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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- Sales increase driven by commodity prices and innovation
- Roasted remains the leading category
- Instant and RTD also driving gains at some firms
- 2010 new products introductions up sharply from 2009
- Usage unchanged except in instant category
- Established mid-market brands remain dominant
- Single-cup usage driven by convenience and freshness
- Most noticed price increases yet purchase behavior remains fairly steady
Insights and Opportunities
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- There’s still lots of room for growth through innovation
- Starbucks Natural Fusions
- Single-cup segment will continue to drive growth
Inspire Trends
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- Inspire Trend: “Mood to Order”
- Inspire Trend: “The Real Thing”
Market Size and Forecast
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- Key points
- Coffee sales spike in 2011 as gourmet options proliferate and raw bean prices surge
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- Figure 1: Total U.S. retail sales and forecast of coffee, at current prices, 2006-16
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- Figure 2: Total U.S. sales and forecast of coffee, at inflation-adjusted prices, 2006-16
- Fan chart forecast
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- Figure 3: Fan chart forecast of total U.S. retail sales of coffee, at current prices, 2006-16
- Walmart sales
Market Drivers
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- Key points
- Growth of mature segment will drive long-term sales growth
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- Figure 4: Population, by age, 2006-16
- Weak economy could undermine growth
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- Figure 5: Unemployment and underemployment rates, January 2007-July 2010
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- Figure 6: Unemployment status (seasonally adjusted) among civilian noninstitutional population, by age, gender, and race/Hispanic origin, July 2010-July 2011
- Figure 7: Consumer sentiment index, by quarter, 2001-10
- Challenging economy motivates some to drink more coffee at home
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- Figure 8: Attitudes and behavior toward coffee, by age, June 2011
- However, some report drinking less coffee as a result of price increases
- Most adults watching diet
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- Figure 9: Trends in watching diet among adults aged 18+, 2005-10
- Figure 10: Trends in watching diet among adults aged 18+, 2005-10
- Increase in commodity prices driving sales gains
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- Figure 11: Percent change in CPI* in food and energy sectors, Dec. 2010–May 2011
Competitive Context
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- Key points
- Energy drinks and shots pose competition for coffee, especially for the RTD segment
- Competition with coffeehouses
- Tea and RTD tea offer growing competition
Segment Performance
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- Figure 12: Sales of Coffee in the U.S. by category, at current prices, by segment, 2006-16
- Figure 13: Total U.S. sales of coffee, by segment, 2010 and 2011
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- Figure 14: FDMx sales of coffee, by segment, 2010 and 2011
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Segment Performance—Roasted Coffee
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- Key points
- 2011 sales spike as a function of commodity prices and innovation
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- Figure 15: Trends in FDMx roasted coffee dollar and volume sales and price, 2006-16
- Single-cup options also driving growth
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- Figure 16: Total U.S. sales of roasted coffee, 2006-16
Segment Performance—Instant Coffee
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- Key points
- Instant coffee gains driven in part by increase in usage
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- Figure 17: FDMx sales and forecast of instant coffee, 2006-16
Segment Performance—Ready-to-drink Coffee
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- Key points
- Retail sales and forecast of RTD Coffee
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- Figure 18: Retail sales and forecast of RTD coffee, 2006-16
Retail Channels—Overview
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- Sales growth can be seen across channels
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- Figure 19: U.S. retail sales of coffee, by channel, 2006-11
Retail Channels—Supermarkets
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- Key points
- Increase in supermarket sales proportionate to overall category growth
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- Figure 20: U.S. sales of coffee at supermarkets, 2006-11
Retail Channels—Other FDMx Channels
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- Key points
- Other FDMx channels likely to be important partners in the future
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- Figure 21: Other FDMx channel sales of coffee, 2006-11
Retail Channels—Non-FDMx Channels
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- Key points
- C-stores and sales growing at slower pace
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- Figure 22: Total U.S. retail sales of coffee through non-FDMx channels, 2006-11
Retail Channels—Natural Supermarkets
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- Key points
- Insights
- Sales of spreads and dips in the natural channel
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- Figure 23: Natural supermarket sales of coffee, at current prices, 2008-10*
- Figure 24: Natural supermarket sales of coffee, at inflation-adjusted prices, 2008-10*
- Natural channel sales by segment
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- Figure 25: Natural supermarket sales of coffee, by segment, 2008 and 2010*
- Brands of note
- Natural channel sales by organic content
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- Figure 26: Natural supermarket sales of coffee, by organic content, 2008 and 2010*
Companies and Brands
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- Key points
- J.M. Smucker Co.
