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Coffee - US - October 2012

SCOPE AND THEMES
What you need to know
Definition
Data sources
Sales data
Consumer survey data
Advertising creative
Abbreviations and terms
Abbreviations
Terms
EXECUTIVE SUMMARY
Coffee remains staple household purchase for most consumers
Figure 1: Coffee purchase by type, June 2012
Ground, single-cup lead daily consumption preferences
Figure 2: Every day consumption of different types of coffee at home, June 2012
One-cup-at-a-time convenience fueling category growth
Figure 3: Total U.S. retail sales of coffee, by segment, at current prices, 2010 and 2012
Figure 4: Sales and forecast of single-cup coffee, at current prices, 2007-17
Commodity cost rollercoaster on downslope—for now
Coffee market sales to stabilize through 2017
Figure 5: Fan chart forecast of coffee market, at current prices, 2007-17
Price combined with usual brand, roast most important to consumers
Figure 6: Factors influencing coffee purchase behavior, June 2012
Other FDMx channel attracts the most coffee buyers
Figure 7: U.S. retail sales of coffee in supermarkets and other FDMx, at current prices, 2007-12
RTD segment reinvigorated by multiserving innovation
Figure 8: FDMx sales of ready-to-drink coffee, by market share of leading brands, 52 weeks ending July 8, 2012
Single-origin releases could be next frontier for premium coffee
What we think
ISSUES IN THE MARKET
How can coffee manufacturers encourage trial of new varieties?
What RTD innovations will challenge Frappuccino’s dominance?
How long can the single-cup market continue its meteoric rise?
INSIGHTS AND OPPORTUNITIES
Bring drinkers home with coffeehouse-inspired CPG
Figure 9: Coffee preparation by quarter, Q2 2011-12
Fuel all-day consumption with a variety of options
Figure 10: Attitude toward coffee, by age, June 2012
Single-origin coffee could be the next frontier for educated drinkers
K-Cup patent expiration might heat up single-cup competition
TREND APPLICATIONS
Trend: Brand Review
Trend: The Suite Life
2015 Trend: Old Gold
MARKET SIZE AND FORECAST
Key points
Commodity cost changes cause retail prices to fluctuate
Single-cup coffee takes second place in format choice
RTD performance dependent upon successful innovations, retail placement
Sales and forecast of U.S. retail coffee market
Figure 11: Total U.S. retail sales and forecast of U.S. retail coffee market, at current prices, 2007-17
Figure 12: Total U.S. retail sales and forecast of market, at inflation-adjusted prices, 2007-17
Fan chart forecast
Figure 13: Fan chart forecast of coffee market, at current prices, 2007-17
Walmart sales
MARKET DRIVERS
Key points
Asian, Hispanic population growth beneficial for coffee performance
Figure 14: Population, by race and Hispanic origin, 2006-16
Coffee curiosity from younger consumers could spell future success
Figure 15: Population, by age, 2007-17
Decline in restaurant performance likely to boost at-home sales
Figure 16: Restaurant Performance Index, January 2009-July 2012
Disposable income rebound could brew improved premium sales
Figure 17: Real Disposable Income, January 2007-July 2012
COMPETITIVE CONTEXT
Key points
Energy drinks slated for growth, but not from teens
Carbonated soft drinks continue to provide caffeine buzz
Healthy consciences turn consumers toward tea
Coffeehouses and donut shops continue to cater to caffeine seekers
SEGMENT PERFORMANCE
Key points
Dedication to tradition translates to roasted coffee’s success
Single-cup segment poised to brew up new sales
Instant, RTD markets in need of innovations
Coffee sales, by segment
Figure 18: Sales of coffee in the U.S., segmented by type, at current prices, 2007-17
SEGMENT PERFORMANCE—ROASTED COFFEE
Key points
Roasted coffee to continue leading category
Sales and forecast of roasted coffee
Figure 19: Total U.S. FDMx sales of roasted coffee, 2007-17
Roasted coffee category led by ground caffeinated options
Figure 20: Usage of ground or whole bean coffee, by age, January 2011-March 2012
Figure 21: Usage of ground or whole bean coffee, February 2007-March 2012
Whole bean usage most popular with $150K+
Figure 22: Usage of ground or whole bean coffee, by household income, January 2011-March 2012
SEGMENT PERFORMANCE—SINGLE-CUP COFFEE
Key points
New consumers boost the single-cup market
Sales and forecast of single-cup coffee
Figure 23: Sales and forecast of single-cup coffee, at current prices, 2007-17
Single-cup segment: Is it still developing or just a fad?
