Table of Contents
Executive Summary
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- The issues
- Heated competition in the coffee and tea market
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- Figure 1: Purchased a coffee or tea beverage from segment in past three months, October 2015
- Caffeine concerns among the health conscious
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- Figure 2: Coffee house and tea shop statement agreement, any agree, October 2015
- Coffee and tea from abroad
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- Figure 3: Coffee house and tea shop statement agreement, “I’m interested in visiting internationally-based coffee house chains in the US,” any agree, October 2015
- The opportunities
- Consumers are open to new/innovative beverages
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- Figure 4: Coffee house and tea shop statement agreement, “I like trying new/innovative coffee and/or tea drinks,” any agree, October 2015
- Evening offerings may increase visitation
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- Figure 5: Coffee/tea evening visitation motivators, October 2015
- Millennial parents are key consumers
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- Figure 6: Coffee house and tea shop statement agreement, any agree, October 2015
- What it means
The Market – What You Need to Know
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- Price of coffee falls
- Turning to tea
- Millennials are having kids
Market Factors
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- Cheaper coffee may not lead to cheaper drinks
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- Figure 7: Monthly average price for raw coffee supplies, January 2012-September 2015
- Tea imports, retail consumption raise
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- Figure 8: US imports of tea and mate in metric tons, 1999-2013
- Parental Millennials
Key Players – What You Need to Know
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- Third wave coffee
- Globalization of coffee houses and tea shops
- Tea time
Third Wave Coffee and Tea
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- History of the coffee “waves”
- Third wave coffee players
- What it means
- Fourth wave on the horizon?
International Chains
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- Foreign players enter the market
Tea Shops
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- Tea shop chains
MMI Analysis
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- Espresso beverages on the rise
- Fruity tea flavors experience growth
What’s Working?
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- Mobile payments pay off for shops
- Cold brew coffee
What’s Next?
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- Coffee to you
- Beverages to watch
- Consider functionality
- Food for thought
The Consumer – What You Need to Know
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- Older Millennials are passionate about coffee and tea
- Hispanics are visiting coffee and tea chains; prefer bold drinks
- Highlight natural claims
Coffee and Tea Segment Visitation
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- Coffee house chains most visited; tea shops trail behind
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- Figure 9: Purchased a coffee or tea beverage from segment in past three months, October 2015
- Tea shop visitors
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- Figure 10: Purchase a coffee or tea beverage from segment in past three months, October 2015
Gender Differences
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- Men are willing to pay; women want deals and are less enthusiastic
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- Figure 11: Coffee house and tea shop statement agreement, any agree, October 2015
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- Figure 12: Most important factors when choosing a coffee house or tea shop
Parents
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- Parents care more about secondary factors
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- Figure 13: Coffee house and tea shop statement agreement, any agree, October 2015
- Opportunity exists to market coffee house/tea shop food to parents
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- Figure 14: Most important factors when choosing a coffee house or tea shop, any agree, October 2015
- Figure 15: Coffee house and tea shop statement agreement, any agree, October 2015
Age Differences
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- The youngest consumers
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- Figure 16: Purchased a coffee or tea beverage from segment in past three months, October 2015
- Older Millennials: The key demographic
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- Figure 17: Coffee house and tea shop statement agreement, Coffee/tea beverages should be made with all natural ingredients, any agree, October 2015
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- Figure 18: Coffee house and tea shop statement agreement, any agree, October 2015
- Boomers: Provide them a quality coffee and tea menu
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- Figure 19: Coffee/tea evening visitation motivators, October 2015
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- Figure 20: Most important factors when choosing a coffee house or tea shop
Hispanic
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- Hispanics are heavy coffee/espresso drinkers
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- Figure 21: Coffee beverages consumed in the past three months (both at home and away from home), Q3 2015
- Hispanics are coffee/tea chain users, show interest in evening options
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- Figure 22: Purchased a coffee or tea beverage from segment in past three months, October 2015
Consumers and Third Wave
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- Will third wave catch on?
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- Figure 23: Coffee house and tea shop statement agreement, any agree, October 2015
- Key driver analysis
- Methodology
- True coffee lovers will pay for single-origin beverages
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- Figure 24: Key drivers of agreement: Single-source coffee or tea beverages are worth paying more for, October 2015
- What it means
Coffee and Tea Flavors and Condiments
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- Coffee roasts
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- Figure 25: Condiment/flavor appeal – Coffee roasts, October 2015
- Coffee flavors
- Tea flavors/varieties
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- Figure 26: Condiment/flavor appeal – Tea flavors/varieties, October 2015
- Sweeteners
- Creamers
- TURF analysis – Condiments
- Methodology
- Provide a mix of natural and artificial options to satisfy all consumers
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- Figure 27: TURF analysis – Sweeteners, October 2015
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- Figure 28: TURF analysis – Creamers, October 2015
Coffee and Tea Tracker
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- At home versus away from home
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- Figure 29: Coffee beverages consumed in the past three months (both at home and away from home), Q3 2015
- Coffee and tea consumption: Demographics
Coffee Shop and Tea House Evening Visitation
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- Evening visitation strategies: Focus on price
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- Figure 30: Coffee/tea evening visitation motivators, October 2015
- Evening visitation strategies: Serve alcohol
- Evening visitation strategies: Relaxation beverages
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- Figure 31: Yogi Bedtime Tea
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- Figure 32: Counting Sheep Coffee 40 Winks Blend
Natural and Low-Caffeine Beverages
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- Highlight natural products
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- Figure 33: Coffee house and tea shop statement agreement, “Coffee/tea beverages should be made with all natural ingredients,” any agree, October 2015
- Potential may exist for lower caffeine beverages
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- Figure 34: Coffee house and tea shop statement agreement, any agree, October 2015
Qualitative Analysis – Brand Personification
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- Methodology
- Starbucks: Young, fit, and professional
- Dunkin’ Donuts: The choice for working Americans
- McDonald’s: Parent needing a boost
- Independents: A place for hipsters
Qualitative Analysis – Additional Topics
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- The ideal coffee house or tea shop app
Coffee and Tea Delivery
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- Delivery viability and marketing strategies: A quantitative and qualitative perspective
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- Figure 35: Coffee house and tea shop statement agreement, “Coffee houses and tea shops should offer delivery services”, any agree, October 2015
Appendix – Data Sources and Abbreviations
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- Consumer survey data
- Consumer qualitative research
- Abbreviations and terms
- Abbreviations
Appendix – TURF
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- Figure 36: Table – TURF Analysis – Sweeteners and creamers, October 2015
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Appendix – Key Driver Analysis
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- Interpretation of results
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- Figure 37: Key drivers of agreement: single-source coffee or tea beverages are worth paying more for – Key driver output, October 2015
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