- Kraft Foods
- Starbucks Coffee Company
- Green Mountain Coffee Roasters
- North American Coffee Partnership
- Nestlé
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- Figure 27: Select manufacturer FDMx sales of coffee, 2009-10
Brand Share—Roasted Coffee
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- Key points
- J.M. Smucker Co. wins with gourmet and Dunkin’ partnership
- Dunkin’ co-branded SKUs driving growth for J.M. Smucker Co.
- Green Mountain capitalizes on strong demand for K-Cups
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- Figure 28: Leading FDMx brand sales and market share of roasted coffee, 2010-11
Brand Share—Instant Coffee
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- Key points
- Nestlé USA continues to drive growth with bilingual instant
- Starbucks make inroads with Via and instant iced coffee
- Kraft finds some growth with sweet quasi-gourmet formulations
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- Figure 29: Leading FDMx brand sales and market share of instant coffee, 2010-11
Brand Share—Ready-to-Drink (RTD) Coffee
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- Key points
- WM Bolthouse Farms decline; private labels gain
- Starbucks Doubleshot Energy+Coffee could drive significant gains
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- Figure 30: Starbucks Doubleshot Energy+Coffee
- Figure 31: Leading FDMx brand sales and market share of RTD coffee, 2010-11
Brand Share—Coffee Additive/Flavoring, Substitutes and Concentrates
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- Key points
- R. Torre & Co. Inc. realizes some gains but category sales remain weak
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- Figure 32: Leading FDMx brand sales and market share of coffee additive/flavoring, substitutes and concentrates, 2010-11
Innovations and Innovators
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- Key points
- Ground coffee concepts represent majority of new products introductions
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- Figure 33: Incidence of new products introductions in the U.S., 2006-11
- Most new products are branded
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- Figure 34: Incidence of new product introductions in the U.S., branded vs. private label, 2006-11
- Most new products are unflavored
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- Figure 35: Top 10 flavors in new coffee products in the U.S., 2006-11
- Kosher most common claim
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- Figure 36: Top 10 claims in new coffee products in the U.S., 2006-11
- Premium 100% arabica bean claims common
- Fruity, floral, and nutty notes could drive sales in some cases
- Country-of-origin and fair trade certified claims adorn a variety of gourmet SKUs
- Limited-edition and seasonal could drive growth around the holidays
- Functional and healthy coffee products have the potential to drive growth
- Private labels becoming more sophisticated
- Single-cup SKUs becoming more common, and differentiated
Marketing Strategies
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- Dunkin’ Donuts
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- Figure 37: Brand analysis of Dunkin’ Donuts
- Television advertising
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- Figure 38: Dunkin’ Donuts coffee, 2010
- Website
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- Figure 39: Quantcast estimates for Dunkin’Donuts.com, September 2011
- YouTube
- Starbucks
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- Figure 40: Brand analysis of Starbucks Via
- Television advertising
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- Figure 41: Starbucks Via Ready Brew ad, 2011
- Website
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- Figure 42: Quantcast estimates for Starbucks.com, September 2011
- YouTube
- Folgers
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- Figure 43: Brand analysis of Folgers
- Television advertising
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- Figure 44: Folgers Classic Roast ad, 2011
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- Figure 45: Folgers Special Roast ad, 2010
- Website
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- Figure 46: Quantcast estimates for Folgers.com, September 2011
- Maxwell House
- Television advertising
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- Figure 47: Maxwell House ad, 2011
- Figure 48: Maxwell House International Café ad, 2010
- Website
The Consumer—Usage, Type, Brands, and Frequency
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- Key points
- Increase in instant usage key driver of sales gains
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- Figure 49: Incidence of household coffee consumption, by type, May 2005-March 2011
- 25- to 34-year-olds less likely to use decaffeinated coffee
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- Figure 50: Household consumption of ground and whole bean coffee by type, by age, February 2010-March 2011
- Whole bean coffee popular with higher-income households
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- Figure 51: Household consumption of ground and whole bean coffee by kind, by household income, February 2010-March 2011
- Whole bean especially popular in the West
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- Figure 52: Household consumption of ground and whole bean coffee by kind, by region, February 2010-March 2011
- Folgers popular across age groups, Starbucks more popular with younger drinkers
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- Figure 53: Household consumption of whole or ground bean coffee by top brand, by age, February 2010-March 2011
- Folgers very popular among lower-income households
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- Figure 54: Household consumption of whole or ground bean coffee by top brand, by household income, February 2010-March 2011
- Starbucks most popular in the West
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- Figure 55: Household consumption of whole or ground bean coffee by top brand, by region, February 2010-March 2011
- Consumption of ground/whole bean coffee highest since 2006
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- Figure 56: Trends in household frequency of drinking ground/whole bean coffee on an average day, May 2005-June 2010