SEGMENT PERFORMANCE—INSTANT COFFEE
Key points
Core consumers not enough to drive further growth for instant coffee
Sales and forecast of instant coffee
Figure 24: Sales and forecast of instant coffee, at current prices, 2007-17
For increased success, instant should capitalize on its upsides
Hispanic, Asian, black consumers most likely to opt for instant
Figure 25: Usage of instant coffee, by race/Hispanic origin, January 2011-March 2012
Decaf, unflavored are most popular varieties
Figure 26: Usage of instant coffee, by age, January 2011-March 2012
Figure 27: Usage of instant flavored coffee mixes, January 2011-March 2012
SEGMENT PERFORMANCE—RTD COFFEE
Key points
One success story shows opportunity within RTD coffee
Sales and forecast of RTD coffee
Figure 28: Sales and forecast of RTD coffee, at current prices, 2007-17
Burst—or void—of new products could change RTD’s future
Young women among RTD coffee fans
Figure 29: Usage of ready-to-drink coffee, by gender and age, January 2011-March 2012
Asians, Hispanics are a ready audience for RTD coffee
Figure 30: Usage of ready-to-drink coffee, by race/Hispanic origin, January 2011-March 2012
RETAIL CHANNELS
Key points
Consumers play “price is right” by shopping multiple channels
Figure 31: Total U.S. retail sales of coffee, at current prices, 2007-12
Coffee shoppers embrace other outlets
Figure 32: Total U.S. retail sales of coffee, by channel, at current prices, 2010-12
Single-cup coffee spurs realignment of retail placement standards
RETAIL CHANNELS—SUPERMARKETS
Key points
Price increases, single-cup expansion fueling supermarkets
Figure 33: U.S. supermarket sales of coffee, at current prices, 2007-12
Private label single-cup presents sales opportunity
RETAIL CHANNELS—OTHER FDMX
Key points
Evolving shopping habits benefit channel
Figure 34: U.S. sales of coffee, through other retail channels, at current prices, 2007-12
Price, convenience driving other FDMx traffic
RETAIL CHANNELS—DRUG STORES
Key points
Channel should emphasize food and beverage selections
Figure 35: U.S. Drug store sales of coffee, at current prices, 2007-12
Private label could provide price tier options
RETAIL CHANNELS—NATURAL SUPERMARKETS
Key points
Artisan, local, fair trade lead booming sales
Sales of coffee in the natural channel
Figure 36: Natural supermarket sales of coffee, at current prices, 2010-12*
RTD remains small beans in natural channel
Figure 37: Natural supermarket sales of coffee, by segment, 2010 and 2012*
Organic coffee outsells conventional in channel
Figure 38: Natural supermarket sales of coffee, by organic, 2010 and 2012*
Fair trade finds niche in natural
Figure 39: Natural supermarket sales of coffee, by fair trade, 2010 and 2012*
Local brands dominate channel sales
LEADING COMPANIES
Key points
J.M. Smucker leads category thanks to Folgers
Kraft Foods Group showcases sales rise, market share drop
Starbucks gains slight market share at retail
Green Mountain continues impressive growth streak
NACP’s Starbucks-branded RTD products face competition
Nestlé’s instant brands keep it afloat
Manufacturer U.S. coffee sales
Figure 40: FDMx sales of coffee, by leading companies, rolling 52 weeks 2011 and 2012
BRAND SHARE—ROASTED COFFEE
Key points
Roast segment grows with help from price increases
Figure 41: FDMx sales of roast coffee, by leading companies, rolling 52 weeks 2011 and 2012
Folgers, Maxwell House top brand choices for consumers
Figure 42: Usage of ground or whole bean coffee, Top 10, by race/Hispanic origin, January 2011-March 2012
Positive sales for J.M. Smucker’s Folgers, Dunkin’ Donuts brands
Maxwell House releases “fresh” packaging designs
Retail launch of Gevalia provides premium entry for Kraft Foods
BRAND SHARE—SINGLE-CUP COFFEE
Key points
GMCR dominate sales with a stable of single-cup options
Licensees Starbucks, Folgers ride Keurig’s rising tide
