Table of Contents
Scope and Themes
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- What you need to know
- Definition
- Data sources
- Sales data
- Consumer survey data
- Advertising creative
- Abbreviations and terms
- Abbreviations
- Terms
Executive Summary
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- Market poised for moderate growth
- Energy drinks pose primary competitive threat
- Retail channels
- Population growth, health and the economy help boost sales
- Folgers and Maxwell House roasted varieties driving category growth
- Instant coffee holding steady
- Via success signals demand for premium
- Spanish language packaging could help further growth of value brands
- Ready to drink (RTD) segment sales stagnant
- Coffee additive/flavorings, substitutes and concentrates sales continue decline
- Unflavored most popular; eco-friendly and fair trade becoming more common
- Incidence and frequency of use remains stable
- Most prefer national brands over regional and premium varieties
- Consistent with sales, Folgers and Maxwell House most popular brands
- Most use a drip-style coffee maker
- Most young adults (and teens) prefer sweetened options
- Hispanics are a high-value segment
Insights and Opportunities
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- Consider taking ethical responsibility to the next level
- Consider highlighting concentration benefits
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- Figure 1: Benefits of coffee, by household income, June 2010
Inspire Insights
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- Trend: Extend My Brand
Market Size and Forecast
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- Key points
- Brew at home continues even as commodity prices percolate
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- Figure 2: Total U.S. retail sales and forecast of coffee, at current prices, 2005-15
- Figure 3: Total U.S. retail sales and forecast of coffee, at inflation-adjusted prices, 2005-15
- Walmart sales
Market Drivers
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- Key points
- High demand 55+ segment growing quickly
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- Figure 4: Population, by age, 2005-15
- Rapid growth of Hispanic segment could help drive growth
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- Figure 5: Population, by race and Hispanic origin, 2005-15
- Most Americans watching their diet
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- Figure 6: Incidence of presently watching/controlling diet, May 2004-June 2009
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- Figure 7: Reasons for watching/controlling diet, 2006 and 2009
- Health-related concerns could have greater impact on demand in the future
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- Figure 8: Attitudes towards coffee, by age, June 2010
- High unemployment may undermine demand
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- Figure 9: U.S. unemployment rate, January 2007-July 2010
- Low consumer confidence may undermine willingness to purchase premium products
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- Figure 10: Consumer Sentiment, January 2007-July 2010
Competitive Context
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- Key points
- Energy drinks primary competitive threat among teens and young adults
- Tea competes directly with coffee as wellness trend grows
- Enjoyment drives demand; coffeehouses could undermine retail sales growth
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- Figure 11: Attitudes towards coffee consumption and preparation, by age, June 2010
Segment Performance
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- Roasted sub-category continues to drive overall category growth
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- Figure 12: FDMx sales of coffee, by segment, 2009 and 2010
Segment Performance—Roasted Coffee
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- Key points
- Roasted coffee drives growth as many brew at home to save money
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- Figure 13: Total U.S. retail sales and forecast of roasted coffee, at current prices, 2005-15
Segment Performance—Instant Coffee
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- Key points
- Demand for instant rises as Hispanic population grows and new products are introduced
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- Figure 14: Total U.S. retail sales and forecast of instant coffee, at current prices, 2005-15
Segment Performance—Ready-to-Drink (RTD) Coffee
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- Key point
- Frappuccino sales help stem segment losses
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- Figure 15: Total U.S. retail sales and forecast of ready-to-drink coffee, at current prices, 2005-15
Retail Channels—Overview
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- Supermarkets continue to maintain nearly half of share
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- Figure 16: U.S. retail sales of coffee, by channel, 2008 and 2010
Retail Channels—Supermarkets
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- Key point
- Supermarkets continue to perform well as eating and entertaining at home trend holds steady
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- Figure 17: U.S. sales of coffee at supermarkets, at current prices, 2005-10
Retail Channels—Other Channels
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- Key point
- Other channels benefit from strong demand for mass merchandisers
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- Figure 18: U.S. sales of coffee in other retail channels, at current prices, 2005-10
Natural Channel/SPINS
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- Key points
- Sales of coffee in the natural channel
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- Figure 19: Natural supermarket sales of coffee, at current prices, 2008-10
- Figure 20: Natural supermarket sales of coffee, at inflation-adjusted prices, 2008-10
- Implications
- Natural channel sales by segment
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- Figure 21: Natural supermarket sales of coffee, by segment, 52 weeks ending June 2008 and June 2010
- Leading brands in segments of note
- Organic and fair trade trends
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- Figure 22: Natural supermarket sales of coffee, by organic, June 2008 and June 2010
- Figure 23: Natural supermarket sales of packaged coffee, by fair trade, June 2008 and June 2010
Leading Companies
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- Key points
- J.M. Smucker Co. maintains dominance as Starbucks gains share