- Households with 18- to 24-year-olds drink most ground/whole bean coffee
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- Figure 57: household frequency of drinking ground/whole bean coffee on an average day, by age, February 2010-March 2011
- Younger instant coffee drinkers less likely to use decaf
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- Figure 58: Household consumption of instant by type, by age, February 2010-March 2011
- Younger instant coffee drinkers more likely to use flavored varieties
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- Figure 59: Household consumption of instant coffee by flavor, by age, February 2010-March 2011
- Younger adult households more likely to use Folgers, Maxwell House
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- Figure 60: Household consumption of instant coffee by top brand, by age, February 2010-March 2011
- Nescafé Clasico very popular in the West
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- Figure 61: Household consumption of instant coffee by top brand, by region, February 2010-March 2011
- Frequency of instant coffee use up from 2007-08
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- Figure 62: Trends in household frequency of drinking instant coffee on an average day, January 2006-March 2011
- Households of 18- to 24-year-olds drinking more instant coffee
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- Figure 63: household frequency of drinking instant coffee on an average day, by age, February 2010-March 2011
- RTD coffee consumption continues downturn
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- Figure 64: Personal incidence of drinking RTD coffee, by age, February 2010-March 2011
- Slightly more 18- to 24-year-olds drink RTD coffee
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- Figure 65: Personal incidence of drinking RTD coffee, by age, February 2010-March 2011
- Starbucks Frappuccino most popular among 18- to 24-year-olds
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- Figure 66: Personal incidence of drinking RTD coffee by brand, by age, February 2010-March 2011
- Coffee most popular with older and higher-income adults
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- Figure 67: Personal incidence of drinking coffee, by gender, age, race/Hispanic origin, and region, June 2011
- Among coffee drinkers older and less well-off drink most
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- Figure 68: Personal average volume consumption of coffee, by gender, age, race/Hispanic origin, and region, June 2011
Single-cup Coffee
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- Key points
- Convenience is a major attraction for single-cup coffee users
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- Figure 69: Reasons for drinking single-cup coffee, by gender, June 2011
- Convenience important to 18- to 44-year-olds, 45+ like being able to brew single cups without making a full pot
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- Figure 70: Reasons for drinking single-cup coffee, by age, June 2011
- Those earning $75K+ more interested in convenience of single-cup
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- Figure 71: Reasons for drinking single-cup coffee, by household income, June 2011
- Many who do not use pod-style machines already own a regular coffee maker
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- Figure 72: Reasons for not drinking single-cup coffee, by gender, June 2011
- Young adults less likely to cite major reasons for not using pod-style
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- Figure 73: Reasons for not drinking single-cup coffee, by age, June 2011
Brand Choice and Influence of Rising Prices on Buying Habits
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- Key points
- Older adults more likely to use retail brands while younger use coffeehouse
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- Figure 74: Incidence of buying coffee by type of brand, by age, June 2011
- Those from $75K+ households more interested in coffeehouse brands
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- Figure 75: Incidence of buying coffee by type of brand, by household income, June 2011
- Young adults less likely to be aware of price increases
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- Figure 76: Consumer observation of rising prices of favorite coffee brand, by age, June 2011
- Those from households earning $75K+ less aware of price increases
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- Figure 77: Consumer observation of rising prices of favorite coffee brand, by household income, June 2011
- Young adults who noticed price increase more likely to change behavior
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- Figure 78: Change in purchase behavior in buying favorite brand due to rising prices, by age, June 2011
- $100K+ households least likely to change behavior due to rising prices
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- Figure 79: Change in purchase behavior in buying favorite brand due to rising prices, by age, June 2011
Coffee-related Attitudes and Behavior
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- Key points
- Many drinking more coffee at home and less away from home than last year
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- Figure 80: Attitudes and behavior toward coffee, by age, June 2011
- Young more likely to use coffee for energy and concentration
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- Figure 81: Attitudes toward caffeine in coffee and reasons to drink coffee, by age, June 2011
- Older more likely to see big difference in quality between coffee brands
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- Figure 82: Attitudes toward brand quality, coffeehouse brands, and other attributes, by age, June 2011
- $100K+ coffee drinkers more likely to prefer coffeehouse brands
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- Figure 83: Attitudes toward brand quality, coffeehouse brands, and other attributes, by age, June 2011
Race and Hispanic Origin
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- Key points
- Whites and Asians more likely to use caffeinated coffee
