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Coffee - US -July 2017

Coffee - US - July 2017

"After experiencing strong gains from 2012-15, the coffee market slowed from 2016-17 (est) as market penetration of single-cup coffee makers is saturated and fewer new owners has resulted in slower single-cup coffee gains. Still, cold brew sales are thriving and new cold brew innovations such as nitro cold brew and alcoholic cold brew could reinvigorate sales. Additionally, unique benefits such as coffee with health-and-wellness-oriented claims can appeal to the highly engaged iGen and Millennial consumers, who are more likely to seek premium coffee."

- Mimi Bonnett, Director - Food and Drink, Foodservice

This Report discusses the following key topics:

Roasted, instant coffee sales struggle as consumers turn to RTD, single-cup
Market penetration is strong as most adults drink some type of coffee
The average consumer is not highly engaged with cold coffee, cold brew


OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY
The issues
Figure 1: Percentage change of sales growth, by segment, 2013-17 (est)
Figure 2: Coffee consumption – Any consumption (net)*, by nets, May 2017
Figure 3: Attitudes toward cold coffee, May 2017
The opportunities
Figure 4: Select attitudes toward coffee, by generation, May 2017
Figure 5: Interest in cold coffee innovations, May 2017
What it means
THE MARKET
What You Need to Know
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
Historic and projected sales performance
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
Most spend goes to roasted coffee, stronger performance from RTD, single-cup
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
Figure 10: Total US retail sales of refrigerated cold-brew/concentrate coffee, at current prices, 2012-22
Supermarkets losing share to other retailers
Figure 11: US sales of coffee through other retail channels, at current prices, 2012-17
Market Perspective – Coffee
Hot coffee turned to for function, cold coffee a treat
Figure 12: Beverage occasions, May 2017
Consumers more likely to rely on foodservice for iced, specialty drinks
Figure 13: Coffee consumption, at home and away from home, January 2017
Coffee launches increasingly fall under RTD
Figure 14: Share of coffee products, by subcategory, 2012-17*
Coffee consumption outpaces tea
Figure 15: Coffee and tea consumption, January 2017
Hybrid, energy drinks offer opportunity, plus competition and potential confusion
Market Perspective – Creamer Sales
Creamer market experiences stable growth
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
Figure 18: Percentage change of coffee and creamer sales growth, by segment, 2013-17 (est)
Market Factors
Growing population of consumers 25-34 benefits market
Figure 19: Population by age, 2012-22
Rise in Hispanic population suggests category growth
Figure 20: Population by race and Hispanic origin, percent change, 2017-22
KEY PLAYERS
What You Need to Know
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
J.M Smucker dominates market, but losing share to Starbucks
Sales of coffee by company
Figure 21: MULO sales of coffee, by leading companies, rolling 52 weeks 2016 and 2017
What’s Working?
Small roasters see gains in roasted coffee
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
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
Figure 24: MULO sales of select RTD cold brews, 52-week review period ending March 19, 2017
What’s Struggling?
Decaf posts declines as consumers turn to hot coffee for function
Figure 25: MULO sales of decaffeinated coffee, 2014-16
Leading retailer brands struggle as consumers seek premium offerings
Figure 26: MULO sales of select products from struggling leading brands, 2014-16
What’s Next?
Environmental, natural claims appeal to Millennials
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
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
Roasted coffee a staple, most frequently consumed
Single-cup continues to gain traction
Figure 28: Consumption of ready-to-brew and single-cup coffee, May 2017
Millennials are core, heavy drinkers of coffee
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
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
Ready-to-drink and instant coffees used less than daily
Cold brew gaining traction
Figure 31: Consumption of ready-to-drink and instant coffee, May 2017
iGen and Millennials core users of instant, RTD, cold brew
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
Figure 33: Consumption of ready-to-drink and instant coffee – Heavy and moderate drinkers, by race/Hispanic origin, May 2017
Retailers Shopped
Convenience, variety, and price points influence retailer choice
Niche set of shoppers trade up for specialty stores
Online, delivery services increase competition
Figure 34: Retailers shopped, May 2017
Younger adults buying at specialty retailers, older adults stick with grocery
Figure 35: Select retailers shopped, by age, May 2017
Income a barrier for natural food stores, coffee houses, online
Figure 36: Select retailers shopped, by household income, May 2017
Hispanics prefer buying coffee at mass merchandisers
Figure 37: Retailers shopped, by race/Hispanic origin, May 2017
Important Coffee Attributes
Roast type, flavor top-of-mind for consumers
Coffee chain brands, major CPG brands equally sought
Organic, fair trade claims can set offerings apart
Figure 38: Important coffee attributes, May 2017
Older adults and younger adults rely on different flavor indicators
Figure 39: Select important coffee attributes, by generation, May 2017
Major brands stand out to multicultural adults
Figure 40: Select important coffee attributes, by race/Hispanic origin, May 2017
Coffee Additives
Most people add something to their coffee; sugar, flavored cream most common
Figure 41: Coffee additives – Any coffee(net)*, May 2017
Additives typically being added to hot coffee rather than cold coffee
Figure 42: Coffee additives, by type, May 2017
Younger adults customize their coffee at home
Figure 43: Select coffee additives – Any coffee (net)*, by age, May 2017
Multicultural consumers engaged with additives
Figure 44: Select coffee additives – Any coffee (net)*, by race/Hispanics origin, May 2017
Attitudes and Behaviors toward Cold Coffee and Cold Brew
Few consumers are making their own cold coffee at home
Figure 45: Consumers who have made cold coffee at home, May 2017
Cold coffee innovations appeal to niche set of consumers
Figure 46: Interest in cold coffee innovations, May 2017.
The average consumer is not highly engaged with cold coffee, cold brew
Figure 47: Attitudes toward cold coffee, May 2017
Younger generations more enthusiastic about cold coffee
Figure 48: Select attitudes toward cold coffee and cold brew, by generation, May 2017
Hispanics increasingly turn to cold coffee, Black consumers lag behind
Figure 49: Select attitudes toward cold coffee and cold brew, by all, Hispanic, Black, and Asian consumers, May 2017
Attitudes and Behaviors toward Coffee
Coffee consumption on the rise for niche set of adults
Figure 50: Select attitudes toward coffee, by generation, May 2017
Perceptions that single-cup and RTD are pricey challenge sales
Figure 51: Price-related attitudes toward coffee, May 2017
Hot coffee seen as relaxing, some choose coffee due to health perceptions
Figure 52: Attitudes toward coffee, May 2017
Multicultural adults drinking more coffee, willing to splurge for added value
Figure 53: Select attitudes toward coffee, by race/Hispanic origin, May 2017
APPENDIX
Data Sources and Abbreviations
Data sources
Abbreviations and terms
The Market
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
Figure 58: Total US retail sales of cream and creamers, by channel, at current prices, 2015 and 2017
Key Players
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
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
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
Figure 65: MULO sales of creamers, by leading companies and brands, rolling 52 weeks 2016 and 2017
The Consumer
Figure 66: Coffee and tea additions, percent change of usage between Oct. 2016 and Jan. 2017
RESEARCH METHODOLOGY
US Research Methodology
Consumer research
The Mintel fan chart

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