Table of Contents
Overview
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- What you need to know
- Definition
Executive Summary
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- The issues
- Roasted, instant coffee sales struggle as consumers turn to RTD, single-cup
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- Figure 1: Percentage change of sales growth, by segment, 2013-17 (est)
- Market penetration is strong as most adults drink some type of coffee
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- Figure 2: Coffee consumption – Any consumption (net)*, by nets, May 2017
- The average consumer is not highly engaged with cold coffee, cold brew
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- Figure 3: Attitudes toward cold coffee, May 2017
- The opportunities
- Younger generations increasing coffee consumption
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- Figure 4: Select attitudes toward coffee, by generation, May 2017
- Innovations could increase penetration of cold coffee, cold brew
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- Figure 5: Interest in cold coffee innovations, May 2017
- Increased focus on health and wellness differentiates offerings, expands usage occasions
- What it means
The Market – What You Need to Know
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- Coffee experiences moderate growth, slower than previous gains
- Most spend goes toward roasted coffee, which is struggling
- Hot coffee seen as functional, cold coffee is a treat
- Creamer market sees stable growth
- Engaged key populations benefit market
Market Size and Forecast
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- Historic and projected sales performance
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- Figure 6: Total US sales and fan chart forecast of coffee, at current prices, 2012-22
- Figure 7: Total US sales and forecast of coffee, at current prices, 2012-22
Market Breakdown
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- Most spend goes to roasted coffee, stronger performance from RTD, single-cup
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- Figure 8: Sales of coffee, by segment, 2017(est)
- Figure 9: Percentage change of sales growth, by segment, 2013-17 (est)
- Cold brew sales are thriving
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- Figure 10: Total US retail sales of refrigerated cold-brew/concentrate coffee, at current prices, 2012-22
- Supermarkets losing share to other retailers
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- Figure 11: US sales of coffee through other retail channels, at current prices, 2012-17
Market Perspective – Coffee
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- Hot coffee turned to for function, cold coffee a treat
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- Figure 12: Beverage occasions, May 2017
- Consumers more likely to rely on foodservice for iced, specialty drinks
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- Figure 13: Coffee consumption, at home and away from home, January 2017
- Coffee launches increasingly fall under RTD
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- Figure 14: Share of coffee products, by subcategory, 2012-17*
- Coffee consumption outpaces tea
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- Figure 15: Coffee and tea consumption, January 2017
- Hybrid, energy drinks offer opportunity, plus competition and potential confusion
Market Perspective – Creamer Sales
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- Creamer market experiences stable growth
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- Figure 16: Total US sales and fan chart forecast of cream and creamers, at current prices, 2012-22
- Figure 17: Total US sales and forecast of cream and creamers, at current prices, 2012-22
- Coffee and creamer markets both see sales begin to slow
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- Figure 18: Percentage change of coffee and creamer sales growth, by segment, 2013-17 (est)
Market Factors
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- Growing population of consumers 25-34 benefits market
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- Figure 19: Population by age, 2012-22
- Rise in Hispanic population suggests category growth
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- Figure 20: Population by race and Hispanic origin, percent change, 2017-22
Key Players – What You Need to Know
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- Most sales fall under J.M. Smucker, but Starbucks, smaller players gain share
- Small roaster, foodservice brands, RTD appeal to consumers
- Leading brands, decaf fail to resonate
- Broader variety of claims and formats help differentiate offerings
Company and Brand Sales of Coffee
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- J.M Smucker dominates market, but losing share to Starbucks
- Sales of coffee by company
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- Figure 21: MULO sales of coffee, by leading companies, rolling 52 weeks 2016 and 2017
What’s Working?
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- Small roasters see gains in roasted coffee
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- Figure 22: MULO sales of select small roasters ready to brew offerings, 52-week review period ending March 19, 2017
- Foodservice single-cup brands continue to build off positive momentum
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- Figure 23: MULO sales of select single-cup offerings from foodservice brands, 52-week review period ending March 19, 2017
- RTD segment thrives, driven by gains in RTD cold brew
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- Figure 24: MULO sales of select RTD cold brews, 52-week review period ending March 19, 2017
What’s Struggling?
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- Decaf posts declines as consumers turn to hot coffee for function
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- Figure 25: MULO sales of decaffeinated coffee, 2014-16
- Leading retailer brands struggle as consumers seek premium offerings
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- Figure 26: MULO sales of select products from struggling leading brands, 2014-16
What’s Next?