Private label single-cup could reshape market share
Potential exists for new single-cup brewing systems
Manufacturer sales of single-cup coffee
Figure 43: FDMx sales of single-cup coffee, by leading companies, rolling 52 weeks 2011 and 2012
BRAND SHARE—INSTANT COFFEE
Key points
Instant’s popularity proves slightly less soluble
Figure 44: Coffee segment consumption from 2007-12
Manufacturer sales of instant coffee
Figure 45: Manufacturer sales of instant coffee, 2011 and 2012
Starbucks VIA causes consumers to shuffle instant usage
Figure 46: Usage of instant coffee, by race and Hispanic origin, January 2011-March 2012
Nescafé Clasico targets Hispanics with bilingual packaging
Instant format new focus for Starbucks
Packaging facelifts aim to attract new audiences
Instant flavored mixes capitalize on flavor fans
Figure 47: Usage of instant flavored coffee mixes, January 2011-March 2012
BRAND SHARE—RTD COFFEE
Key points
Starbucks RTDs lose share as consumers turn to new RTD options
Manufacturer sales of RTD coffee
Figure 48: FDMx sales of ready-to-drink coffee, by leading companies, rolling 52 weeks 2011 and 2012
Multiserving International Delight Iced Coffee sees early success
Opportunity awaits as other brands surpass Starbucks
Figure 49: Usage of ready-to-drink coffee, by age, January 2011-March 2012
Innovations try to grab RTD coffee spotlight
INNOVATIONS AND INNOVATORS
Refined consumers drawn to origin-specific blends
Figure 50: Product claims for new coffee launches, July 18, 2011-July 18, 2012
Coconut-water-infused options refresh stagnant RTD segment
Single-cup brewers go beyond hot brewed coffee
MARKETING STRATEGIES
Brand analysis: Folgers
Figure 51: Brand analysis of Folgers, 2012
Online initiatives
TV presence
Figure 52: Folgers, Best Part, TV ad, 2012
Brand analysis: Maxwell House
Figure 53: Brand analysis of Maxwell House, 2012
Online initiatives
TV presence
Figure 54: Maxwell House, Sippy Cup, TV ad, 2012
Figure 55: Maxwell House, Mugs, TV AD, 2012
Brand analysis: Gevalia
Figure 56: Brand analysis of Gevalia, 2011
Online initiatives
TV presence
Figure 57: Gevalia, Cup of Johan, TV AD, 2012
Figure 58: Gevalia, Piper, TV AD, 2012
Print and other
Figure 59: Gevalia coupon mail insert Summer 2012, front and back
Brand analysis: Starbucks
Figure 60: Brand analysis of Starbucks, 2012
Online initiatives
TV presence
Figure 61: Starbucks, VIA, TV AD, 2012
Print
Figure 62: Starbucks K-Cup coupon insert, summer 2012
Figure 63: Starbucks Food Network Magazine Ad, October 2012
THE CONSUMER—USAGE AND TYPES
Key points
Upside potential exists in younger consumers’ varied habits
Figure 64: Coffee purchase by type, by age, June 2012
Millennials rank high in coffee consumption across segments
Figure 65: Personal incidence of consuming different types of coffee at home, by generation, June 2012
Price, brand, flavor, and blend lead purchase decisions
Figure 66: Factors influencing coffee purchase behavior, by gender, June 2012
Coffee curiosity expands to roast types
Figure 67: Any personal coffee consumption by coffee roast type, by age, June 2012
Drip coffee makers dominate brewer use, single-cup gaining
Figure 68: Household ownership of different types of coffee machines, by gender and age, June 2012
The stronger the coffee preference, the less standard the brewer
Figure 69: Household ownership of different types of coffee machines, by roast type consumed, June 2012
Multiple formats present entries for all income levels
Figure 70: Coffee purchase by type, by household income, June 2012
Household size plays a role in coffee segment choice
Figure 71: Coffee purchase by type, by household size, June 2012
Price, personal preferences determine purchases
Figure 72: Incidence of buying ground or whole bean coffee by packaging size, June 2012
Figure 73: Incidence of buying ground coffee by packaging size, by age, June 2012
