Table of Contents
Scope and Themes
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- What you need to know
- Definition
- Data sources
- Sales data
- Consumer survey data
- Abbreviations and terms
- Abbreviations
- Terms
Executive Summary
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- Market performance
- Coffee market faces competition from coffeehouses, energy drinks, and tea
- Tight race for market share between Kraft and P&G
- Coffee sticks and green coffee drive innovation
- Retail channels
- The market must accommodate younger tastes
- Roasted coffee is still most popular in U.S. homes but this may change
- Hispanics, Asians key to future growth
Insights and Opportunities
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- Would you like a shot with that DoubleShot?
- Beauty-enhancing coffee
- Premium three-in-one mixes
- Ethnic flavors
- Charity affiliations
- Rebranding to compete with energy drinks
Fast Forward Trends
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- Trend 1: Simplicity and Convenience
- What’s it about?
- What we've seen
- Trend 2: A Play on Brands
- What's it about?
- What we've seen
- How does this relate to coffee?
Market Size and Forecast
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- Key points
- Dollar sales outpace volume sales
- Economic slowdown to force consumers to make coffee at home
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- Figure 1: Total U.S. retail sales of coffee, at current prices, 2003-13
- Figure 2: Total U.S. sales and forecast of coffee, at inflation-adjusted prices, 2003-13
- Wal-Mart sales
Competitive Context
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- At home vs. on-the-go coffee
- Starbucks is losing money and closing stores, which opens a door for traditional retail coffee brands
- Energy drinks
- Tea
- Bottled and canned tea
Segment Performance
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- Key points
- Roasted coffee is still the preferred form of coffee
- Instant coffee lags due to premiumization but is popular among Hispanics
- Hispanics, Asians, young people influence RTD segment performance
- Retail sales of coffee
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- Figure 3: Retail sales of coffee, by segment, 2006 and 2008
Segment Performance—Roasted Coffee
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- Key points
- Coffee prices rise along with consumer demand for premium coffee
- Economic downturn may invigorate home sales
- What can manufacturers do?
- Retail sales of roasted coffee
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- Figure 4: U.S. sales and forecast of roast coffee*, at current prices, 2003-13
- Figure 5: U.S. sales and forecast of roast coffee*, at inflation-adjusted prices, 2003-13
Segment Performance—Instant Coffee
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- Key points
- Instant coffee sales slow down
- Hispanics drive instant coffee growth
- Instant coffee has an image problem in the U.S.
- What can manufacturers do?
- Retail sales of instant coffee
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- Figure 6: U.S. sales of instant coffee, at current prices, 2003-13
- Figure 7: U.S. sales of instant coffee, at inflation-adjusted prices, 2003-13
Segment Performance—Ready-to-drink Coffee
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- Key points
- Fastest-growing segment in the market
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- Figure 8: U.S. sales of ready-to-drink coffee, at current prices, 2003-13
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- Figure 9: U.S. sales of ready-to-drink coffee, at inflation-adjusted prices, 2003-13
Retail Channels
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- Key points
- Supermarkets and supercenters compete for shoppers
- Total sales of coffee by retail channel
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- Figure 10: U.S. sales of coffee, by retail channel, 2005 and 2007
Retail Channels—Supermarkets
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- Key points
- Supermarket coffee sales growth outpaced by that of market overall
- FDMx supermarket sales of coffee
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- Figure 11: FDMx sales of coffee in supermarkets, 2002-08
Retail Channels—Mass Merchandisers and Other
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- Key points
- One-stop shopping and economic worries benefit mass merchandisers
- Wal-Mart offers organic coffee
- Retail sales of coffee in mass and other
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- Figure 12: U.S. sales of coffee in mass and other channels, 2002-08
Retail Channels—Drug Stores
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- Key points
- Drug stores profit from RTD sales growth
- FDMx sales of coffee in drug stores
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- Figure 13: FDMx sales of coffee in drug stores, 2002-08
Natural Channel/SPINS
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- Key points
- Sales of coffee and ready-to-drink coffee in the natural channel
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- Figure 14: Natural supermarket retail sales of coffee, at current prices, 2006-08
- Figure 15: Natural supermarket retail sales of coffee, at inflation-adjusted prices, 2006-08
- Natural channel sales by segment
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- Figure 16: Natural supermarket retail sales of packaged coffee, by segment, 206 and 2008
- Natural channel sales of packaged coffee
