president and CEO. “Together, these elements suggest a solid customer and product base for future growth.”

Younger Consumers
In 2011, younger coffee drinkers restored levels of consumption after they slipped last year. Consumption among those 18-24 jumped from 31% to 40%, and for 25-39 year olds it increased from 44% to 54%, NCA reported. Overall, more than three quarters of U.S. adults drink coffee, with 58% indicating they drink coffee daily.

These ­ figures aligned with findings that 29% of 18-39 year olds said they feel much or somewhat better about their personal financial situation versus six months ago, contrasted with just 12% of those 40 and over. Conversely, 27% of the younger group felt somewhat or much worse about their personal ­ financial situation, compared with 42% for their elders, according to NCA.

Gourmet Coffee
The NCA report also found that a quarter of all coffee drinkers said they have consumed a gourmet coffee beverage within the past day. Overall, share of cups remains at a strong 37%, in line with last year. These levels demonstrate the continued strength of the gourmet segment within the category.

Significantly, NCA data provided the truest picture yet of today’s gourmet segment. It reflects a new de­finition, adopted in the 2010 Coffee Trends Report, that was carefully crafted to show changing consumer understanding and acceptance of gourmet coffee as an everyday choice.

In a new line of questioning, the NCA report explored life-stage influences on coffee consumption. Among the adults polled, a majority said they entered the category in their teenage years. Fifty-four percent of coffee consumers said they began drinking coffee between the ages of 13 and 19, and 22% more between 20 and 24.

Data also detail percentages related to each age within the range, revealing a peak of 34% between ages 16-18.
Other life-stage data showed that weekly or more frequent coffee consumption increases during high school, college and working at one’s first job and wanes slightly during unemployment, but not retirement. It is highest among parents when older children are at home and after they have left, but not so among those with young children at home—to mention just a few of the life-stages explored.

Single-cup Systems
The 2011 Coffee Trends Report again polled consumers about engagement in the single-cup brewing format, after a hiatus of four years. From 2005 to 2011, the number of U.S. households owning a single-cup brewer grew at a rate averaging 1% per year through the period. In a notable departure from years past, 35% of those with a single-cup system acquired it in the past six months and purchasers are now more likely to use it to replace their current brewer.

Perceptions of single-cup systems show improvement as well. Those who rated the systems as excellent or very good jumped to 45% this year versus 26% in 2007. The effect of these home-brew systems on retail sales is still somewhat cloudy, but coffee marketers are clearly targeting young adults.

“I see a lot of non-teens buying coffee as well, but marketers are certainly targeting that group,” said Jerry Weiner, vice president of foodservice for Rutter’s Farm Stores in York, Pa. He described the marketing push toward adolescents and young adults as a natural offshoot of marketing energy and highly caffeinated drinks—a trend Weiner accommodated by having two hot caffeine beverage dispensers in Rutter’s 50-plus stores. “On one side we’ve got the highly caffeinated coffees,” Weiner said. “I also put in a separate machine for hot energy products that are highly-caffeinated and powdered cappuccino products in highly-caffeinated versions. The highly-caffeinated coffee is our No. 3 item, higher than I would have given it credit for, right behind the Colombian and our regular coffee.

Rutter’s has already offered a “green” coffee, and Weiner—who constantly looks to offer all the hot beverages anybody could want—is about to introduce a fair trade blend as well. “I’m not exactly sure where fair trade will fall once it hits, but my belief is it’s going to be pretty high on the list as well,” he said.

Weiner takes the same “cover all the bases” approach with condiments, providing every coffee additive a dedicated java drinking customer could possibly want, including sugar in the raw, powdered and liquid sweeteners and a full complement of flavored syrups, sprinkles and marshmallows—plus nine different flavored creamers in addition to all the milks and whipped cream.

“The idea is that whatever you want in your coffee, it’s available at our stores,” Weiner said. “I’m trying to take that same approach on the product side by having an array that covers pretty much the entire gambit of consumer desire.”

Don’t Forget Decaf
While the emphasis is on exotic flavors and extreme caffeine, older customers often seek a decaffeinated product, perhaps because they become more sensitive to caffeine as they age. “Our decaffeinated fountain products always do better in stores with older demographics,” Weiner observed. “Those are usually not very successful with younger customers.”

One concept Rutter’s has tested is its own freshly-brewed iced coffees.

“We brew our own iced tea, so we already have the equipment we needed to brew cold coffee,” Weiner said. “There’s a big push for cold coffees now, and I think it’s going to be something that will set us apart. McDonald’s and Dunkin’ Donuts both push iced coffees, and Starbuck’s probably sells as much iced coffee as they do hot, Weiner pointed out. “There’s certainly a consumer demand for that type of product line. I’m looking for that to be a pretty big piece after we get out of the winter months,” he said.

Brewing a Coffee Strategy

Coffee continues to be a top beverage choice with 60% of consumers saying they routinely drink regular hot coffee, according to Mintel’s 2011 Market Intelligence Report on Coffee & Tea.

According to a recent Smucker Foodservice coffee survey, when drinking coffee away from home, eight in 10 consumers think it’s important that an establishment serves a brand that they like. While national chains like Starbucks, Dunkin’ Donuts and even McDonald’s have earned praise for their coffee programs, convenience stores are earning high marks for their coffee strategies.

Convenience stores, which are gaining notoriety for marketing concepts like coffee freshness guarantees, tend to be a coffee destination with 86% of convenience store coffee purchases being planned, and consumers of coffee and other dispensed beverages are high frequency buyers who represent 68% more visits than the average convenience store customer, according to NPD’s Convenience Store Monitor.

  • Michael Bailey

    I was recently in rome enjoying a nice macchiato in in a lovely little cafe and i got speaking to a gentleman from http://www.gio-espresso.co.uk and http://www.gio-kitchen.co.uk, he runs an online coffee store, he was telling me how when he first started it was all the economy coffee pods and beans that sold well a few years ago, now its his premium Coffee and Coffee machines that are top sellers.  So much for the depression heyy.

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