Coffee Houses and Tea Shops - US - December 2015

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY
The issues
Heated competition in the coffee and tea market
Figure 1: Purchased a coffee or tea beverage from segment in past three months, October 2015
Caffeine concerns among the health conscious
Figure 2: Coffee house and tea shop statement agreement, any agree, October 2015
Coffee and tea from abroad
Figure 3: Coffee house and tea shop statement agreement, “I’m interested in visiting internationally-based coffee house chains in the US,” any agree, October 2015
The opportunities
Consumers are open to new/innovative beverages
Figure 4: Coffee house and tea shop statement agreement, “I like trying new/innovative coffee and/or tea drinks,” any agree, October 2015
Evening offerings may increase visitation
Figure 5: Coffee/tea evening visitation motivators, October 2015
Millennial parents are key consumers
Figure 6: Coffee house and tea shop statement agreement, any agree, October 2015
What it means
THE MARKET – WHAT YOU NEED TO KNOW
Price of coffee falls
Turning to tea
Millennials are having kids
MARKET FACTORS
Cheaper coffee may not lead to cheaper drinks
Figure 7: Monthly average price for raw coffee supplies, January 2012-September 2015
Tea imports, retail consumption raise
Figure 8: US imports of tea and mate in metric tons, 1999-2013
Parental Millennials
KEY PLAYERS – WHAT YOU NEED TO KNOW
Third wave coffee
Globalization of coffee houses and tea shops
Tea time
THIRD WAVE COFFEE AND TEA
History of the coffee “waves”
Third wave coffee players
What it means
Fourth wave on the horizon?
INTERNATIONAL CHAINS
Foreign players enter the market
TEA SHOPS
Tea shop chains
MMI ANALYSIS
Espresso beverages on the rise
Fruity tea flavors experience growth
WHAT’S WORKING?
Mobile payments pay off for shops
Cold brew coffee
WHAT’S NEXT?
Coffee to you
Beverages to watch
Consider functionality
Food for thought
THE CONSUMER – WHAT YOU NEED TO KNOW
Older Millennials are passionate about coffee and tea
Hispanics are visiting coffee and tea chains; prefer bold drinks
Highlight natural claims
COFFEE AND TEA SEGMENT VISITATION
Coffee house chains most visited; tea shops trail behind
Figure 9: Purchased a coffee or tea beverage from segment in past three months, October 2015
Tea shop visitors
Figure 10: Purchase a coffee or tea beverage from segment in past three months, October 2015
GENDER DIFFERENCES
Men are willing to pay; women want deals and are less enthusiastic
Figure 11: Coffee house and tea shop statement agreement, any agree, October 2015
Figure 12: Most important factors when choosing a coffee house or tea shop
PARENTS
Parents care more about secondary factors
Figure 13: Coffee house and tea shop statement agreement, any agree, October 2015
Opportunity exists to market coffee house/tea shop food to parents
Figure 14: Most important factors when choosing a coffee house or tea shop, any agree, October 2015
Figure 15: Coffee house and tea shop statement agreement, any agree, October 2015
AGE DIFFERENCES
The youngest consumers
Figure 16: Purchased a coffee or tea beverage from segment in past three months, October 2015
Older Millennials: The key demographic
Figure 17: Coffee house and tea shop statement agreement, Coffee/tea beverages should be made with all natural ingredients, any agree, October 2015
Figure 18: Coffee house and tea shop statement agreement, any agree, October 2015
Boomers: Provide them a quality coffee and tea menu
Figure 19: Coffee/tea evening visitation motivators, October 2015
Figure 20: Most important factors when choosing a coffee house or tea shop
HISPANIC
Hispanics are heavy coffee/espresso drinkers
Figure 21: Coffee beverages consumed in the past three months (both at home and away from home), Q3 2015
Hispanics are coffee/tea chain users, show interest in evening options
Figure 22: Purchased a coffee or tea beverage from segment in past three months, October 2015
CONSUMERS AND THIRD WAVE
Will third wave catch on?
Figure 23: Coffee house and tea shop statement agreement, any agree, October 2015
Key driver analysis
Methodology
True coffee lovers will pay for single-origin beverages
Figure 24: Key drivers of agreement: Single-source coffee or tea beverages are worth paying more for, October 2015
What it means
COFFEE AND TEA FLAVORS AND CONDIMENTS
Coffee roasts
Figure 25: Condiment/flavor appeal – Coffee roasts, October 2015
Coffee flavors
Tea flavors/varieties
Figure 26: Condiment/flavor appeal – Tea flavors/varieties, October 2015
Sweeteners
Creamers
TURF analysis – Condiments
Methodology
Provide a mix of natural and artificial options to satisfy all consumers
Figure 27: TURF analysis – Sweeteners, October 2015
Figure 28: TURF analysis – Creamers, October 2015
COFFEE AND TEA TRACKER
At home versus away from home
Figure 29: Coffee beverages consumed in the past three months (both at home and away from home), Q3 2015
Coffee and tea consumption: Demographics
COFFEE SHOP AND TEA HOUSE EVENING VISITATION
Evening visitation strategies: Focus on price
Figure 30: Coffee/tea evening visitation motivators, October 2015
Evening visitation strategies: Serve alcohol
Evening visitation strategies: Relaxation beverages
Figure 31: Yogi Bedtime Tea
Figure 32: Counting Sheep Coffee 40 Winks Blend
NATURAL AND LOW-CAFFEINE BEVERAGES
Highlight natural products
Figure 33: Coffee house and tea shop statement agreement, “Coffee/tea beverages should be made with all natural ingredients,” any agree, October 2015
Potential may exist for lower caffeine beverages
Figure 34: Coffee house and tea shop statement agreement, any agree, October 2015
QUALITATIVE ANALYSIS – BRAND PERSONIFICATION
Methodology
Starbucks: Young, fit, and professional
Dunkin’ Donuts: The choice for working Americans
McDonald’s: Parent needing a boost
Independents: A place for hipsters
QUALITATIVE ANALYSIS – ADDITIONAL TOPICS
The ideal coffee house or tea shop app
COFFEE AND TEA DELIVERY
Delivery viability and marketing strategies: A quantitative and qualitative perspective
Figure 35: Coffee house and tea shop statement agreement, “Coffee houses and tea shops should offer delivery services”, any agree, October 2015
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Consumer survey data
Consumer qualitative research
Abbreviations and terms
Abbreviations
APPENDIX – TURF
Figure 36: Table – TURF Analysis – Sweeteners and creamers, October 2015
APPENDIX – KEY DRIVER ANALYSIS
Interpretation of results
Figure 37: Key drivers of agreement: single-source coffee or tea beverages are worth paying more for – Key driver output, October 2015