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- Figure 17: Natural supermarket retail sales of packaged coffee, at current prices, 2006-08
- Figure 18: Natural supermarket retail sales of packaged coffee, at inflation-adjusted, 2006-08
- Natural supermarket channel sales, ready-to-drink coffee
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- Figure 19: Natural supermarket retail sales of RTD coffee, at current prices, 2006-08
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- Figure 20: Natural supermarket retail sales of RTD coffee, at inflation-adjusted, 2006-08
- Manufacturer and brand sales
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- Figure 21: Manufacturer and brand sales in natural supermarkets, 2006 and 2008
- Natural channel sales of packaged coffee by organic
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- Figure 22: Natural supermarket retail sales of organic and non-organic packaged coffee, 2006 and 2008
Market Drivers
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- Key points
- Young people are not turning to coffee like they have in the past
- Older consumers maintain market but market won’t grow without new young coffee consumers
- Population projects for coffee consumption
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- Figure 23: U.S. population and projections and consumption of coffee, by age, 2003-13
- Increase in Hispanic population to benefit the market
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- Figure 24: Population, by race and Hispanic origin, 2003-13
- Figure 25: Buying power, by ethnicity, 1990-2011
- Coffeehouses both positive and negative driver
- Economic uncertainty and over-expansion hit Starbucks hard, but people will still buy coffee—and more often to have at home
Leading Companies
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- Key points
- Kraft and P&G lose market share to smaller manufacturers
- An adventurous consumer base makes room for new coffeemakers
- FDMx sales of leading coffee manufacturers
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- Figure 26: FDMx sales of leading coffee companies, 2007 and 2008
Brand Share—Roasted Coffee
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- Key points
- Folgers, Maxwell House lose market share due to lack of young consumers
- Kraft has slight lead with coffeehouse brands
- FDMx roasted coffee brand sales
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- Figure 27: FDMx brand sales of roasted coffee, 2007 and 2008
Brand Share—Instant Coffee
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- Key points
- Nescafé Clasico and General Foods International growing sales and share
- Upscaling the image of instant coffee
- FDMx instant coffee brand sales
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- Figure 28: FDMx brand sales of instant coffee, 2007 and 2008
Brand Share—Ready-to-Drink Coffee
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- Key points
- Pepsi/Starbucks joint venture is the brand to beat
- Newcomers to the market
- FDMx ready-to-drink coffee brand sales
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- Figure 29: FDMx brand sales of roasted coffee, 2007 and 2008
Brand Qualities
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- Folgers
- Folgers introduces premium brands, alongside traditional favorites
- Folgers partners with public health and service organizations to serve the community
- Maxwell House
- Maxwell House goes all arabica
- Maxwell House introduces new, better packaging
- Maxwell House tries new slogan
- Is it working?
- Who buys Maxwell House?
- Nostalgia and familiarity are keys to Maxwell House’s success
- What about the new slogan?
Innovation and Innovators
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- Key points
- Coffee sticks
- Green coffee
- Nutraceutical coffee
- Positioning against energy drinks
- Seasonal blends
- Coffee pods
Advertising and Promotion
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- Folgers
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- Figure 30: Folgers Classic Roast television ad, 2008
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- Figure 31: Folgers Black Silk television ad, 2008
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- Figure 32: Folgers Gourmet Selections television ad, 2008
- Maxwell House
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- Figure 33: Maxwell House television ad, 2008
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- Figure 34: Maxwell House television ad, 2008
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- Figure 35: Maxwell House television ad, 2008
- Starbucks
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- Figure 36: Starbucks Christmas Blend ad, 2007
Coffee Consumption in Households
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- Key points
- Household usage of coffee remains high
- Trended household consumption of coffee
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- Figure 37: Trended household consumption of coffee, 2002-08
- Most adults drink coffee, but attracting younger adults to drink brewed coffee at home is a challenge
- What should marketers and manufacturers do?
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- Figure 38: Incidence of coffee consumption in the household, by age, February 2007-March 2008
Types of Coffee Used in Household
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- Key points
- Ground coffee remains most popular for home use
- How can manufacturers drive sales and consumption of whole bean coffee?