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- Figure 24: Select manufacturer FDMx sales of coffee, 2009-10
Brand Share—Roasted Coffee
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- Key points
- Dominant players all capitalizing on strong growth for roasted options
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- Figure 25: Leading FDMx brand sales and market share of roasted coffee, 2009-10
Brand Share—Instant Coffee
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- Key points
- Folgers and Nescafé remain dominant; Via makes inroads
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- Figure 26: Leading FDMx brand sales and market share of instant coffee, 2009-10
- Via helps to drive growth during Starbucks’ turnaround
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- Figure 27: Leading FDMx brand sales and market share of Starbucks’ Via instant coffee, 2009-10
Brand Share—Ready to Drink (RTD)
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- Key points
- Bolthouse Farms and Starbucks post growth in challenging segment
- Manufacturer and brand sales of ready to drink coffee
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- Figure 28: Leading FDMx brand sales and market share of ready to drink coffee, 2009-10
Brand Share—Coffee Additive/Flavoring, Substitutes and Concentrates
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- Key points
- Overall FDMx sales of additives decline but some smaller brands post gains
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- Figure 29: Leading FDMx brand sales and market share of coffee additive/flavoring, substitutes and concentrates, 2009-10
Innovation and Innovators
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- Key points
- Launches of flavored coffee on the decline
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- Figure 30: Top 10 flavors in new coffee introductions, 2004-10
- Figure 31: Top 10 flavors in new coffee introductions, as a percent of total coffee launches, 2004-10
- Ethical and organic launches on the rise
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- Figure 32: Top 10 claims associated with new coffee introductions, 2004-10
- Private label introductions on the decline
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- Figure 33: Proportion of new product launches that are private label, 2004-10
- New products with environmentally friendly packaging
- Many use fair trade seal to increase brand appeal
- Some able to effectively differentiate with seasonal products
Brands and Marketing Strategies
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- Overview of the brand landscape
- Starbucks
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- Figure 34: Brand analysis of Starbucks’ Via, 2010
- Starbucks’ Via television ads
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- Figure 35: Starbucks’ Via ad #1, 2010
- Figure 36: Starbucks’ Via ad #2, 2010
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- Figure 37: Starbucks’ Via launch ad—taste the difference, 2009
- Starbucks online social media
- Dunkin’ Donuts
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- Figure 38: Brand analysis of Dunkin’ Donuts, 2010
- Dunkin’ Donuts television ads
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- Figure 39: Dunkin’ Donuts ad—woman in bathrobe, 2009
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- Figure 40: Dunkin’ Donuts ad—copy machine, 2009
- Dunkin’ Donuts social media
- Social media campaigns from other coffee brands
- Nescafé
- Seattle’s Best Coffee
- Illy
Incidence and Frequency of Use
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- Key points
- Incidence of use has remained stable for the last several years
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- Figure 41: Trended household use of coffee and espresso products, by type, 2004-09
- Most users drink coffee on a daily basis
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- Figure 42: Frequency of coffee consumption, by age, June 2010
- Household coffee preferences in ground/whole bean coffee
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- Figure 43: Trended household use of caffeinated and decaffeinated coffee, 2004-09
- Figure 44: Trended household use of ground and whole bean coffee, 2004-09
- Household use of roasted coffee—caffeinated use skews higher than decaf
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- Figure 45: Trended daily household use of ground regular coffee, 2004-09
- Figure 46: Trended daily household use of ground decaffeinated coffee, 2004-09
- Most households that use instant coffee consume caffeinated varieties
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- Figure 47: Trended household use of regular or decaffeinated instant coffee 2004-09
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- Figure 48: Trended daily household use of instant coffee, 2004-09
- Coffee mixes hold less promise
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- Figure 49: Trended household use of regular and sugar-free flavored coffee mixes, 2004-09
- Figure 50: Trended daily household use of instant flavored coffee mixes, 2004-09
Preferred Type of Coffee
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- Key points
- Over-55s more likely to see difference between brands
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- Figure 51: Coffee drinking habits, by age, June 2010`
- National brands remain dominant
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- Figure 52: Coffee purchases for home use, by age, June 2010
- National brands much less popular with affluents
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- Figure 53: Coffee purchases for home use, by household income, June 2010
Brand Preferences
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- Key points
- Folgers and Maxwell House maintain dominance as Starbucks and private label gain penetration
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- Figure 54: Use of ground or whole bean roasted coffee, by brand, 2004-09
- Dominant instant brands lose some ground in 2009
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- Figure 55: Use of instant coffee, by brand, 2004-09
- Trended use of RTD coffee brands
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- Figure 56: Trended use of coffee drinks, by brand, 2006-09
- Starbucks increasingly dominant in the espresso category
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- Figure 57: Trended use of espresso/cappuccino products, by brand, 2004-09
Method of Preparation
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- Key points
- Many young adults prefer Euro-style preparation
