Table of Contents
Overview
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- What you need to know
- Definition
Executive Summary
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- Continued growth in 2018 expected to continue through 2023
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- Figure 1: Total US sales and fan chart forecast of coffee, at current prices, 2012-22
- The issues
- Traditional roasted coffee offers little growth, and instant sees sales and share decline
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- Figure 2: Percent market share of coffee market, by segment, 2016 and 2018
- National brands struggling to keep pace with innovation
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- Figure 3: Types of brands purchased, by type of coffee, May 2018
- Competitive drink space gets energetic
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- Figure 4: Other drinks used for energy other than energy drinks/ shots, March 2018
- The opportunities
- Young consumers consume range of formats and are energized by new RTD coffees
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- Figure 5: Consumption of coffee, by age, May 2018
- Opportunity to engage and cross-market with foodservice offerings
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- Figure 6: interest in RTD coffee innovations, May 2018
- Interest in enhanced RTD coffee, especially BFY benefits, is high
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- Figure 7: Attributes in ideal RTD coffee drinks, May 2018
- What it means
The Market – What You Need to Know
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- Coffee market grows in 2018 and positive forecast seen through 2023
- RTD coffee stands out as dynamic, fast-growing segment
- Creamer market’s fairly stable trajectory projected to continue
- Foodservice competes, but also shapes demand and innovation
- Tea, soda and sports drinks widely used as energizing beverages
Market Size and Forecast
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- Growth climbs in 2018 and is forecast to continue through 2023
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- Figure 8: Total US sales and fan chart forecast of coffee, at current prices, 2012-22
- Figure 9: Total US retail sales and forecast of coffee, at current prices, 2012-22
Market Breakdown
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- RTD coffee drives category growth
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- Figure 10: Percent market share of coffee market, by segment, 2016 and 2018
- Roasted coffee dominates segment, but growth is stagnant
- Single-cup continues to draw consumers and posts 6% two-year growth
- Dynamic RTD segment propels market forward as sales drop for instant
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- Figure 11: Total US retail sales of coffee, by segment, at current prices, 2016 and 2018
- RTD coffee and single-serve forecast to drive market, build share through 2023
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- Figure 12: Total US retail sales and forecast of coffee by segment, at current prices, 2012-22
- Supermarkets remain single-largest channel for coffee sales
- “Other” retailers are growing share and expanding private label presence
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- Figure 13: Total US retail sales of coffee, by channel, at current prices, 2016 and 2018
Market Perspective
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- Creamer market posts stable growth, increases projected through 2023
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- Figure 14: Total US retail sales and forecast of cream and creamers, at current prices, 2013-23
- Food service competes, but also shapes demand and innovation
- Competition from energy drinks, including coffee-flavored options
- Tea, soda and sports drinks widely used as energizing beverages
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- Figure 15: Other drinks used for energy other than energy drinks/shots, March 2018
Market Factors
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- Consumer economic confidence shapes discretionary expenditures on beverages
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- Figure 16: Consumer confidence and unemployment, 2000-may 2018
- Younger consumers are shifting category leaders
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- Figure 17: Type of coffee consumed most often, for grounds, by age, May 2018
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- Figure 18: Type of coffee consumed most often, for RTD, by age, May 2018
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- Figure 19: US Population aged 18+, by age, 2013-23
- Multicultural growth
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- Figure 20: Distribution of population, by age race and Hispanic origin, 2018
- Studies suggest coffee’s benefits to health and longevity
Key Players – What You Need to Know
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- Market leader JM Smucker loses share, Starbucks posts growth
- “Other” suppliers build share, especially in RTD segment
- Private label build share, especially with premium offerings
- RTD segment grows, with many strong performers, especially in cold brew
- Forward-looking innovation widespread in the RTD segment
Brand Sales of Coffee
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- In fragmented landscape, JM Smucker struggles, as Starbucks rises
- Three major medium sized players also lose share
- “Other” suppliers – including many niche brands – are fastest growing
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- Figure 21: Multi-outlet sales of coffee, by leading companies, rolling 52 weeks 2016 and 2017
What’s Working?
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- Restaurant and coffee shop branded roast and pods
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- Figure 22: K-cup Original Donut Shop Coffee Ad, 2018
- Private label gains share, especially in single-serve pod and RTD segments
- RTD coffee grows, with many strong performers, especially in cold brew
- North American Coffee Partnership grows sales from leading segment position
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- Figure 23: Starbucks Mocha Frappuccino bottle – flavor like no other Ad, 2018
- Range of food & beverage suppliers expand their reach into RTD segment
- Smaller players build share and drive innovation, especially in cold brew
What’s Struggling?
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- Legacy brands struggle, especially in roasted coffee and single serve
- Instant coffee loses appeal and continues to see sales tumble
What’s Next?
