Table of Contents
Executive Summary
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- The issues
- Tea owns health, but not innovation
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- Figure 1: Total market volume consumption per capita – Coffee and tea, 2008-15
- Young consumers claim they are less likely to drink brewed coffee
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- Figure 2: Percent of consumers who agree “I am concerned about the negative health effects of caffeine”, by age, March 2016
- Single-serve coffee meets with challenges
- The opportunities
- Cold brew heats up coffee innovation
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- Figure 3: Percent of consumers who show an interest in ready-to-drink cold-brew coffee, by age, March 2016
- Revitalization is ‘up for grabs’
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- Figure 4: Percent of consumers who associate “revitalization” with green tea, by age, March 2016
- Immigration from Asia can help spur tea growth
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- Figure 5: Tea and coffee usage among Chinese Canadians and the overall population, March 2016
- What it means
The Market – What You Need to Know
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- Coffee volume sales growth outpacing tea
- Immigration represents an opportunity for tea
- Age impacts coffee preferences
Market Size and Forecast
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- Coffee shows dynamic growth
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- Figure 6: Canadian coffee volume and fan chart forecast of total market, 2011-21
- Figure 7: Canadian coffee sales and fan chart forecast of retail market, at current prices, 2011-21
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- Figure 8: Retail Canadian coffee sales and forecast of market, at current prices, 2011-21
- Tea’s growth modest compared to coffee
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- Figure 9: Canadian tea volume and fan chart forecast of total market, 2011-21
- Figure 10: Canadian tea sales and fan chart forecast of retail market, at current prices, 2011-21
- Figure 11: Retail Canadian sales and forecast of market, at current prices, 2011-21
- Canadians moving to non-retail venues in sourcing tea
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- Figure 12: Coffee’s share of volume between retail and other venues, 2011-15
- Figure 13: Tea’s share of volume between retail and other venues, 2011-15
Market Factors
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- Immigration fuelling Canada’s population growth
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- Figure 14: Foreign-born share of population by G7 countries and Australia
- Focus on health and weight management to continue
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- Figure 15: Body mass index, self-reported rate of being overweight or obese among Canadian adults, by gender, 2010-14
- Canada’s aging population likely to influence coffee and tea consumption habits
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- Figure 16: Population over 65 in Canada, historical and projected (% of total), 1971-2061
Key Players – What You Need to Know
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- Category innovation driving coffee growth
- Opportunities for tea to be reinvigorated at retail
- Nitro cold brew to give iced coffee a boost
What’s Working?
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- Coffee’s growth reflective of category innovation
What’s Struggling?
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- Keurig’s single-serve challenged with 2.0 launch
- Tea market stagnant compared to coffee
What’s Next?
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- Coffee looks to spur on continued growth with added benefits
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- Figure 17: Starbucks Doubleshot Coffee and Protein Beverage (US), June 2015
- Figure 18: Super Rebbl Herbs Maca Cold-Brew Coffee and Coconut Milk (US), June 2015
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- Figure 19: Maxwell House Blend Iced Coffee Concentrate (US), March 2015
- Nitro coffee at the forefront of the “third wave”
- ‘Non-traditional’ varieties to garner a greater share of tea usage
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- Figure 20: Share of tea launches in Canada, by flavour, 2011-15
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- Figure 21: DAVIDsTEA Peanut Butter Cup Fruit Infusion Tea (Canada), December 2015
- Figure 22: Tea Squared Nourish The Soul Tea, Be Fit Tea and Sleepyhead tea (Canada), November 2015
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- Figure 23: Laura Secord Organic Teas (Canada), December 2015
- Figure 24: Beauty House Urn-Fermented Kombucha (China), May 2016
- Tea ventures into pods
The Consumer – What You Need to Know
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- Coffee surpasses tea in perceived consumption
- Tea preferences are changing
- Specialty coffee owns perceptions around innovation
Coffee and Tea Usage
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- Canadians are more likely to drink coffee than tea
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- Figure 25: Coffee and tea usage, March 2016
- Tea preferences vary by age
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- Figure 26: Black and green tea usage, by age, March 2016
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- Figure 27: Top claims on tea – share of total launches in North America, 2015