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- Figure 58: Coffee preparation methods at home, by age, June 2010
Coffee-related Attitudes
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- Key points
- About four in 10 young adults prefer sweetened drinks
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- Figure 59: Attitudes towards coffee, by age, June 2010
Race and Hispanic Origin
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- Key points
- Hispanics represent key growth opportunity
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- Figure 60: Household coffee usage, by race and Hispanic origin, February 2009-March 2010
- Spanish-speaking Hispanics key subsegment, especially for instant
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- Figure 61: Category usage among Hispanics, by language spoken in the home, February 2009-March 2010
- Taste preferences differ among consumers
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- Figure 62: Attitudes towards coffee, by race/Hispanic origin, June 2010
Cluster Analysis
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- Cup o’ Joes (38%)
- Characteristics
- Opportunity
- Gourmands (25%)
- Characteristics
- Opportunity
- Adders (38%)
- Characteristics
- Opportunity
- Cluster characteristics
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- Figure 63: Coffee clusters, July 2010
- Figure 64: Frequency of coffee consumption, by coffee clusters, July 2010
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- Figure 65: Coffee consumption and brand preferences, by coffee clusters, July 2010
- Figure 66: Brands of coffee purchased, by coffee clusters, July 2010
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- Figure 67: Attitudes towards coffee, by coffee clusters, July 2010
- Cluster demographics
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- Figure 68: Coffee clusters, by gender, July 2010
- Figure 69: Coffee clusters, by age, July 2010
- Figure 70: Coffee clusters, by household income, July 2010
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- Figure 71: Coffee clusters, by race/Hispanic origin, July 2010
- Cluster methodology
Custom Consumer Groups
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- About one in three teens drink coffee; incidence of use grows with age
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- Figure 72: Coffee consumption among teens, by age, July 2010
- Boys less likely than girls to drink coffee
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- Figure 73: Coffee consumption among teens, by gender, July 2010
- Most teen drinkers use only occasionally
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- Figure 74: Frequency of coffee consumption among teens, July 2010
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- Figure 75: Average coffee consumption among teens, July 2010
- Most prepare at home but many users also consume at coffee shops
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- Figure 76: Coffee procurement among teens, July 2010
- Teen users prefer sweetened drinks and enjoy drinking coffee
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- Figure 77: Attitudes towards coffee among teens, July 2010
IRI/Builders—Key Household Purchase Measures
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- Overview of coffee
- Ground coffee
- Consumer insights on key purchase measures
- Brand map
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- Figure 78: Brand map, selected brands of ground coffee, buying rate, by household penetration, 2009
- Brand leader characteristics
- Key purchase measures
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- Figure 79: Key purchase measures for the top brands of ground coffee, by household penetration, 2009
- Instant coffee
- Consumer insights on key purchase measures
- Brand map
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- Figure 80: Brand map, selected brands of instant coffee, buying rate, by household penetration, 2009
- Brand leader characteristics
- Key purchase measures
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- Figure 81: Key purchase measures for the top brands of instant coffee, by household penetration, 2009
- Ground decaffeinated coffee
- Consumer insights on key purchase measures
- Brand map
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- Figure 82: Brand map, selected brands of ground decaffeinated coffee, buying rate, by household penetration, 2009
- Brand leader characteristics
- Key purchase measures
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- Figure 83: Key purchase measures for the top brands of ground decaffeinated coffee, by household penetration, 2009
Appendix: Other Useful Consumer Tables
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- Age
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- Figure 84: Average number of cups of coffee consumed per day, by age, June 2010
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- Figure 85: Attitudes towards coffee, by household income, June 2010
- Income
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- Figure 86: Frequency of coffee consumption, by household income, June 2010
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- Figure 87: Coffee preparation methods at home, by household income, June 2010
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- Figure 88: Attitudes towards coffee, by household income, June 2010
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- Figure 89: Coffee drinking habits, by household income, June 2010
- Race and Hispanic origin
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- Figure 90: Average number of cups of coffee consumed per day, by race/Hispanic origin, June 2010
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- Figure 91: Attitudes towards coffee, by race/Hispanic origin, June 2010
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- Figure 92: Frequency of coffee consumption, by race/Hispanic origin, June 2010
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- Figure 93: Coffee drinking habits, by race/Hispanic origin, June 2010
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- Figure 94: Attitudes towards coffee, by race/Hispanic origin, June 2010
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- Figure 95: Coffee purchases for home use, by race/Hispanic origin, June 2010
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- Figure 96: Coffee preparation methods at home, by race/Hispanic origin, June 2010
Appendix: IRI/Builders Panel Data Definitions
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- IRI Consumer Network Metrics
Appendix: Trade Associations
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