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- More RTD choices made with nut-based milks and oils
- Hybrid cold brew coffees
- Functional coffee: added caffeine, protein, vitamins and other benefits
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- Figure 24: Starbucks Plus Coffee single serve pods Ad, 2018
- Attention to ethical sourcing, already widespread, may go further
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- Figure 25: Green Mountain Coffee Ad, 2018
The Consumer – What You Need to Know
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- Grounds are most widely used, followed by pods and RTD offerings
- Age shapes consumption, with users 18-34 using wider range
- Consumers define premium coffee by superior taste first
- Interest high in foodservice branded RTD choices
- RTD coffee consumers eager for additives that can provide BFY benefits
- Vanilla, hazelnut and chocolate top flavor interest
- National, foodservice and premium private label are all widely used
Coffee Consumption
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- Grounds are most widely used, followed by pods and RTD offerings
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- Figure 26: Consumption of coffee – by type of coffee, May 2018
- Caffeinated and brewed more popular than decaf or espresso
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- Figure 27: Consumption of coffee - grounds, pods and instant, May 2018
- Flavored RTD coffees are most popular
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- Figure 28: Consumption of RTD coffee, May 2018
- Older consumers stick to grounds, youth experiment and seeks RTD coffee
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- Figure 29: Consumption of coffee, by age, May 2018
- More affluent HHs show preference grounds and pods
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- Figure 30: Consumption of coffee, by household income, May 2018
- Hispanics show strong engagement, including high usage of RTD
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- Figure 31: Consumption of coffee, by Hispanic origin, May 2018
Qualities of Premium Coffee
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- Consumers define premium coffee by superior taste first
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- Figure 32: Premium coffee qualities, May 2018
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- Figure 33: TURF Analysis – Defining premium coffee, May 2018
- Figure 34: Table - TURF Analysis – Defining premium coffee, May 2018
- Younger consumers expect premium to have more natural, green profile
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- Figure 35: Premium coffee qualities, by age, May 2018
- Affluent consumers may prioritize taste, seek small batch products
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- Figure 36: Premium coffee qualities, by household income, May 2018
- Hispanic consumers value more natural, eco-friendly qualities in premium
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- Figure 37: Premium coffee qualities, by Hispanic origin, May 2018
Qualities Sought in RTD Coffee
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- Interest high in coffee shop/restaurant RTD creations
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- Figure 38: interest in RTD coffee innovations, May 2018
- RTD coffee users 45+ especially interested in coffee shop, restaurant brands
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- Figure 39: interest in RTD coffee innovations, by age, May 2018
- RTD coffee consumers eager for BFY benefits
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- Figure 40: Attributes in ideal RTD coffee drink, May 2018
- RTD coffee with health/wellness additives build appeal to those 45+
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- Figure 41: Attributes in ideal RTD coffee drink, by age, May 2018
- RTD coffee with high caffeine and protein likely to appeal to men
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- Figure 42: Attributes in ideal RTD coffee drink, by gender, May 2018
- Hispanic consumers seek RTD coffee drinks with a health halo
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- Figure 43: Attributes in ideal RTD coffee drink, by Hispanic origin, May 2018
Flavors of Coffee
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- Vanilla, hazelnut and chocolate engage most interest
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- Figure 44: Coffee flavors interested in trying, May 2018
- Interest high in flavors, except among those aged 55+
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- Figure 45: Coffee flavors interested in trying, by Age, May 2018
- Hazelnut, banana and alcohol flavored coffees appeal to
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- Figure 46: Coffee flavors interested in trying, by Hispanic origin, May 2018
Brands
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- National, foodservice and premium private label are all widely used
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- Figure 47: Types of brands purchased, by type of coffee, May 2018
- Usage of national brands highest in grounds and instant
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- Figure 48: Types of brands purchased, by type of coffee, May 2018
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- Figure 49: Correspondence Analysis – Coffee/tea brand type purchase, May 2018
- Figure 50: Coffee/tea brand type purchase, May 2018
- National brands used more exclusively by those aged 55+
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- Figure 51: Types of brands purchased, by age, May 2018
- Income shapes brand choice, but is not necessarily dominant factor
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- Figure 52: Types of brands purchased, by household income, May 2018
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Fan chart forecast
- Consumer survey data
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
- TURF methodology
- Correspondence Analysis Methodology
Appendix – Market
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- Figure 53: Total US retail sales and forecast of coffee, at inflation-adjusted prices, 2013-23
- Figure 54: Total US retail sales and forecast of roasted coffee, at inflation-adjusted prices, 2013-23
- Figure 55: Total US retail sales and forecast of single-cup coffee, at inflation-adjusted prices, 2013-23
- Figure 56: Total US retail sales and forecast of instant coffee, at inflation-adjusted prices, 2013-23
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- Figure 57: Total US retail sales and forecast of ready-to-drink coffee, at inflation-adjusted prices, 2013-23
- Figure 58: Total US retail sales of coffee, by retail channel, at current prices, 2013-18
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Appendix – Key Players
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- Figure 59: MULO sales of roasted coffee by leading companies and brands, rolling 52 weeks 2017 and 2018
- Figure 60: MULO sales of single-cup coffee by leading companies and brands, rolling 52 weeks 2017 and 2018
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- Figure 61: MULO sales of instant coffee by leading companies and brands, rolling 52 weeks 2017 and 2018
- Figure 62: MULO sales of ready-to-drink coffee by leading companies and brands, rolling 52 weeks 2017 and 2018
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