- Brewed coffee’s popularity increases with age
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- Figure 28: Coffee usage, by age, March 2016
Consumption Drivers
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- Consumers hold different associations with coffee and tea
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- Figure 29: Associations with coffee and tea, by type – Correspondence map, March 2016
- Specialty and chilled coffee own innovation
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- Figure 30: Specialty-based and chilled ready-to-drink coffees’ association with being ‘innovative’, by age, March 2016
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- Figure 31: Chilled ready-to-drink coffees’ association with being ‘as a snack on its own’, by age, March 2016
- Brewed coffee consumption supported by habit
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- Figure 32: Love Grace Mocha Dairy Free Cold-Brewed Coffee Blend, US, October 2015
- Tea and health are synonymous
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- Figure 33: Share of consumers who agree coffee is healthier to drink than coffee and vice versa, by age, March 2016
Opportunities for Innovation
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- Consumers place more emphasis on ingredients for tea over coffee
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- Figure 34: Interest in ingredient-based innovation, coffee vs tea, March 2016
- Significant share of consumers interested in new coffee and tea flavours
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- Figure 35: Agreement with trying different flavours of coffee/tea, by age, March 2016
- Figure 36: Agreement with concern over caffeine and impact of strength, by age, March 2016
- Provenance continues to be an opportunity for coffee and tea
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- Figure 37: Interest in international flavoured coffee and tea, by age, March 2016
- Tea and coffee as stress reducers and energy enhancers
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- Figure 38: Coffee and tea associations, by age, March 2016
- Single-serve growth is encountering challenges
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- Figure 39: Share of consumers who agree single coffee/tea pods should be compostable or biodegradable, by age, March 2016
- Over half of Canadians are interested in concentrate
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- Figure 40: Share of consumers interested in coffee/tea concentrate, by age, March 2016
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- Figure 41: Maxwell House Blend Iced Coffee Concentrate, US, March 2015
Opportunities for Innovation by Gender
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- Women are more interested in tea with health benefits
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- Figure 42: Interest in health benefits in coffee and tea, by gender, March 2016
- Cold brew demand varies by gender
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- Figure 43: Interest in RTD cold brew and grounds/leaves tailored to cold brewing, by gender, March 2016
Consumer Groups
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- Women are more likely to respond to tea innovation
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- Figure 44: Coffee and tea usage, by gender, March 2016
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- Figure 45: Tea interest, by gender, March 2016
- Chinese Canadians more likely to drink tea and specialty coffee
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- Figure 46: Coffee and tea usage, Chinese Canadians vs overall population, March 2016
- Similarities outweigh differences between Canada and the US
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- Figure 47: Retail market volume consumption per capita (population) – Coffee, Canada vs US, 2008-15
- Figure 48: Retail market volume consumption per capita (population) – Tea, Canada vs US, 2008-15
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- Figure 49: Coffee shop spend as a proportion of GDP, Canada vs US, 2007 and 2015
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- Figure 50: Coffee (and tea) pods/caps, single-serve usage, Canada vs US, by age, March 2016
Foodservice
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- Quality, value and convenience are the top visit drivers for coffee shops
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- Figure 51: Factors behind foodservice visits, March 2016
- Visit drivers vary across age groups
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- Figure 52: Loyalty programs as a driver to visit coffee shops, by income, March 2016
- How consumers perceive select foodservice operators – in their words
- Starbucks
- Tim Hortons
- McDonald’s
- Second Cup
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Fan chart forecast
- Consumer survey data
- Consumer qualitative research
- Abbreviations and terms
- Abbreviations
Appendix – Market
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- Figure 53: Canadian coffee volume and fan chart forecast of retail market, 2011-21
- Figure 54: Canadian coffee volume and fan chart forecast of other market, 2011-21
- Figure 55: Canadian tea volume and fan chart forecast of retail market, 2011-21
- Figure 56: Canadian tea volume and fan chart forecast of other market, 2011-21
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