Northeast, West homes have highest incidence of coffee consumption
Figure 74: Personal incidence of consuming different types of coffee at home, by region, June 2012
Figure 75: Household ownership of different types of coffee machines, by region, June 2012
GENDER PREFERENCES FOR COFFEE
Key points
Whole bean has masculine edge
Figure 76: Personal incidence of consuming different types of coffee at home, by gender and age, June 2012
Men more likely to use specialty brewers
Figure 77: Household ownership of different types of coffee machines, by gender, June 2012
Figure 78: Any personal coffee consumption by coffee roast type, by gender and age, June 2012
Men more likely to brew espresso, cappuccino
Figure 79: Any personal coffee consumption by coffee roast type, by gender and age, June 2012
Instant mixes, RTD more popular with women
Figure 80: Personal incidence of consuming different types of coffee at home, by gender, June 2012
Women brew with convenience, flavors in mind
Figure 81: Factors influencing coffee purchase behavior, by gender and age, June 2012
CONSUMER ATTITUDES AND BEHAVIORS
Key points
Coffee curiosity has specific appeal in each segment
Figure 82: Factors influencing coffee purchase behavior, by personal incidence of consuming different types of coffee at home, June 2012
RTD most likely to sell on promotion
Figure 83: Attitude toward coffee, by age, June 2012
Coffee claims and positioning most popular with 18-35 year olds
Figure 84: Factors influencing coffee purchase behavior, by generation, June 2012
Coffeehouse brands find sweet spot with younger consumers
Figure 85: Attitude toward coffee, by age, June 2012
Figure 86: Attitude toward coffee, by age, June 2012
Coffee viewed as the original energy drink by some
Figure 87: Attitude toward coffee, by age, June 2012
Figure 88: Attitude toward coffee, by age, June 2012
Younger consumers swapping energy drinks, soda for RTD coffee
Figure 89: Attitude toward coffee, by age, June 2012
Figure 90: Attitude toward coffee, by Hispanic origin and age, June 2012
RACE AND HISPANIC ORIGIN
Key points
Hispanics, Asians consume the most coffee
Figure 91: Personal incidence of consuming different types of coffee at home, by race/Hispanic origin, June 2012
Blacks least likely to own coffee maker, Asians prefer specialty brewers
Figure 92: Household ownership of different types of coffee machines, by race/Hispanic origin, June 2012
Segments find niche with younger Hispanics
Figure 93: Personal incidence of consuming different types of coffee at home, by Hispanic origin and age, June 2012
Country-of-origin labeling most important to Hispanics aged 18-44
Figure 94: Factors influencing coffee purchase behavior, by Hispanic origin and age, June 2012
Coffee functionality most important to Hispanics aged 45+
Figure 95: Attitude toward coffee, by Hispanic origin and age, June 2012
Asians most likely to embrace lighter coffee, coffeehouse brands
Figure 96: Any personal coffee consumption by coffee roast type, by race/Hispanic origin, June 2012
Figure 97: Attitude toward coffee, by race/Hispanic origin, June 2012
Coffee’s health halo a selling point for Asians
Figure 98: Attitude toward coffee, by race/Hispanic origin, June 2012
Figure 99: Attitude toward coffee, by race/Hispanic origin, June 2012
Figure 100: Attitude toward coffee, by race/Hispanic origin, June 2012
Cappuccino, blended coffee could attract more blacks
Figure 101: Any personal coffee consumption by coffee roast type, by race/Hispanic origin, June 2012#
Figure 102: Factors influencing coffee purchase behavior, by race/Hispanic origin, June 2012
SYMPHONYIRI GROUP BUILDERS PANEL DATA IRI/BUILDERS—KEY HOUSEHOLD PURCHASE MEASURES
Overview of coffee
Ground coffee—Consumer insights on key purchase measures
Brand map
Figure 103: Brand map, selected brands of ground coffee buying rate, by household penetration, 2011*