- Instant/freeze-dried coffee is declining in popularity
- Espresso and cappuccino are younger adults’ drinks
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- Figure 39: Type of coffee used in household, by age, February 2007-March 2008
- Type of coffee used in household varies by income
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- Figure 40: Type of coffee used in household, by household income, February 2007-March 2008
- Most coffee drinkers hit the caffeine but decaf is popular as well
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- Figure 41: Daily household coffee consumption, caffeinated and decaffeinated, February 2007-March 2008
Brand Preferences
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- Key points
- Ground and whole bean coffee brand preferences by age
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- Figure 42: Household usage of whole bean/ground coffee brands, by age, February 2007-March 2008
- Ground and whole bean coffee brand preferences by household income
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- Figure 43: Household usage of whole bean/ground coffee brands, by household income, February 2007-March 2008
- Instant coffee brand preferences by age
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- Figure 44: Household usage of instant coffee brands, by age, February 2007-March 2008
- Instant coffee brand preferences by household income
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- Figure 45: Use of instant coffee brands, by household income, February 2007-March 2008
Frequency and Quantity of Coffee Consumption: Adults
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- Key points
- For most, coffee is a daily drink
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- Figure 46: Number of cups of coffee consumed by daily coffee drinkers, by age, July 2008
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- Figure 47: Number of cups of coffee consumed by daily coffee drinkers, by household income, July 2008
Coffee Drinking at Home
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- Key points
- Where do consumers shop for coffee?
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- Figure 48: Where consumers buy coffee for home consumption, by age, July 2008
- What are consumers buying to have at home?
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- Figure 49: Types of coffee purchased for home consumption, by age, July 2008
- How popular are fair trade and organic coffees?
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- Figure 50: Incidence of fair trade and organic coffee purchase, by age, July 2008
- Consumer attitudes about coffee prices
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- Figure 51: Price beliefs about coffee, by age, July 2008
- Brand loyalty and coffee consumers
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- Figure 52: Brand loyalty and coffee consumers, by age, July 2008
Attitudes and Beliefs about Coffee
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- Key points
- Coffee is still a morning beverage…even among hipsters
- For many, coffee remains an at-home beverage
- Can coffee be considered functional?
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- Figure 53: General attitudes about coffee, by age, July 2008
- Health beliefs about coffee
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- Figure 54: General health beliefs about coffee, by age, July 2008
Changes in Coffee Consumption
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- Key points
- Coffee consumption stabilizes after age 35
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- Figure 55: Changes in coffee consumption in last year, by age, July 2008
- Why consumers drink less coffee
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- Figure 56: Reasons for drinking less coffee this year, by age, July 2008
- Why consumers drink more coffee
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- Figure 57: Reasons for drinking more coffee this year, by age, July 2008
Coffee Consumption: Teens
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- Key points
- Coffee drinking starts young, and it isn’t all at the coffeehouse
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- Figure 58: Incidence of coffee consumption among teens, by gender, July 2008
- Where are teens drinking coffee?
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- Figure 59: Locations for teen coffee consumption, by gender, July 2008
- What are teens drinking?
- Carbonated soft drinks and energy drinks resonate with teen boys
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- Figure 60: Teen coffee and beverage preferences, by gender, July 2008
- Why are teens drinking coffee?
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- Figure 61: Why teens drink coffee and coffee drinks, by gender, July 2008
- Teen coffee consumers are not yet using coffee and coffee drinks as a “functional” beverage
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- Figure 62: Reasons for drinking coffee and coffee drinks among teens, by gender, July 2008
Race and Hispanic Origin
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- Key points
- Coffee consumption in households by race/ethnicity
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- Figure 63: Incidence of coffee consumption in the household, by race/Hispanic origin, February 2007-March 2008
- Types of coffee used in household by race/Hispanic origin
- Preference for instant coffee may reflect both price and tradition
- Asians and Hispanics drive ready-to-drink, international flavored, and espresso/cappuccino sales
- Preference for coffee types by race/Hispanic origin
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- Figure 64: Type of coffee used in household, by race/Hispanic origin, February 2007-March 2008
- Frequency and quantity of household coffee consumption by race/Hispanic origin
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- Figure 65: Daily household coffee consumption, caffeinated and decaffeinated, by race/Hispanic origin, February 2007-March 2008
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- Figure 66: Incidence of daily coffee consumption, by race/Hispanic origin, July 2008
- Roasted coffee brand preferences by race/Hispanic origin