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- Figure 84: Household consumption of ground and whole bean coffee by type, by race/Hispanic origin, February 2010-March 2011
- Whites and Asians most likely to use whole bean coffee
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- Figure 85: Household consumption of ground and whole bean coffee by kind, by race/Hispanic origin, February 2010-March 2011
- Starbucks most popular with Asians
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- Figure 86: Household consumption of whole or ground bean coffee by top brand, by race/Hispanic origin, February 2010-March 2011
- Whites consume ground/whole bean coffee with greatest frequency
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- Figure 87: household frequency of drinking ground/whole bean coffee on an average day, by race/Hispanic origin, February 2010-March 2011
- Hispanics most likely to use decaffeinated instant coffee
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- Figure 88: Household consumption of instant by type, by race/Hispanic origin, February 2010-March 2011
- Whites most likely to use unflavored instant coffee
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- Figure 89: Household consumption of instant coffee by flavor, by age, February 2010-March 2011
- Nescafé Clasico most popular among Hispanics
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- Figure 90: Household consumption of instant coffee by top brand, by race/Hispanic origin, February 2010-March 2011
- Black and Hispanic households heaviest users of instant
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- Figure 91: household frequency of drinking instant coffee on an average day, by race/Hispanic origin, February 2010-March 2011
- Asians most likely to drink RTD coffee
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- Figure 92: Personal incidence of drinking RTD coffee, by race/Hispanic origin, February 2010-March 2011
- Starbucks Frappuccino most popular with Asians
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- Figure 93: Personal incidence of drinking RTD coffee by brand, by age, February 2010-March 2011
- Blacks most likely to use national retail brands
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- Figure 94: Choice of brand when buying coffee, by race/Hispanic origin, June 2011
- Hispanics less sensitive to recent coffee price increases
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- Figure 95: Consumer observation of rising prices of favorite coffee brand, by race/Hispanic origin, June 2011
- Blacks and Hispanics more likely to buy favorite brand less often due to rising prices
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- Figure 96: Change in purchase behavior in buying favorite brand due to rising prices, by race/Hispanic origin, June 2011
- Coffeehouse/specialty brands more popular among bean and single-cup coffee users
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- Figure 97: Incidence of buying different tier of brands by the ways coffee is consumed, June 2011
- Whole bean coffee users more likely to perceive quality differences between brands
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- Figure 98: Coffee attribute preference by the way coffee drinkers use coffee, June 2011
Cluster Analysis
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- Instant Minimalists
- Demographics
- Characteristics
- Opportunity
- Gourmet Relaxers
- Demographics
- Characteristics
- Opportunity
- Decaffeinated Home-grinders
- Demographics
- Characteristics
- Opportunity
- Cluster characteristic tables
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- Figure 99: Coffee clusters, June 2011
- Figure 100: Incidence of drinking coffee at home, by ways of drinking by coffee clusters, June 2011
- Figure 101: Attitudes and behavior of toward coffee, by coffee clusters, June 2011
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- Figure 102: Personal average volume consumption of coffee (by number of cups), by coffee clusters, June 2011
- Figure 103: Incidence of buying coffee by type of brand, by coffee clusters, June 2011
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- Figure 104: Consumer observation of rising prices of favorite coffee brand, by coffee clusters, June 2011
- Figure 105: Attitudes toward caffeine in coffee and reasons to drink coffee, by coffee clusters, June 2011
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- Figure 106: Attitudes toward brand quality, coffeehouse brands, and other attributes, by coffee clusters, June 2011
- Cluster demographic tables
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- Figure 107: Coffee clusters, by gender, June 2011
- Figure 108: Coffee clusters, by age, June 2011
- Figure 109: Coffee clusters, by household income, June 2011
- Figure 110: Coffee clusters, by race, June 2011
- Figure 111: Coffee clusters, by Hispanic origin, June 2011
- Cluster methodology
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 112: Brand map, selected brands of ground coffee buying rate, by household penetration, 2010*
- Brand leader characteristics
- Key purchase measures
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- Figure 113: Key purchase measures for the top brands of ground coffee, by household penetration, 2010*
- Ground decaffeinated coffee—consumer insights on key purchase measures
- Brand map
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- Figure 114: Brand map, selected brands of ground decaffeinated coffee buying rate, by household penetration, 2010*
- Brand leader characteristics
- Key purchase measures
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- Figure 115: Key purchase measures for the top brands of ground decaffeinated coffee, by household penetration, 2010*
- Instant coffee—consumer insights on key purchase measures
- Brand map
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- Figure 116: Brand map, selected brands of instant coffee buying rate, by household penetration, 2010*
- Brand leader characteristics
- Key purchase measures
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- Figure 117: Key purchase measures for the top brands of instant coffee, by household penetration, 2010*
Appendix—IRI/Builders Panel Data Definitions
Appendix—Trade Associations
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