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- Environmental, natural claims appeal to Millennials
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- Figure 27: Share of coffee products making select claims, 2012-17*
- Health and wellness benefits help RTD brands differentiate
- Coffee hybrid drinks change the coffee drinking experience
The Consumer – What You Need to Know
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- Roasted coffee is a coffee staple, single-cup reaches half of adults
- RTD, cold brew thrive, instant is losing appeal
- Convenience, variety, price drive retailer choice
- Taste top-of-mind, ethical and environmental claims stand out
- Additives an important part of coffee drinking experience
- Cold coffee slow to take off for at-home consumption
- Consumption frequency rises for some, perceptions drive opportunity, challenges
Roasted and Single-cup Coffee Consumption
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- Roasted coffee a staple, most frequently consumed
- Single-cup continues to gain traction
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- Figure 28: Consumption of ready-to-brew and single-cup coffee, May 2017
- Millennials are core, heavy drinkers of coffee
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- Figure 29: Consumption of ready-to-brew and single-cup coffee – Heavy and moderate drinkers, by generation, May 2017
- Hispanics heavy drinkers of a variety of coffee formats
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- Figure 30: Consumption of ready-to-brew and single-cup coffee – Heavy and moderate drinkers, by race/Hispanic origin, May 2017
Ready-to-drink and Instant Coffee Consumption
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- Ready-to-drink and instant coffees used less than daily
- Cold brew gaining traction
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- Figure 31: Consumption of ready-to-drink and instant coffee, May 2017
- iGen and Millennials core users of instant, RTD, cold brew
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- Figure 32: Consumption of ready-to-drink and instant coffee – Any consumption (net)*, by generation, May 2017
- Hispanics drink instant, RTD, cold brew, liquid enhancers more frequently
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- Figure 33: Consumption of ready-to-drink and instant coffee – Heavy and moderate drinkers, by race/Hispanic origin, May 2017
Retailers Shopped
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- Convenience, variety, and price points influence retailer choice
- Niche set of shoppers trade up for specialty stores
- Online, delivery services increase competition
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- Figure 34: Retailers shopped, May 2017
- Younger adults buying at specialty retailers, older adults stick with grocery
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- Figure 35: Select retailers shopped, by age, May 2017
- Income a barrier for natural food stores, coffee houses, online
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- Figure 36: Select retailers shopped, by household income, May 2017
- Hispanics prefer buying coffee at mass merchandisers
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- Figure 37: Retailers shopped, by race/Hispanic origin, May 2017
Important Coffee Attributes
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- Roast type, flavor top-of-mind for consumers
- Coffee chain brands, major CPG brands equally sought
- Organic, fair trade claims can set offerings apart
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- Figure 38: Important coffee attributes, May 2017
- Older adults and younger adults rely on different flavor indicators
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- Figure 39: Select important coffee attributes, by generation, May 2017
- Major brands stand out to multicultural adults
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- Figure 40: Select important coffee attributes, by race/Hispanic origin, May 2017
Coffee Additives
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- Most people add something to their coffee; sugar, flavored cream most common
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- Figure 41: Coffee additives – Any coffee(net)*, May 2017
- Additives typically being added to hot coffee rather than cold coffee
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- Figure 42: Coffee additives, by type, May 2017
- Younger adults customize their coffee at home
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- Figure 43: Select coffee additives – Any coffee (net)*, by age, May 2017
- Multicultural consumers engaged with additives
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- Figure 44: Select coffee additives – Any coffee (net)*, by race/Hispanics origin, May 2017
Attitudes and Behaviors toward Cold Coffee and Cold Brew
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- Few consumers are making their own cold coffee at home
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- Figure 45: Consumers who have made cold coffee at home, May 2017
- Cold coffee innovations appeal to niche set of consumers
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- Figure 46: Interest in cold coffee innovations, May 2017
- The average consumer is not highly engaged with cold coffee, cold brew
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- Figure 47: Attitudes toward cold coffee, May 2017
- Younger generations more enthusiastic about cold coffee
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- Figure 48: Select attitudes toward cold coffee and cold brew, by generation, May 2017
- Hispanics increasingly turn to cold coffee, Black consumers lag behind
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- Figure 49: Select attitudes toward cold coffee and cold brew, by all, Hispanic, Black, and Asian consumers, May 2017
Attitudes and Behaviors toward Coffee
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- Coffee consumption on the rise for niche set of adults
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- Figure 50: Select attitudes toward coffee, by generation, May 2017
- Perceptions that single-cup and RTD are pricey challenge sales
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- Figure 51: Price-related attitudes toward coffee, May 2017
- Hot coffee seen as relaxing, some choose coffee due to health perceptions
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- Figure 52: Attitudes toward coffee, May 2017
- Multicultural adults drinking more coffee, willing to splurge for added value
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- Figure 53: Select attitudes toward coffee, by race/Hispanic origin, May 2017
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Fan chart forecast
- Consumer survey data
- Abbreviations and terms
- Abbreviations
Appendix – The Market
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- Figure 54: Total US sales and forecast of coffee, at inflation-adjusted prices, 2011-21
- Figure 55: Total US retail sales and forecast of coffee, by segment, at current prices, 2012-22
- Figure 56: Total US retail sales and forecast of cream and creamers, at inflation-adjusted prices, 2012-22
- Figure 57: Total US retail sales and forecast of cream and creamers, by segment, at current prices, 2012-22
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- Figure 58: Total US retail sales of cream and creamers, by channel, at current prices, 2015 and 2017
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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 2016 and 2017
- Figure 60: MULO sales of single-cup coffee, by leading companies and brands, rolling 52 weeks 2016 and 2017
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- Figure 61: MULO sales of instant coffee, by leading companies and brands, rolling 52 weeks 2016 and 2017
- Figure 62: MULO sales of ready to drink coffee, by leading companies and brands, rolling 52 weeks 2016 and 2017
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- Figure 63: MULO sales of cream and creamers, by leading companies, rolling 52 weeks 2016 and 2017
- Figure 64: MULO sales of cream, by leading companies and brands, rolling 52 weeks 2016 and 2017
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- Figure 65: MULO sales of creamers, by leading companies and brands, rolling 52 weeks 2016 and 2017
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Appendix – The Consumer
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- Figure 66: Coffee and tea additions, percent change of usage between Oct. 2016 and Jan. 2017
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