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- Figure 67: Household usage of whole bean/ground coffee brands, by race/Hispanic origin, February 2007-March 2008
- Instant coffee brand preferences by race/Hispanic origin
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- Figure 68: Household usage of instant coffee brands, by race/Hispanic origin, February 2007-March 2008
- International flavored instant coffee brand preferences by race/Hispanic origin
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- Figure 69: Household usage of international flavored instant coffee brands, by race/Hispanic origin, February 2007-March 2008
- Shopping habits for coffee for home consumption
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- Figure 70: Types of coffee purchased for home consumption, by race/Hispanic origin, July 2008
- Attitudes about coffee prices—fair trade and daily spending
- General coffee attitudes
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- Figure 71: General attitudes about coffee, by race/Hispanic origin, July 2008
- Changes in coffee consumption by race/Hispanic origin
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- Figure 72: Changes in coffee consumption, by race/Hispanic origing, July 2008
Cluster Analysis—Everyday Joe Drinkers, Coffeehouse Bon Vivants, Coffee Bargain Hunters
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- Everyday Joe Drinkers
- Coffeehouse Bon Vivants
- Coffee Bargain Hunters
- Cluster characteristics
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- Figure 73: General coffee consumption behaviors, by cluster, July 2008
- Figure 74: Incidence of daily coffee consumption, by cluster, July 2008
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- Figure 75: Number of cups of coffee consumed weekly, by cluster, July 2008
- Figure 76: Coffee consumption compared to last year, by cluster, July 2008
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- Figure 77: Where consumers shop for coffee for home consumption, by cluster, July 2008
- Figure 78: Type of coffee purchased for home use, by cluster, July 2008
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- Figure 79: Brand loyalty, by cluster, July 2008
- Figure 80: Mean attitudes and beliefs ratings about coffee, by cluster, July 2008
- Cluster demographics
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- Figure 81: Coffee drinker and purchaser clusters, by gender, July 2008
- Figure 82: Coffee drinker and purchaser clusters, by age, July 2008
- Figure 83: Coffee drinker and purchaser clusters, by household income, July 2008
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- Figure 84: Coffee drinker and purchaser clusters, by race/Hispanic origin, July 2008
- Methodology
IRI/Builders—Key Household Purchase Measures
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- Brand map
- Ground coffee
- Ground coffee buying rate analysis
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- Figure 85: Brand map, selected brands of caffeinated coffee, by household penetration, *2007
- Ground decaffeinated coffee
- Ground decaffeinated coffee buying rate analysis
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- Figure 86: Brand map, selected brands of decaffeinated coffee, by household penetration, *2007
- Consumer insights—coffee
- Overview of coffee purchases
- Ground coffee
- Brand leaders by penetration
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- Figure 87: Key purchase measures for the top brands of ground caffeinated coffee, by household penetration, *2007
- Ground decaffeinated coffee
- Brand leaders by penetration
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- Figure 88: Key purchase measures for the top brands of ground decaffeinated coffee, by household penetration, *2007
Appendix: IRI/Builders Panel Data Definitions
Appendix: Other Useful Consumer Tables
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- Figure 89: Form of coffee used in household, by age, February 2007-March 2008
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- Figure 90: Number of cups of coffee consumed by daily coffee drinkers, July 2008
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- Figure 91: Number of cups of coffee consumed by daily coffee drinkers, by race/Hispanic origin, July 2008
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- Figure 92: General coffee consumption behaviors, July 2008
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- Figure 93: General coffee consumption behaviors, by household income, July 2008
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- Figure 94: Where consumers buy coffee for home consumption, by gender, July 2008
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- Figure 95: Use of whole bean/ground coffee brands, by age, February 2007-March 2008
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- Figure 96: Use of instant coffee brands, by age, February 2007-March 2008
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- Figure 97: What type of coffee consumers buy for home consumption, by gender, July 2008
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- Figure 98: Use of instant coffee brands, by age, February 2007-March 2008
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- Figure 99: General attitudes about coffee, by household income, July 2008
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- Figure 100: General health beliefs about coffee, by household income, July 2008
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- Figure 101: Price beliefs about coffee, by household income, July 2008
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- Figure 102: Brand loyalty and coffee consumers, by household income, July 2008
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- Figure 103: Brand loyalty and coffee consumers, by region, July 2008
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- Figure 104: When coffee is consumed among teens, July 2008
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- Figure 105: Location of coffee consumption among teens, July 2008
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- Figure 106: Teens’ preferences related to coffee, July 2008
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- Figure 107: Population, by age, 2003-13
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Appendix: Trade Associations
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