Brand leader characteristics
Key purchase measures
Figure 104: Key purchase measures for the top brands of ground coffee, by household penetration, 2011*
Ground decaffeinated coffee—Consumer insights on key purchase measures
Brand map
Figure 105: Brand map, selected brands of ground decaffeinated coffee -buying rate, by household penetration, 2011*
Brand leader characteristics
Key purchase measures
Figure 106: Key purchase measures for the top brands of ground decaffeinated coffee, by household penetration, 2011*
Instant coffee—Consumer insights on key purchase measures
Brand map
Figure 107: Brand map, selected brands of instant coffee buying rate, by household penetration, 2011*
Brand leader characteristics
Key purchase measures
Figure 108: Key purchase measures for the top brands of instant coffee, by household penetration, 2011*
Instant decaffeinated coffee—Consumer insights on key purchase measures
Brand map
Figure 109: Brand map, selected brands of instant decaffeinated coffee, by household penetration, 2011*
Brand leader characteristics
Key purchase measures
Figure 110: Key purchase measures for the top brands of instant decaffeinated coffee, by household penetration, 2011*
APPENDIX—OTHER USEFUL CONSUMER TABLES
Figure 111: Coffee purchase, by type, June 2012
Figure 112: Personal incidence of consuming different types of coffee at home, June 2012
Figure 113: Total U.S. retail sales of coffee, by segment, at current prices, 2010 and 2012
Figure 114: Factors influencing coffee purchase behavior, June 2012
Figure 115: Population, by age, 2006-16
Figure 116: Total U.S. FDMx sales of roasted coffee, at inflation-adjusted prices, 2007-12
Figure 117: Total U.S. FDMx sales of single-cup coffee, at inflation-adjusted prices, 2007-12
Figure 118: Total FDMx sales of instant coffee, at inflation-adjusted prices, 2007-12
Figure 119: Total U.S. FDMx sales of RTD coffee, at inflation-adjusted prices, 2007-12
Figure 120: Natural supermarket sales of coffee, at inflation-adjusted prices, 2010-12*
Figure 121: Usage of ground or whole bean coffee, by age, January 2011-March 2012
Figure 122: Usage of ground or whole bean coffee, by race/Hispanic origin, January 2011-March 2012
Figure 123: Usage of ground or whole bean coffee, by race/Hispanic origin, January 2011-March 2012
Figure 124: Usage of ground or whole bean coffee, by household income, January 2011-March 2012
Figure 125: Usage of ground or whole bean coffee, by age, January 2011-March 2012
Figure 126: Usage of ground or whole bean coffee, by race/Hispanic origin, January 2011-March 2012
Figure 127: Usage of instant coffee, by age, January 2011-March 2012
Figure 128: Usage of instant coffee, by household income, January 2011-March 2012
Figure 129: Usage of instant coffee, January 2011-March 2012
Figure 130: Usage of instant coffee, by age, January 2011-March 2012
Figure 131: Usage of ready-to-drink coffee, by age, January 2011-March 2012
Figure 132: Usage of ready-to-drink coffee, by race/Hispanic origin, January 2011-March 2012
Figure 133: Usage of ground or whole bean coffee, February 2007-March 2012
Figure 134: Personal incidence of consuming different types of coffee at home, by age, June 2012
Figure 135: Coffee purchase by type, by gender and age, June 2012
Figure 136: Coffee purchase by type, by race/Hispanic origin, June 2012
Figure 137: Coffee purchase by type, by Hispanic origin and age, June 2012
Figure 138: Any personal coffee consumption by coffee roast type, by generation, June 2012
Figure 139: Any personal coffee consumption by coffee roast type, by gender and age, June 2012
Figure 140: Almost always/Frequently drink espressos or filter coffee , by age group, US, June 2012
APPENDIX—SYMPHONYIRI BUILDERS PANEL DATA DEFINITIONS
SymphonyIRI Consumer Network Metrics
APPENDIX—TRADE ASSOCIATIONS

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